US Farm Programs, International Trade, and World Poverty
The Center is working with Oxfam, a world leader in international development, for more effective farm program payment limits.
US farm programs are in the spotlight as African poverty and development move up on the world’s agenda. The US cotton program has been attacked for its impact in West Africa, where small cotton farmers cannot compete with US cotton exports aided by farm program payments.
In some recent years, program payments have nearly equaled the price US cotton farmers received from the market. The resulting reduced income among Africa’s small farmers translates directly into hunger.
Current US farm programs were designed in response to legitimate concerns – growing international competition from mega-farms in Brazil and subsidized exports from the European Union. Small farmers in the developing world are suffering collateral damage in the battle.
Some critics have proposed ending all farm programs without regard to US family farms. The problem needs to be addressed, but there are better solutions.
Capping payments to mega farms and redirecting the money to rural development and conservation is a start. The Center has joined forces with Oxfam, the world’s leading international development organization, in seeking more effective payment limitations.
The European Union has taken related steps. Its recent reforms base more payments on historic production – to reduce incentives to produce and export at below-market prices. And it requires member nations to reduce payments for larger farms and use the savings to fund rural development programs. The US should match that by making the $3 billion in USDA cuts coming this fall by capping payments to mega farms.
The problem must ultimately be addressed in international trade agreements that set rules to ensure the benefits of trade are widely shared and extend to small farmers and rural communities worldwide. Without such rules, trade succumbs to the rule of the jungle, where the big prey on the small.
For example, labor and environmental standards are essential if trade is to benefit not only working people, but also small farms and businesses. The self-employed cannot pay themselves a middle class income for their labors and compete with multinational corporations that pay poverty-level wages to their employees – whether they operate overseas or at home.
Trade agreements need to make room for targeted programs that support small farmers, conservation, and rural development. They should provide latitude to nations that prevent severe agricultural market downturns by managing production. For example, nations that manage production should be allowed to take offsetting steps so their efforts aren’t undermined by a flood of imports or loss of export markets.
But we must also take a moral stance and oppose unfairness and injustice in rural Africa, just as in rural America. We can and must design policies to restore vitality to America’s family farms and rural communities that don’t sow poverty and hunger in the developing world.
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Center for Rural Affairs
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