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Hurtful Farm Subsidies

August 25, 2003

Forget the sunny image of the overall-wearing, straw-hatted farmer from Fresno or Peoria with hay flying all around him. Picture instead a rag-clad family scratching in the dust at a withering crop and starving in Africa, Asia or Latin America. Then wonder why the 146 nations of the World Trade Organization, meeting next month in Cancun, Mexico, can't hasten the pace to address rampant inequities in the global economy, especially in agricultural trade.

Listen to the reasonable voices in the WTO that suggest that Washington, Tokyo and the Europeans can start to wean their farmers from costly, wasteful subsidies and give a desperately needed boost to the developing world. This will be a nonstarter if WTO officials at Cancun try to tackle too much.

Yes, domestic subsidies, tariffs and other unfair impediments to free trade must fall. But it's unrealistic to think domestic handouts that mighty agricultural lobbies have wrung out of First World governments will disappear. These subsidies are staggering -- about $180 billion in the next decade in the U.S., a big chunk of it for sugar; $60 billion annually in the European Union, for products like beef, dairy and grains; and $31 billion a year in Japan, for rice and other products.

What might be shrunk, though, are unfair agricultural export subsidies: up to $5 billion annually for the Europeans and a modest $15 million for the United States. Robert Zoellick, the U.S. trade representative, has said he "would be happy to eliminate" these subsidies "tomorrow if we could get the Europeans to eliminate" theirs.

EU Agriculture Commissioner Franz Fischler has offered plans to trim European farmers' rapacious appetite for aid. The French resist, though, as do others who recall this subsidy's history. Europeans were determined after World War II never to go hungry again and to be self-reliant about something as critical as their food. But with surpluses abounding, what sense does it make for the rest of the world to subsidize farmers in Europe and elsewhere? How can industrialized powers hector everyone else about free trade and open markets when they maintain such hypocritical aid?

This is more than theory in the Third World, where there's often little to economies but agriculture and where farmers toil to grow and market crops, only to meet unfair competition from subsidized First World counterparts.

The WTO has sought to pry open markets, promote growth and back free trade with its 2000 Doha Development Agenda; a similar pledge was made at its 2001 Seattle meeting. Negotiators at least will go to Cancun with a framework for discussion, agreed on recently by the United States and the EU.

Enough with talk. It's time to make even small progress, eliminating some farm subsidies and bolstering global free trade.

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