Western farmers fear third-world challenge to subsidies

By Elizabeth Becker

AIX-EN-PROVENCE, France, September 8, 2003, Cropchoice, NY Times: Christian Vachier, the last sheep farmer in his small commune north of here, is wondering whether his pastoral life in the Lubéron mountains is about to end.

Halfway across the world, Dean Argotsinger, who raises corn and soybeans on nearly 2,000 acres of land once cultivated by his father and grandfather outside Denison, Iowa, has the same worries.

Mr. Vachier grazes his flock on 36 acres of pasture and sends them off in the summer to wild mountain meadows, a land-intensive and expensive method underwritten by checks from the European Union and the French government. His lamb is never sold outside the region, much less overseas.

Mr. Argotsinger is a very different kind of farmer. He considers himself modern and efficient. He uses chemical fertilizers and receives more than $336,000 from the government every four years and sells his grain in the global marketplace.

But both farmers worry that they will be the targets when trade ministers from around the world meet in Cancún, Mexico, on Wednesday to begin deciding which subsidies to cut back in the wealthiest nations in order to lessen the damage the subsidies inflict on poor farmers in the developing world.

The world's wealthiest nations give more than $300 billion of subsidies to their farmers every year, more than the gross national product of sub-Saharan Africa. Those payments are now the biggest complaint of poor nations.

"It's ridiculous that rich farmers are getting richer and poor farmers are getting poorer," said John Nagenda, a farmer in Uganda and adviser to President Yoweri Museveni. "We are kept out of the world market. When countries like America, Britain and France subsidize their farmers, we get hurt."

Siphiwe Mkhize, agriculture attaché at the South African Embassy in Washington, said: "We would give up foreign aid if the farm subsidies were eliminated. The subsidies give the rich-nation farmers the upper hand in all markets, and we can't even compete in our own markets, much less theirs."

Mr. Vachier, however, said, "Why should world trade rules dictate whether French taxpayers can pay me to preserve our way of life and protect our countryside?"

Though he has different views about world trade, Mr. Argotsinger has similar complaints.

"The federal government made a promise to us farmers in the farm bill last year and all at once they're telling us the World Trade Organization can take that away from us," he said at his Iowa farm.

From the hillside vineyards of Europe to the dense cornfields of Middle America, dozens of farmers said in interviews that they were anxiously awaiting the outcome of the talks in Cancún, where the first order of business is farm policy.

In the past decade, the top quarter of farmers in the developed world have steadily gained most of the subsidies — 70 percent in Europe and 90 percent in the United States, according to the Organization for Economic Cooperation and Development. Those payments allow industrial-size farms to produce many more acres of crops than are needed for domestic consumption, and they are sold overseas at low, subsidized prices.

Farmers in developing markets cannot compete with the cheap imports. They lose out in their own markets and have little chance of exporting.

A recent American-European farm proposal disappointed many developing nations. Seventeen developing nations countered by asking the United States to make deeper cuts in its subsidies and Europe to eliminate subsidies that underwrite exports.

The U.S. and Europe: How Their Subsidies Differ

Subsidies began in times of hardship — during the Depression in the United States, to help farmers survive as their costs rose and market prices stagnated, and after World War II in Europe, to encourage farmers to increase food production and avert malnutrition.

But today Western countries are drowning in food, their citizens more likely to suffer from obesity than starvation, and the huge surpluses are sold cheaply overseas.

The American system — with farms 10 times larger than those in Europe — has grown the most lopsided. In 1995, the top 10 percent of American farmers received 55 percent of government subsidies; in 2002 their share rose to 65 percent, according the Environmental Working Group.

While Europe also gives more money to its larger farms, it is slowly shifting to reward small farmers like Mr. Vachier who raise expensive, high-quality food that is rarely exported, subsidies that are considered harmless to the developing world. "Cutting these subsidies to the huge farmers in favor of the small farmers would also help small farmers in the developing world," said Stefan Tangermann, author of the O.E.C.D. report.

Pascal Lamy, the top European trade official, said the answer for European agriculture "is shifting from quantity to quality." When the European Union grows by 15 countries next year, farm subsidies will be further diluted.

Philip Bloomer, director of advocacy at Oxfam, which lobbies against farm subsidies, said that while Europe, including France, is still among the worst offenders in farm policy, it is slowly understanding that it has to change.

"In Europe, we believe there is a glacial movement in the right direction," said Mr. Bloomer. "In the United States, there is a fairly rapid movement in the wrong direction."

The United States openly embraces increased trade as the answer for American agriculture, heavily subsidizing the biggest farms in an industrialized system that generates huge surpluses for export. Robert B. Zoellick, the United States trade representative, boasts that one out of every three acres in the United States is planted for export.

It is highly unlikely that either the United States or Europe will offer the concessions needed to undo the damage of the system.

"Our American subsidy system is a crime, it's a sin, but we'll talk a good game and get away with doing almost nothing until after the presidential election," said C. Fred Bergsten, director of the Institute for International Economics in Washington.

Agriculture is now one of the few sectors of the American economy where the United States runs a trade surplus, and American businesses that thrive on subsidized global trade want to keep the subsidy system in place.

In the past decade, industrial-scale farmers have tipped their allegiance decisively toward the Republican Party, which supports the current system. Political contributions from agribusiness jumped from $37 million in 1992 to $53 million in 2002, with the Republicans' share rising from 56 percent to 72 percent, according to figures compiled by the Center for Responsive Politics.

Those commercial companies were not disappointed when President Bush signed into law last year a new farm policy that increases permanent subsidies by $40 billion a year, even though Mr. Zoellick had promised the developing world that subsidies would be cut in this new round of trade talks.

"Reducing these subsidies and removing agricultural trade barriers is one of the most important things that rich countries can do for millions of people to escape poverty all over the world," said Ian Goldin, the World Bank's vice president for external affairs. "It's not an exaggeration to say that rich countries' agricultural policies lead to starvation."

The Name of the Cheese: Defending a Way of Life

For Europeans like Jean-Pierre Boisson, mayor of Châteauneuf-du-Pape, a small village in Provence, subsidies also represent survival of a centuries-old way of life and of the kind of traditional farming that produces the expensive, high-quality wine, olive oil and meat for which his region is known.

Europe's environmental programs receive a mandated 15 percent of the $46.3 billion in annual European farm subsidies.

The farmers around Châteauneuf-du-Pape worry that in Cancún, trade ministers with little understanding of agriculture and its effect on a nation's food system and countryside will cut the wrong programs.

Mayor Boisson is also watching carefully whether the trade ministers adopt a universal respect for geographic indicators, a form of copyright tying the name of a food product to its region. Those labels guarantee the authenticity of products like Roquefort cheese and grand French wines; for farmers like Mr. Boisson, those labels — and not government subsidies — ensure his profits.

Mr. Lamy, the European trade minister, has told colleagues that if the World Trade Organization is willing to support geographic indicators, he would discuss reducing export subsidies.

Phillipe Mauguin, director of the French government's Institute of Appellations of Origin, said the government hoped that 20 percent of French produce would eventually besold under a specialty labeling. France already sells $18 billion in products protected by appellations of origin.

"Without such labeling, there is zero protection for local people, zero protection for local culture," said Mr. Mauguin.

An Industry Remade: The Passing of the Farmer

Iowans like Mr. Argotsinger know what it means to lose the traditional farm way of life.

When the members of the Denison High School class of 1963 held their 40th reunion this summer, they counted only one farmer among them. Over cold beers and enchiladas, they guessed that at least 40 of the 108 men and women in their class were either raised on a farm or spent their summers on the farm of a close relative.

In one generation, they said, they became witnesses to the remaking of American agriculture, which has been turned upside down by globalization, altered federal farm subsidies and the demands of the "big guys" to make agriculture run on the principles of mass production.

"The subsidies let the big farms get bigger, and the big companies end up controlling everything around here, paying low prices for grain so they can control markets around the world," said Gaylord Moeller, the surviving farmer of the class of 1963. He said he had held on to the 160-acre farm originally settled by his German great-grandfather because he had resigned himself to living modestly.

Thomas Dorr, the under secretary of agriculture for rural development and an Iowa farmer himself, advocates the industrial-size farms and said in an interview that it was wrong-headed to view agriculture in terms of small farms versus large. American agriculture, he said, simply reflects the increased global market.

"Marketplaces are always going to change, they are always going to fluctuate," he said. "Everybody always frames it in small versus large instead of where the opportunities are."

Mr. Zoellick, the trade representative, has proposed cutting over $8 billion in subsidies, but only if Europe makes deeper cuts.

Keith Collins, the chief economist at the Department of Agriculture, said there is "compelling evidence" that subsidies do increase production, distort trade and undermine poor countries.

"Payments increase production and production increases exports," Mr. Collins said in an interview.

This American emphasis on exports has not only increased the size of the farms, but has also limited what is grown on them.

When Denison's boomers were born in 1945, Iowa's farmers grew 17 commercial crops, including potatoes, cherries, peaches, plums, pears, strawberries, raspberries and wheat. Farmers sold vegetables from their truck gardens at harvest time.

Now the commercial crops are down to four — feed corn, soybeans, hay and oats — and Denison has a hard time filling a farmer's market one afternoon a week.

"It's easier to get fresh fruits and vegetables in Des Moines now than it is in Denison," said Cecelia Servoss Arnold, a member of the class of 1963.

Denison is the birthplace of Iowa Beef Packers, among the first slaughterhouses to use a modern assembly line system that revolutionized the meat industry by eliminating the need for most skilled labor.

Grain farms like Mr. Argotsinger's literally fed those new slaughterhouses by raising the crops needed to feed the hogs. Soon an industrial system was introduced to raise enough hogs to be killed by the tens of thousands every day.

Farmers emptied their barnyards and built factory-size sheds in the rolling hills. They pack hundreds of hogs into each building, feeding them with automated tubing and siphoning off their excrement into open vats known as manure lagoons.

While the odor and pollution are causing political battles in the state, supporters say they are an integral part of the new industrialization of agriculture.

"We're part of a global protein market," Mr. Argotsinger said. "I'm growing corn for meat that will be sold to China."

Source: http://www.nytimes.com/2003/09/09/international/europe/09FARM.html


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