Tag: farmers

New Senate Agriculture Committee Head Received Farm Subsidies

In his blog post yesterday — appropriately entitled “Congressional Conflict of Interest“ — my colleague Chris Edwards questioned the selection of Sen. Blanche Lincoln (D-Ark.) to head the Senate Agriculture Committee:

Lincoln has been “a tireless advocate for the Arkansas rice industry’ and a ‘champion for agriculture.” You can see what 20 or so other agriculture lobby groups say about Lincoln here. These are very laudatory remarks, but what about the taxpayers? What do taxpayers think about her support for the $20 billion or so in annual giveaways to farmers?

I wonder what taxpayers think about the fact that Senator Lincoln and her family have received hundreds of thousands of dollars in farm subsidies?

From a 2007 USA Today article:

Members of Congress must report sources of income totaling more than $200, but most get payments through partnerships or other entities, so it can be difficult to learn which ones receive the subsidies. Recipients are searchable by name on www.ewg.org, but, for example, payments to Sen. Blanche Lincoln, D-Ark., are listed under her maiden name, Lambert, at a Virginia address near Washington.  Records show Lincoln and her family members collected $715,000 from 1995-2005, the most recent year complete data are available. She said she personally received less than $10,000 a year, and the subsidies ended in 2005 when her land was sold.

Let’s say I force a stranger under threat of imprisonment or violence to part with part of his or her paycheck, and proceed to give that money to a friend.  I would rightly be labeled a thief or worse.  Suppose I not only gave the money to my friend, but kept a cut for me and my family.  That would be even worse.

But when politicians do it we call them “public servants”?

Congressional Conflict of Interest

lincolnIt looks like farm subsidy reform is unlikely for another few years. Senator Blanche Lincoln has been selected the new head of the Senate Agriculture Committee. Dow Jones notes: “Lincoln is a two-term moderate Democrat who described herself Wednesday as a ‘farmer’s daughter.’”

Lincoln has been “a tireless advocate for the Arkansas rice industry” and a “champion for agriculture.” You can see what 20 or so other agriculture lobby groups say about Lincoln here. These are very laudatory remarks, but what about the taxpayers? What do taxpayers think about her support for the $20 billion or so in annual giveaways to farmers?

I’m guessing that Lincoln will put the interests of subsidy-receiving farmers in her state ahead of the interests of the nation’s taxpayers, given that Arkansas ranks seventh out of the 50 states in terms of farm subsidies received yet has a small population.

This sort of pro-spending bias on committees is common across Congress of course. I’ve argued that one step toward getting the House and Senate to make to more rational and frugal trade-offs on spending would be mandatory random committee assignments every two years. It’s absurd that generally the only people overseeing farm programs are people who are in the bag for farmers. It’s an obvious conflict of interest.

It would be much better if we had one of the senators from, say, Rhode Island chairing the Agriculture Committee, because that state receives less farm subsidies than any other. A Rhode Island senator would be more likely to dispassionately balance the trade-offs of the $20 billion or so of pain imposed by taxes to support farm subsidies with the benefits of farm subsidies (if any).

About That Vision Thing…

Does the world need a “shared vision on food and agricultural trade policy”? So says World Trade Organization Director General Pascal Lamy:

Let me start by saying that food and agricultural trade policy does not operate in a vacuum. In other words, no matter how sophisticated our trade policies may be, if domestic policies do not themselves incentivize agriculture, and internalize negative social and environmental externalities, then we will always have a problem.

Here I question what exactly Lamy means by “incentivize”.  Does he mean “make sure we get incentives right”, or does he mean “provide positive incentives to agriculture”? The former probably is harmless if it means simply allowing market forces to work, the latter a potential opening for the types of subsidies and price supports that have done so much damage to agricultural trade policy. Ditto with his wish to “internalize negative social and environmental externalities”: on the face of it, this is a fairly inoffensive goal, and a positively noble one if he is referring to, say, the effects on poor farmers abroad stemming from rich country farm subsidies. But I can see all sorts of nefarious social policies flowing from that prescription if it gets into the wrong hands.

Lamy goes on to make sensible points about the effects of tax policy on agriculture, and makes this statement about the importance of free trade for food security:

To my mind, global integration allows us to think of efficiency beyond national boundaries. It allows us to score efficiency gains on a global scale by shifting agricultural production to where it can best take place. As I often say, if a country such as Egypt were to aim for self-sufficiency in agriculture, it would soon need more than one River Nile. Which basically means that global integration must also allow food, feed, and fibre to travel from countries where they are efficiently produced to countries where there is demand.

All necessary, if not sufficient, conditions for global food security, to be sure. But Lamy then turns to exactly what a global vision for agriculture might involve:

I believe that we could all agree on what the basic objectives are that we seek from our agricultural systems. We all want sufficient food, feed, fibre and some even want fuel. We want nutritious food and feed. We want safe food and feed. We want a decent and rising living standard for our farmers. We want food to be available and affordable for the consumer. We want agricultural production systems that are in tune with local culture and customs, and that respect the environment throughout a product’s entire life-cycle.

Hmm. I’m not sure about all that. For one thing, some of those goals seem potentially in conflict. United States sugar policy, for example, has shown us the results when consumers’ desire for “affordable” food conflicts with sugar farmers’ desire for a “decent and rising living standard” (hint: it’s not the consumers who make out like bandits). Similarly, it is at least conceivable that food grown “in tune with local culture and customs” might be more expensive, or make food less abundant, or even less safe. And if those goals can be in conflict within a country’s borders, I shudder to think what such an overburdened agenda could do to the already-struggling global trading system. At the extreme, a call for a “global vision” of agricultural trade policy could see the return of international commodity agreements and other supranational management nightmares of the mid-late 20th century.

On balance, the WTO has been a force for good in freeing agricultural trade. For sure, commodity markets are still very distorted, and the whole mercantilist basis of the WTO must be questioned. But by trying to harness the desire of exporters for more customers to counteract the pressure on governments to protect domestic industries, the WTO has done much good in the world. Pascal Lamy is right to encourage countries to stay on course with the Doha round of trade negotiations. I just hope that encouraging a “global vision” for agriculture, and pointing to vague notions of “social externalities,” doesn’t run against his stated purpose of freeing farm trade.

More on Cato’s work on agricultural trade policy here.

The War in Afghanistan Is about to Turn Nastier

afghanistanWhile Iraq’s security situation has been improving–though the possibility of revived sectarian violence remains all too real–the conflict in Afghanistan has been worsening.  The challenge for allied (which means mostly American) forces is obvious, which is why the Obama Administration is sending more troops.

But the administration risks wrecking the entire enterprise by turning American forces into drug warriors.

Reports the New York Times:

American commanders are planning to cut off the Taliban’s main source of money, the country’s multimillion-dollar opium crop, by pouring thousands of troops into the three provinces that bankroll much of the group’s operations.

The plan to send 20,000 Marines and soldiers into Helmand, Kandahar and Zabul Provinces this summer promises weeks and perhaps months of heavy fighting, since American officers expect the Taliban to vigorously defend what makes up the economic engine for the insurgency. The additional troops, the centerpiece of President Obama’s effort to reverse the course of the seven-year war, will roughly double the number already in southern Afghanistan. The troops already fighting there are universally seen as overwhelmed. In many cases, the Americans will be pushing into areas where few or no troops have been before.

Through extortion and taxation, the Taliban are believed to reap as much as $300 million a year from Afghanistan’s opium trade, which now makes up 90 percent of the world’s total. That is enough, the Americans say, to sustain all of the Taliban’s military operations in southern Afghanistan for an entire year.

“Opium is their financial engine,” said Brig. Gen. John Nicholson, the deputy commander of NATO forces in southern Afghanistan. “That is why we think he will fight for these areas.”

The Americans say that their main goal this summer will be to provide security for the Afghan population, and thereby isolate the insurgents.

But because the opium is tilled in heavily populated areas, and because the Taliban are spread among the people, the Americans say they will have to break the group’s hold on poppy cultivation to be successful.

No one here thinks that is going to be easy.

Indeed.

The basic problem is that opium–and cannabis, of which Afghanistan is also the world’s largest producer–funds not only the Taliban, but also warlords who back the Karzai government and, most important, the Afghan people.  The common estimate is that drugs provide one-third of Afghanistan’s economic output and benefit a comparable proportion of the population.  Making war on opium inevitably means making war on the Afghan people.

As both Ted Galen Carpenter and I have been arguing, most recently in speeches to various World Affairs Councils, diverting military attention to the drug war risks the entire enterprise in Afghanistan.  Already some drug-running warlords have been refusing to give intelligence to allied commanders and are killing government anti-drug officials.  Broader popular sentiments also turn against the allies when they deprive farmers of their most remunerative livelihood.

Washington has no obvious long-term answer to the opium trade–only legalization/decriminalization would take the money out of illicit drug production, but American politicians refuse to admit the obvious.  In any case, the Obama administration should focus on the war against the Taliban and al-Qaeda.  Ultimately, we should emphasize a solution which safeguards America’s fundamental security objectives in Afghanistan, namely, which precludes any terrorist training camps and sanctuary for those who attack Americans.  Once we achieve these goals and bring American military personnel home, we can debate doing more about Afghanistan’s opium fields.

The Global Economy Is Not Immune to Swine Flu

World governments should be careful not to play politics with the Mexican swine flu outbreak. The health consequences should of course be rigorously addressed—but without adding economic consequences, which is what several countries appear poised to do.

Public health scares have a history of seeping into trade policy without anything resembling sufficient consideration of the evidence. Governments in Russia and East Asia are already banning pork exports from Mexico, even though there is zero evidence that they pose a health hazard. It hearkens back to unfounded bans of U.S. beef in recent years by the European Union and South Korea.

If the U.S. government jumps on board, U.S. exports could be targeted for retaliatory trade actions. One quarter of U.S. pork production is exported, as well as billions of dollars of our soybeans used as feed by foreign hog farmers.

Exploiting this crisis could turn what is so far a manageable health problem into an unnecessary trade and diplomatic conflict. Obviously the global economy does not need the extra strain.

Feds Pay Farmers to Till the Desert

No, this headline and story is not brought to you by The Onion.

The latest proof that there’s nothing more permanent than a temporary federal program:

As drought forces families in the West to shorten their showers and let their lawns turn brown, two Depression-era government programs have been paying some of the nation’s biggest farms hundreds of millions of dollars to grow water-thirsty crops in what was once desert.

My sympathy for this farmer lies somewhere between that which I have for Bernie Madoff and Ted Stevens:

Jim Hansen, a 69-year-old cotton grower in California’s Central Valley, said his family business would crumble if the government took away low-cost water and the nearly $1.7 million in crop payments he received in 2007 and 2008.

For more on the insanity that is federal farm policy and why the USDA needs to be downsized and/or done away with, click here.

Friday Podcast: ‘Obama’s Afghanistan Strategy’

President Obama has unveiled his plan for the war in Afghanistan, taking a more regional approach than the U.S. has in the past.

In Friday’s Cato Daily Podcast, foreign policy analyst Malou Innocent says it’s a critical step in the right direction, but stabilizing Afghanistan and fighting an insurgency can’t be accomplished while killing the livelihoods of so many Afghan farmers by destroying opium poppy.

In the future we should take Afghanistan as it is, rather than what we want it to be. So not only does that mean having a decreased reliance on a central state government from Kabul, but also understanding that many of the farms from these rural areas rely on the opium poppy crop for their own livelihood. So we should focus our efforts to targeting those who are in cahoots with   insurgent groups and not simply those who are depending on it for their livelihood.

Her forthcoming paper, “Pakistan and the Future of U.S. Policy” will be released next month.