Bush to EU - Give up farming subsidies.

From this article in todays Times
“PRESIDENT BUSH yesterday challenged EU leaders to scrap massive subsidies paid to their farmers, saying free trade with Africa would eliminate the need for Third World aid.
Mr Bush, on the eve of the G8 summit in Gleneagles, said that Europe paid “tremendous” agricultural subsidies, and that the US was ready to drop its own payouts to American farmers if Europe had the courage to do the same.”

I think this is a fantastic idea, and for once find myself supporting George W., whar are the chances of this actually occuring? Will the US Congress and voters support such an idea?

I don’t have any personal experience of US politics other than that which I saw during the elections, so i have no idea how protectionist people might be towards subsidies in the US. As far as European politics is concerned I suspect that the French particularly and then Germany will do as much as possible to sabotage any moves to get rid of subsidies as they are the highest recipients of this kind of aid.

What doe others here think? Good idea, bad, or unworkable?

Spain and France, in that order, I suspect. Germany contributes more to CAP funds than German farmers receive back - but there is significant political support for the CAP anyway because our landscape would probably change out of all recognition without agricultural subsidies.

I don’t think the proposal is viable because:

  • while the EU is theoretically in a position to abolish all agricultural subsidies (having the competency for agricltural policy assigned from its members by treaties) the US would only be in a position to abolish federal agricultural subsidies

  • the EU would have to concede twice as much as the US
    Agricultural support (as % of agricultural output), 2003, as per OECD definition (cite, German-language, p. 187 bottom right)

  • US – 18%

  • EU – 37 %

  • Norway – 72 %

  • Switzerland – 74 %
    (and Norway and Switzerland would have to concede twice as much as the EU, four times as much as the US…)

  • while I don’t know what the political support base of agriculture in the US is, in Europe it’s definitely not just farmers and related industries - the landscape of our countries as we have known it for the last few hundreds of years is a result of agriculture (Germany would be mostly forest and swamp without it). Less land under cultivation, and less/larger farms, would make the land look alien to us.

It should be noted that this is really just Bush’s way of diverting attention from the increasingly obvious need to actually do something about climate change and its effects on the poor countries (who, after all, did almost nothing to cause it). As John Simpson perceptively points out, “Of course he knows the CAP will never be entirely scrapped, and that anyway he will no longer be president if it is.”

The CAP will undergo radical restructuring in the next few years regardless of whether the US drops its own protectionism (and bear in mind that it wasn’t Europe who so blatantly violated WTO rules a couple of years ago.) If it scrapped (almost) entirely, I will welcome it.

But if European states, sadly, refuse and thus allow national interest to outweigh moral principle, they will only be following Bush’s own reprehensible example.

Ah, so a cynical ploy, rather than a genuine attempt to help the poor and needy of the world.

That’s a real shame, I feel that only through fair trade will Africa get the chance to overcome its problems. Aid is only part of the answer. For example Ethiopia has been recieving aid since the early eighties and is still in much the same state as it was then.

And as you said a diversionary tactic to draw attention away from the lack of any US activity on climate change (other than contributing to it).

Looks like the world is not going to get better anytime soon.

I suspect that both come into play on this-- a desire to help the poor, and no problem also using the issue as a ploy. Remember, we’re dealing with politicians here.

That aid, of course, being a drop in the ocean compared to their debt repayments (PDF). Live Aid was born from British bands releasing a single under the name “Band Aid”.
That charity in the face of such crushing debt has often been compared to putting a band aid on a cancer was clearly an irony nobody picked up on at the time.

Ethiopia now actually achieves enough food production to feed its people, but poor infrastructure and the inability to fund improvements thereto mean that people still go hungry. But it is nowhere near the utter desperation of 1985.

Behind the big words remains the fat that both the US and EU could drop some of the subsidies without looking in eachother’s direction. AFAIK, neither cotton nor tobacco is commonly grown in Europe, and I’m sure there are other examples.

Also, it’s not surprising that the two countries in Europe with the highest subsidies are mountain countries. When that is said, Norway is already importing 50% of its food consumption (maily from the EU and US, by the way). And to add even more facts into the debate, the main goal of food subsidies isn’t to protect farmers, but domestic food processing industry, places where there are far more jobs at stake than in agriculture (the ratio is like 4 to 1 to my recollection). What, you didn’t thnk that burrito was actually produced at your local farm, did you?

You’d be surprised. Tobacco is grown in France, and Spain refuse to stop subsidizing its cotton production.

So has Europe said “you first” yet?

Because African cotton would be more competitive here if we weren’t subsidizing cotton production. Caribbean sugar would be more competitive here if we weren’t subsidizing sugar production.

This is a classic “do as we say, not as we do” sort of thing.

It’s not like Bush is actually pushing for an end to domestic crop subsidies; in fact, he expanded them just a few years ago, IIRC.

I think this is the very first time Bush said something that made the news and that I can agree with 100%. Therefore I am going to forego any political cynicism and just outright back him on this.

(Btw, the local food processing industry can make an even better living off handling cheap imported rough stuff, if I understand anything about that trade)


One potential drawback (I don’t know enough about the economics or the industry to know if this would be the case) is that we’d no longer be able to meet our own food needs in an emergency situation. Would we need something analogous to the national petroleum reserve but for food?

Well, apparently you don’t understand anything about the trade, or the root of Africa’s economic probems.

Obviously, subsidies and import tariffs create a partially closed market which helps domestric industry. Converting to a truly open market will not make the Western food processing industry continue as usual by processing imported food instead of local food. That industry will outsource production (jobs) to low cost countries, importing ready made food instead of raw commodities.

Part of the problem in Africa is that they export raw commodities and import manufactured products (which they are forced to do because they have to open up their markets for Western products in order to become a recipient of Western aid). Several African countries are in fact net importers of food. This way they are never able to build an industry of their own, remaining mainly as farmers, unable to enter the industrial age.

Only by removing subsidies AND removing import tariffs for undeveloped nations only will the situation improve dramatically. Europe and the US will bleed in the process though, with unemployment rising 5%-10% some places.

I forgot to add:
Don’t get me wrong: It’s not a bad idea, but what Bush is saying is not out of concern for Africa. He knows (or his advisors know) that Europe is a big buyer of American food, and vice versa. Removing subsidies will first and foremost allow these two trade partners to buy more from each other, increasing economic growth for both. More than that has to be done.

It wouldn’t be a bad idea to maintain stockpiles of various cereals and pulses. You could store the stuff till it’s no longer fit for human consumption, then sell it for livestock feed. This would do very little to distort markets (just shift a bit of production from feed grains to food grains) and would give you time to spool up food production in a pinch. The other thing you can do to temporarily stretch the food supply is slaughter a bunch of pork/beef breeding stock, which will increase the supply of meat and simultaneously free up some corn and barley for human consumption. The downside is that you’ll be cutting into next year’s beef/pork production substantially, but in terms of agricultural resource allocation this is a good thing if the food supply is tight, as grain provides far more food directly than it does by running it through a pig to turn it into ham.

I suspect his real motive is to allow US farmers to compete more effectively with the EU.

I doubt that Mr Bush really gives a rat’s bottom about the poor and needy of the world. Or the poor and needy in the US for that matter.

He-he. If you believe that a country could go from relying partially on food import to self-sufficient within a few years (or less) you’re living a dream.

Just to grow wheat you need to:

  1. Chop down the forest
  2. Remove the roots and clear the area
  3. Plow
  4. Harrow
  5. Remove all rocks, harrow again
  6. Sow & fertilize

Not a small task by any means. Even if you got the will (national hunger), you’ll also need to store plenty of farm equipment for such an emergency plan. Thats in addition to the “food stockpiles” you’ll need while your waiting for your harvest.

To increase meat production you’ll need to breed animals, the pace limited by nature herself as you’ll have to start off with what you already got. You’ll also need to raise shelter for your newly-breds, and to feed them accordingly.

Thirdly, you’ll need the infrastructure: the veterinarians, the food quality control people, transport vehicles, food processing capabilities, and so on.

I guess it’s possible for a wo/man who’s already a farmer to increase production with, say, 20%-30% over a year, provided s/he’s got the money to invest and the manpower, but for a nation to be able to do the same is just outside reality.

It is no coincidence that rations were in effect for several years after WWII ended.

AFAIK, many developed nations already keep emergency stockpiles of wheat (in fact, when they replace these stockpiles the old wheat is sometimes given to third world nations as aid).

This is largely wrong. Where are there forests in Kansas, pray tell? The Great Plains are phenomenally productive farmland, and if taken out of production will be grasslands, which you can take a crop off of next year if you really need to. If you’re in a serious crisis, you can cut all sorts of corners on quality inspections and the like. You don’t need extra farm machinery, as what there is can be run for more hours. You don’t need more breeding stock for livestock - in fact you want less breeding stock - because livestock is the least efficient means of increasing caloric production there is. Livestock consumes far more calories worth of agricultural production than it delivers to the supermarket. The only real difficulty in achieving a sudden increase in ag production would be too much land reverted to non-productive status. That’ll take you a 1-2 years to overcome. In the meantime, you clearly have no idea of the incredibly vast quantities of corn, barley, oats, etc, that are fed to beef and pork on this continent, and wouldn’t need to be. Just divert those feed grains into human consumption. Sure, they’re not ideal food, but they’ll keep you alive, plus you can eat many of the animals they would have fed. There’s just no way North America is going to fall into a famine situation barring something sufficiently catastrophic that subsidized agriculture would be no buffer.

Part of the problem in Africa is that they export raw commodities and import manufactured products (which they are forced to do because they have to open up their markets for Western products in order to become a recipient of Western aid). Several African countries are in fact net importers of food. This way they are never able to build an industry of their own, remaining mainly as farmers, unable to enter the industrial age.

Only by removing subsidies AND removing import tariffs for undeveloped nations only will the situation improve dramatically. Europe and the US will bleed in the process though, with unemployment rising 5%-10% some places.

Although I’m sure that giving them an active trade advantage would help them more, I strongly disagree with your suggestion that cutting our own subsidies wouldn’t help. Our dumping of subsidised overproduction on African markets messes up the domestic trade. A local farmer cannot make a living out of growing livestock, say chicken, because he cannot compete with our 70 cent per kilo dump prices. If that practice is removed by cutting the subsidies, he can build up his business locally. They don’t immediately need to become net exporters of chicken at all.

So, it’s not the subsidies that harm Africa but the practice of dumping food cheaply, so that the local food production cannot devellop in the first place, let alone start exporting.

If that is what is keeping Africa down then the answer would seem to be to allow African countries to raise import barriers themselves, to protect their own farmers.

Hmm, I also feel a distinction in farming needs to be made.
Protecting trade products like cotton and tobacco are of a different category than actual food products.

I would feel very uncomfortable knowing Europe would not be able to feed its own people, should the need arise. A decline and eventual dissapearing of our ability to feed ourselves is by far more worrysome than the prospect of having to import shirts or smokes.