kickAAS

Gogol's classic novel about Rusian landowners buying and selling "dead souls" or serfs for their own profit lives on - in America. According to this report 234 dead people in South Florida were still receiving agriculture subsidies in the form of pay cheques. If South Florida is typical of other places the bill for the welfare state of the dead could be huge http://bit.ly/rOhKkU

I haven't been blogging much as nothing has been happening with the international trade talks to reduce subsidies - but the issue is still vital. The latest OECD report says that the current level of high prices offers a good opportunity to reduce farming subsidies and points out that the European Union's support amounts to 22% of farm incomes against 4%v in the US http://bit.ly/qmAkEu

Meanwhile in Switzerland . . .

An interesting story suggesting that behind the scenes the technocrats are beavering away in Switzerland to demolish the road block of technicalities that is preventing a conclusion to the oh so long-running international trade talks designed to boost the global economy by, among other things, removing subsidies to agricuture. If President Obama could pull this one off then his popularity ratings would get another kick-start. And that would be only a small part of the benefits to the world economy particulary developing countries currently priced out of the maket for primary products by excess Western subsidies.

 

 

Will Obama come to the rescue of the trade talks - or vice-versa?

Could 2011 be the year when Obama improves his popularity by rescuing the almost moribumd world trade talks to reduce agruculture subsidies? Details here.

Quote:

"The 2008 U.S. offer centered on a 70% reduction to the current $48.2 billion cap on overall trade-distorting subsidies (OTDS) and was deemed insufficient by almost all WTO members.

President Obama should top his predecessor's offer with a new proposed 80% reduction (to $9.64 billion) in OTDS, coupled with a commitment to eliminate all trade-distorting cotton subsidies."

An interesting slant on the trade talks - the US is accused of paying hush money to Brazil while it keeps scattering ludicrously high subsidies to US cotton farmers to overproduce cotton thereby depressing the world price for cotton farmers in places such as Africa which ought to have a comparative advantage in growing this crop. http://bit.ly/bydQDq

How to cut the deficit and help the world at the same time

Sorry for the delay in posting. This has partly been because of technical difficulties due to a change of email which prevented me getting access to the site and partly sheer exhaustion with the task of saying the same thing - kick all agricultural subsidies - in a diferent way.

 The truth is there has never been a better time to cut subsiies in terms of economics. Abolishing farming subsidies would cut the budget deficits of leading countries such as the US, Japan, Germany, France and the UK while giving a parallel and connected boost to the Third World which could grow cotton and other crops without fear of being undercut in the market by heavily subsidised Western crops. Poor countries would then have more money to spend on Western goods - the start of a virtual spiral. But common sense doesn't butter parsnips. We seem as far away as ever from a successful re-kindling of the Doha international trade talks. Which is not a pity. It is a tragedy.

Beat this - the US government is going to give subsidies to rich Brazilian farmers so they can continue to give even larger subsidies to rich US farmers. http://bit.ly/cFWTzD
This is Catch 22 in a permanent loop.

I don't like the sound of the President doing a U turn on agriculture subsidies so early in his administration.

http://bit.ly/8zcR5m

What is it about the power of the farming lobby that captures every government no matter what they say in their pre-election manifestos? If only the poor had such political power.

Hey, here's a good bit of lateral thinking. President Obama can fund a big chunk of his healthcare plans by switching the billions of dollars handed out in subsidies to farmers and corporations that don't need it to those in poor health who do. http://bit.ly/7HZfRu

Is anyone out there listening?

China asks for elimination of all agricultural subsidies  http://bit.ly/QyuCr - Yes, yes, but is anyone out there listening any more?

How green was my subsidy?

_{We haven't blogged recently simply because there is scant sign of serious political reform. However, the prospect of the green revolution being used as a lever to bring reform about is real. As businessGreen reports  "there are $250bn worth of fossil fuel subsidies across the G20 that could be diverted help accelerate the transition to low-carbon technologies. It also recommends that governments phase out agriculture subsidies as another way to cut emissions.}

The corporations that farm money

A timely reminder from  the Daily sTelegraph abou how many of the subsidies suppposedly channelled (inefficiently) to agriculture aren't actually going to farmers  but to corporations

Keep banging the Drum for the Doha talks

Read Kevin Drum's take on the stalled Doha talks for a very succinct summing up. Sample:
"Trade talks aren't quite that bad.  But they're close.  The Doha round in particular lives or dies based on the willingness of rich nations to substantially reduce tariffs and subsidies on agricultural products, and seriously, what are the odds of that?  We can't even have a serious discussion about reducing subsidies on corn ethanol, possibly the stupidest use of taxpayer dollars in the past century, let alone reducing farm support payments to ConAgra and Archer Daniels Midland.  Meanwhile, the European attitude toward farming makes ours look positively levelheaded and beneficient.  Paris would probably go up in flames if EU farm payments were ever rationalized."

A fresh plea from Africa

A fresh plea from Africa saying that the best thing the West could do  for the continent is to abolish agriculture subsidies in the US and Europe. We have heard this before and nothing has happened. But if Barack Obama doesn't get this message then who will?

The tinkering begins . . .

President Obama starts tinkering with US agriculture subsidies - but radical reform is still not on the horizon as we carry on waiting for a resuscitation of the Doha world trade  negotiations.

Green shoots of change?

Interesting article in the New York Times suggesting that change may be in the air with the new  administration of Barack Obama - but reminding us that even the much reviled Bush administration came into
power with a plan to reduce agriculture subsidies only to meet a wall of resistance from Congress.

The green shoots of common sense

Well, it's a start. After months of near-silence Barack Obama has made a statement criticising misdirected large subsidies in farming while Pascal Lamy (haven't heard from him for a long time)  claims that finishing the stalled world trade talks  could provide a stimulus during the international depression. Amen to that

Obama's first move . .

News that Tom Vilsack former governor of Iowa has been confirmed by the Senate as the US's new agriculture secretary is good and bad news. Good that he is hot on improving nutrition for children and renewable energy. But bad because not much is known about his stomach fior a fight over agriculture subsidies beyond support fot the new President's desire to impose a "hard"  cap on farm subsidies at $250,000, a proposal that will be a boom time for lawyers working out ways to get around it.
Meanwhile there is no sign at all of an end to the current trade talks despite high hopes for a deal at the end of last year.

Will Obama's choice of former Iowa governor Tom Vilsack  to head the US Department of Agriculture do anything to shift the subsidies mountain? The Boston Globe thinks not. And, sadly, we must agree. Unless there are some surprises in store . . .

Obama's Achilles Heel . . .

Oh dear, look at who Barack is thinking of as agriculture secretary. I'm a huge fan of the President-elect but . . .

Who is ahead in the race to abolish farm subsidies?

There is no doubt which candidate in the US Presidential elections has the most cogent policy on agriculture subsidies. Whatever people may think of John McCain overall there is no doubt he has a long and honourable stance on the abolition of agriculture subsidies - including ethanol. Th question is - will Barack Obama change if elected and faced with the reality of power?

Jumping the last fence

Pascal Lamy, director general of the World Trade Organisation has proposed a fresh meeting  within the next few weeks to  solve the  problems that stymied the last talks in July. It sounds as though he wouldn't be doing this unless he had already largely negotiated the issue at stake — the degree to which developing countries can raise agricultural tariffs in an emergency.
There is another factor that, perversely, might accelerate a deal - the enveloping world financial crisis. There is  nothing like a global crisis to concentrate the mind. It surely shouldn't be difficult for governments that are rescuing their biggest  corporations on a daily basis to jump the last fence in the protracted race to boost developing countries by abolishing unfair western subsidies that pevent them operating on a level playing field.

New media to the rescue

Thanks to Luis Garcia-Andrade Ferriz for putting  this video on YouTube and Facebook. We have not been using new media enough to get the message across.

Luis has started a group on Facebook to try to drum up support which complements a KickAAS group also on Facebook

Go the last mile . . .

Recent rumours that the stalled Doha trade talks may be rescued from death will be fanned by this report from the OECD urging the participants to "go the last mile". The WTO’s Director General Pascal Lamy,claims  ministers were in reach of a package that, if agreed, would make the Doha Round one of the most successful rounds of GATT/WTO negotiations ever. The new ingredient is to use the  Doha agreement as a weapon to inject more growth into the  stagnant world economy

Doha bites the dust

It will be some time before blame can properly be allocated for the collapse of the international trade talks.It is in the first place a tragedy for world governance. If agreement cannot be reached over the reduction of unfair agriculture subsidies - where economic and ethical arguments combine- then what hope does that leave for a solution to all the other problems that globalisation has thrown up?
One of the key problems thrown up is the extraordinary power of producer lobbies as reflected in the power a tiny proportion of farmers and associated lobbies can wield over politicians seeking re-election. The voice of the consumer in America (let alone the poverty stricken farmer in Africa) never got a serious look in. One of the challenges of the next decade is to harness the potentially formidable power of the new networks on the web to counterbalance the force of the international lobbies. Any ideas?(Written on a phone in a broadbandless part of France)

Subsidies: welcome back to the hall of mirrors

At last, there are signs of movement in the international trade talks that have been stalled by the reluctance of industrialised countries (especially the US, Europe and Japan) to give up agriculture subsidies.
The US is offering to reduce its ceiling on farm subsidies from $48 billion to $15 billion - as long as developing countries reduce their  import restrictions. Now $15 billion is still $15 billion too much - but it sure sounds like a giant step in the right direction. Except that, as Lisa Schlein points out high farm prices meant that actual hand-outs amounted to only $7 billion last year. So it is all being done by mirrors again.
In truth agriculture subsidies - which prevent developing countries from exploiting their own farming advantages - are immoral and economic madness in their own right. They should be abolished unilaterally and not made conditional on developing countries giving quid pro quo concessions. The sky-high price of food products at the moment has created a boom that ought to provide the ideal moment to abolish them altogether with minimum damage to farmers (while providing much needed income to governments which won't have to shell out so much in subsidies). But at least the international trade talks are still on the road. We should be thankful for small mercies.

The US is bad . . but the EU is even worse

An interesting article in Newsweek points out that soaring food prices provide a major opportunity to reduce agriculture subsides without too much hardship but the opportunity has been lost because US politicians - though not President Bush - saw them as an easy way to appease strong lobbies. It also reminds us that the US isn't the only country whose farm subsidies undermine agriculture in the developing world. Europe, it  says, is even worse.

Queue up for a $1,000 cashback

Thanks to Jim Matheson for  pointing out that when farm subsidies were introduced in the 1930s, Secretary of Agriculture Henry Wallace called them "a temporary solution to deal with an emergency." That emergency, says Matheson, was collapsing farm incomes affecting 25 percent of the population then living on farms. Temporary can mean a long time in politics.
But far from being reducing the cost of subsidies the new bill expands them by $25 billion to $289 billion despite the fact that soaring prices for agriculture products are making farmers richer.
But hang on. If I am doing the math correctly that $289 billion is costing the US's 300 million citizens approaching $1,000 each. So if subsidies were abolished two things would happen. Developing countries, freed from unfair competition,  would be able to grow crops they are good at - such as cotton and sugar - giving them the biggest economic boost in recent memory. Second, not only would this not cost the US (and, of course Europe and Japan) anything at all but they would get a cashback of $1,000 for every citizen. There is such a thing as a free lunch.

Helping to end the global food crisis

What's the best way to help the current crisis? Abolish subsidies, that's what according to a report in Global Nation, the Filipino online journal

A hunger for subsidies

The food riots in parts of Africa, Asia and the Caribbean have multiple causes not least a long-overdue surge in demand from people in developing countries eating more as they lift themselves out of poverty. But, as an editorial in the Washington Times reminds us, agriculture subsidies are also to blame. The diversion of corn crops to produce ethanol particularly in the US is a big contributor to the crisis while at the same time subsidised overproduction by the West has removed much of the financial incentive for  poorer countries, particularly in Africa, to grow their own crops.

Planting next year's subsidies

Here is an interesting post from The Harvard Crimson on the craziness of agriculture subsidies - even though it doesn't even mention the huge boost to developing economies that would result if US and other subsidies were withdrawn.
For what is happening in Africa now read this  article.

Sample:
Farmer’s need subsidies almost as much as hedge fund managers do. In an era of gaping budget deficits, it seems quite clear that the billions of dollars dumped into lining the pockets of America’s already affluent farmers could be better spent elsewhere. "In 2005, the government doled out $25 billion to farmers, which was 50 percent more than the amount received by welfare families."

The great agriculture welfare state (cont)

When 75 acres of Texas farmland was recently converted into a housing development, the new homeowners on these $300,000 properties became eligible for annual farm subsidies for their lawns, according to an article on Boston.com. Why? Because agriculture subsidies in the US are based on historical use so they continue after a change of use even if the new owners don't ask. And that is only one of the minor madnesses of US agriculture policy. You couldn't make it up.

Silence is golden . . or is it?

We haven't been blogging because nothing has been happening of late in the endless negotiations  over international tariff reform and the reduction of agricultural subsidies. But now the silence has reached another place: The President's State of the Union address.
I hadn't noticed it until I read this and I still don't know what it means. Does this silence mean the President is going to stand up to the farmers over subsidies or does it mean that he, um, just forgot. Any silence analysts out there with a take on this?

Farmers keep their snouts in the trough

As the Doha international trade talks rumble on between stalemate and inertia, it is business as usual for farmers in the United States. Once again the most powerful lobby in the world - farmers - has flexed its muscles and politicians have crumbled. As caller.com reports, the Senate has rejected measures that would merely put a cap on the rich subsidies that  farmers enjoy in the US and which prevent developing countries from growing similar crops economically.

Elimination of subsidies wold not only return money to US taxpayers it would also give an unprecedented boost to Third  World agriculture. It is not often that politicians are offered such a free lunch but once again they have bowed to the self-interest of a tiny minority of their constituents. What next? We will have to wait another five years before the issue is debated again . . . unless President Bush uses his veto on the bill. And pigs will fly.

World Bank discovers the agriculture problem. . .

Welcome aboard . . .

For the first time in 25 years, the World Bank’s annual report on development puts agriculture and the productivity of small farmers at the heart of a global agenda to reduce poverty, according to a report in the New York Times. Three-quarters of the world’s poor still live in the countryside.

The report found, the NYT adds, that "if European countries, the United States and other wealthy nations removed all tariffs and subsidies for cotton, soybeans and other oilseeds — practices that reduce the world price of those commodities and make it harder for unsubsidized farmers in poor countries to compete — developing countries’ share of world trade in cotton and oilseeds would be more than 80 percent in 2015 instead of only about half".

Meanwhile, the international round of trade talks to tackle this problem have all but ground to a halt because politicians are too scared to stand up the powerful lobbies that want to hang on to these subsidies. Could someone please post a copy of the World Bank's report to the key  negotiators . . .

Subsidies: dig a hole and bury them

The US has just revealed new figures showing that it spent $16 billion in  subsidies to its farmers every year between 2002 and 2005. Who cares? Very few people apparently. It's only money after all. Yet the truth is the US (and all the other  subsidy junkies) would be doing the world a favour if, instead of handing out taxpayers money to farmers, they simply buried it in a big hole in the ground. The US would be no worse off but millions of people in developing countries suddenly would be able to grow crops such as sugar beet and cotton that they are prevented from at the moment because of subsidised competition.. But, of course, if they didn't bury it the US would have  $16 billion more to spend on things that really matter.

Procrastination is the name of the game

Sorry for not posting recently. I think I must have caught the procrastination disease that is inflicting all the participants of the Doha international trade talks as they keep waiting for others to make a move, a game that could go on forever. The latest is China which, like everyone else in turn, has called for more flexibility. Rather than repeat the same thing every day I am lying low until something happens.
What is desperately needed, of course, is to get public opinion mobilised to abolish agriculture subsidies which, at a stroke would revive agriculture production in poorer nations while giving the rich countries a cash bonanza to spend on something else.
One way to achieve this is to use the new social networks that are springing up that, in theory, could spread the word to millions of people. I have set up a sister site (ASS - Agriculture Subsidies Suck) on Facebook. So far it has almost 100 signatures. Please add yours. Only a few hundred million to go . . .

A tale of two planets

The world produced enough food to feed 12 billion people last year - almost twice the world's population according to UN official Jean Ziegler,  yet 854 million people went without food. The reason? $350 billion dollars are being spent on agricultural subsidies by industrialised countries.

So what is being done about it? It's business as usual in the US where a subcommittee of the House Agriculture Committee unanimously rubberstamped an extension of existing commodity farm subsidies for the next five years, according to Taxpayers for Common Sense, an organization that monitors excessive government spending.

The Wilder side of subsidies

Arise Maurice Wilder, newly crowned  king of the subsidies. He received $2.5 million in farm handouts from 2003 to 2005, according to the Environmental Working Group, making him the single biggest single recipient. Even the Bush administration is becoming embarrassed by the welfare state created for farmers. The president is thinking of limiting handouts to farmers to an adjusted $200,000 per household.
This is a step in he right direction but per household? If this goes through stand by for a rush of downsizing among farmers as they split into smaller units owned by other family members or newly created companies to get round this. There is only one way to avoid abuse - abolish all farm subsidies now releasing  billions of dollars for the exchequer and giving poor countries a level playing field from which to export.

Name and shame . . .

The US administration is making it easier to discover the individuals who are the main recipients of America's massive distribution of subsidies to farmers according to CBC news. The trouble is they don't seem to have any shame.

Is there life after subsidies?

Amid all the drip fed rumours of eleventh-hour brinkmanship in the international trade talks - ranging from the new French government demanding bigger US concessions to US thoughts about replacing direct subsidies with "self support" schemes, let's remind ourselves  what life without subsidies could be like. Thanks to Azeem Azhar for the link.

Subsidies fatten the land . . . and you

Thanks to Carl Oberg for pointing out this article in the New York Times that I had missed linking the bad effects of agriculture subsidies and developed world obesity. In other words if richer countries got rid of subsidies they would not only save billions of pounds in financial support - they would also be much healthier. This problem is a no brainer even before you factor in the hugely beneficial effects of allowing developing countries to have a level playing field in their trade with the West.
And the Doha talks? With weeks to go before the final, final, final deadline, there is renewed speculation about a deal being cooked up.

Beating about the Bush

There have been no posts recently because, tragically, there is nothing to blog about let alone blag about. The world's leaders continue to go through a ritual dance of "I'll do something, but only if you do something first" as instanced by President Bush parroting for the umpteenth time that the US will cut tariffs but only if other nations agree to make tariff cuts. Meanwhile in the Third World . . .

What a good idea . . .

Farmers in Cyprus are up in arms about government proposals to tax farm subsidies. But why not? Nearly all of the economic research shows that subsidies are a hopelessly inefficient way of  organising agriculture and they have the disastrous side-effect of pricing developing countries out of products such as cotton where - without  subsidies - they would have a competitive advantage . They are in effect a benefit in kind - so why not tax them accordingly. May this idea roll and roll . . .

Meawhile a reminder for new readers of the extent of the problem. OECD figures show, according to the Times of India , that in 2004 countries spent more than four times their official development aid budgets on support for domestic farmers.

The long, long wait

While we are waiting for the seemingly interminable moment when there might be progress in the international trade talks here is a reminder why it is in the self-interest of countries such as the US to give up agriculture subsidies even before considering the galvanising effect it would have on the economies of developing countries.
Sample: "Agriculture is the most destructive land use in America".

The melting ice at Davos

The ski slopes of Davos in Switzerland are witnessing a melting of hard line attitudes against agriculture reform as trade ministers make a final attempt to get agreement before time runs out. Seasons observers of trade talks have seen the waves of optimism crash so often against the rocks of self-interest that they are trying not to be too optimistic this time.
That said there does appear to be some genuine movement. Robert Zoellick, former US chief negotiator says the US should offer deeper cuts while EU Trade Commissioner Peter Mandelson is busy droping hints that a breakthrough may happen in the coming weeks.
  Meanwhile the crucial G-20 alliance of developing nations, which has India, Brazil and South Africa as key members, is seeking a steep reduction in agriculture subsidies in return for US demand for deep reduction in customs duty. My view? Clearly something ambitious is being cooked up but the chances of a beleaguered US administration and a strongly protectionist French farming lobby from rolling over are still slim. But doomsday does concentrate the mind.

While the rich people ski . . .

Next month's US trade bill doesn't look like doing anything radical to cut US subsidies, unless the newly enfranchised Democrats unexpectedly get the bit between their teeth. According to Agriculture Secretary Mike Johanns, subsidies will be a bit lower and  involve some  redistribution from large to small farms (60% of which don't receive any subsidies) and towards projects that are good for the environment such as energy conservation.
Meanwhile attempts to revive the Doha international talks to reduce subsidies are continuing and will now switch to the upcoming gathering of rich nations on the Davos ski slopes. Not an obvious place to help the world's poor, but strange things can happen.

How subsidies screw small farms

Smaller, family  farms, far from benefiting from America's vast agriculture subsidies, actually get screwed according to an article in the Washington Post {picked up by the Idaho Business Review).

Sample quote: “The very policies touted by Congress as a way to save small family farms are instead helping to accelerate their demise, economists, analysts and farmers say. That's because owners of large farms receive the largest share of government subsidies. They often use the money to acquire more land, pushing aside small and medium-size farms as well as young farmers starting out.”

US subsidies: a whiff of garlic

While the rest of the world is trying to persuade the US and Europe to cut agriculture subsidies, a new problem is riding over the hill. There is a fresh group of farmers that so far has received no subsidies that is now demanding a share of the pie. The include garlic growers who have seen their market undercut by imports from China at half the price. If a Republican administration facing re-election caves in then the money will either have to come from the existing $15bn a year war chest  (which mainly goes to cotton, rice, wheat, corn and soya) or somewhere else. No one said subsidy cutting was going to be easy.

How subsidies undermine the efficient use of water

Everything is still pretty quiet on the subsidies front as the rest of the world waits to see whether the Democrat victory in the  Congressional elections translates into more effective action to reduce farm subsidies. It might if only because the Democrats are likely to take a harder stance on reducing the overall budget deficit but they will still be  subject to the enormous power of the farming lobby.
Among the most interesting recent publications is a report on water by the OECD, a fount of common sense, in the subsidies world. In theory the OECD reflects the views of its paymasters - including Europe, the US and Japan. If only they would listen! The report points out that subsidies to the farming sector, including lower water charges and financial help for irrigation undermine the efficient use of water.
  In the OECD Observer, the organisation's house magazine, there is a  good article analysing the adverse economic effects of agriculture subsidies which reminds us that "average agricultural tariffs are in the region of 60% of the price of imports, whereas industrial tariffs are rarely above 10%." Maybe that should be  stuck above the bedpost of every member of Congress lest they forget.