Jimmy Carter’s grasp of economics apparently hasn’t sharpened in the 27 years since he imparted a wretched U.S. economy to his successor. Or perhaps his poor-man-advocate bona fides should be scrutinized more closely.
In a Washington Post op-ed today, the former president rightly protests the egregious U.S. farm bill for its continuation of lavish subsidies to American commodities’ producers. Carter explains how subsidies breed overproduction, which suppresses world commodity prices, thereby reducing the incomes of poor farmers in countries where commodities dominate the economy.
Carter favors proposed amendments to the current farm legislation that would replace subsidy programs with crop insurance programs to protect farmers against excessive loss, which is an improvement, though not a solution.
But, in the last paragraph of his article, Carter contradicts everything he writes before that, revealing himself to be no friend of poor farmers abroad or simply ignorant of economic processes. He writes:
I am still a cotton farmer, and I have been in the fields in Mali, where all the work is done by families with small land holdings. Cotton production costs 73 cents per pound in the United States and only 21 cents per pound in West Africa, so American farmers do need protection in the international marketplace.
Now wait a second. This is a very curious statement. If cotton production is so much cheaper in West Africa than in the United States, then more production should happen there and less should happen here. If Carter is really interested in the well-being of West African farmers, “whose scant livelihood depends on cotton production,” he should advocate free trade in cotton. Why instead does he advocate that U.S. farmers be protected in the international market place? West African incomes will continue to suffer if U.S. subsidy programs are replaced by U.S. tariffs, which is what Carter seems to be advocating. How does it help Malian farmers lift themselves out of poverty if they can’t effectively compete on their advantages? Higher U.S. tariffs would only drive down the world price (as subsidies do) and likely compel other importer nations to raise tariffs to protect their own producers, shrinking the market further for Malian farmers.
Meanwhile, does Carter have any empathy for America’s lower income families?Apparently, not enough. Protection of U.S. cotton farmers artificially raises the prices of textiles, which means that clothing and shoes are more expensive than they would be otherwise. Expenditures on necessities, like clothing and food, account for a higher proportion of the budgets of lower income families. Thus, artificially raising the prices of those products is akin to a regressive tax – it burdens those with less income disproportionately.
Perhaps Carter is not writing as the founder of the Carter Center, an international NGO, as the byline indicates, but as a small cotton farmer from Plains, Georgia, who believes the current subsidy system unfair because the big farms get most of the largesse.