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A Scourge Rooted in Subsidies

From Uruguay to Kenya, farmers face ruin, unable to profit as rich nations prop up their growers.

September 22, 2003|Hector Tobar, Sam Howe Verhovek and Solomon Moore | Times Staff Writers

TARARIRAS, Uruguay — In a land without droughts, floods or locusts, the plague that's wiping out Uruguayan cattle ranchers is called economics.

Their cows produce rivers of milk, their steers grow fat. But ranchers such as Juan Carlos Planchon can find few buyers willing to purchase their products at a worthwhile price. Many have sold off their land and moved to the city, leading the 61-year-old gaucho to show up at protests with a banner emblazoned with the slogan "Profitability or Death."

In nearly every corner of the developing world -- places as diverse as China, Kenya and Uruguay -- working the land is a way of life that seems perpetually on the verge of disaster, even as food and crops circle the globe as never before. The long-simmering frustrations of these farmers led the representatives of about 90 developing countries to stage a headline-grabbing walkout earlier this month at the World Trade Organization talks in Cancun, Mexico.

At issue was the most powerful tool the wealthier nations wield in the marketplace: $300 billion in subsidies that help their farmers flood the world with cheap corn, cotton and other commodities.

"I've been calling Montevideo [Uruguay's capital] to get the ambassador of the European Union to come out here so she can see what their subsidies are doing to us," Planchon said on his ranch, fields of clover cut through with shallow streams. "We call it economic terrorism, because they've wiped out more people with their subsidies than with any bomb."

African countries say their cotton sells for a song on the world market because producers in Mississippi and elsewhere get government payouts that lower their costs and make American cotton cheaper. Soybean producers in Argentina and corn growers in Kenya make similar complaints about the subsidies. In Europe, dairy farmers are subsidized to the tune of $2 per animal daily and ship off cheap milk products to Africa and Latin America. In Uruguay, the government seems to raise taxes whenever its farmers and ranchers bring in a bumper crop.

"Our country does not have any minerals or mines, or oil, or anything like that," Planchon said. Cows are Uruguay's gold, a main source of export revenue. "So the government has to pay off its debts with the money we farmers make."

American farmers argue that the subsidy payments are necessary to keep them from being wiped out by consistently low prices for their crops.

Upon signing a 2002 law that substantially increased the payments, President Bush said: "This bill is generous, and will provide a safety net for farmers. And it will do so without encouraging overproduction and depressing prices."

In most of the developing world, farmers and peasants are the bottom of the political pecking order. While hardships have long been a feature of rural life, those difficulties appear to have increased exponentially as leaders embrace the free markets that the WTO was created to nurture.

"I would love to dream about being a big farmer, but the reality is this," said Xi Jingen, a farmer in Beimuqiao, China, gesturing across his quarter-acre rice plot set against the hazy bluish backdrop of the Yangshan Mountains. Xi said he has never received a penny in government subsidies.

In California, by contrast, a single rice cooperative near Sacramento received about $27 million in subsidies last year.

"You mean farmers get paid extra money to grow their crops?" Xi said when told of U.S. subsidies. He then allowed himself a moment of fantasy: "Think of what I could do if I had some money to buy better equipment, a better thresher. I could grow so much more."

When Chinese officials think about investing in production, however, they usually think about industry. In the eyes of many officials, manufacturing is China's future and farmers are relics of a backward way of life.

Not far from Xi's rice plot rises the ever-expanding factory town of Suzhou, about 50 miles west of Shanghai. A fiber-optics plant and an electronics factory have opened nearby, and apartment complexes are being built to house workers.

Xi's small plot has shrunk over the years as the local government subdivides it to make room for other farmers who themselves have been pushed off their land by Suzhou's growth.

Rice farming has proved especially difficult this year, Xi said, because of a prolonged drought and a road construction project that has blocked most of the creek that he normally uses for irrigation.

"It is harder and harder to make any sort of a living off the land here," said Xi, a compact, sinewy man with a thick mop of black hair. He's been farming since he was 11 -- it's "the only thing I know how to do." Now he collects scraps from nearby construction sites and sells them to make ends meet.

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