The U.S. government transfers about $17 billion from taxpayers to farmers in an average year. Every man, woman, and child in the country gives more than $50 to a group smaller than 2% of the population. The average farming household will make $89,434 this year, well above the national average. Farmers hardly seem to need the help.
Farm subsidies have failed to lower food prices, cause overproduction of some crops, and underproduction of others. They are also the main reason the Doha Round of trade negotiations is at a standstill.
Rich subsidized farmers have largely shut out Third World farmers from the world market. Understandably, developing countries resent this. Many of them are refusing further action on Doha until the agricultural playing field becomes more level.
Enter U.S. Trade Representative Susan Schwab. To get Doha back on track, she is offering to cut U.S. farm subsidies by about 12 percent if other countries reciprocate. Schwab’s proposal is modest, but it is a start.
A better proposal would be to abolish the subsidies outright, even if the U.S. does it unilaterally. Schwab is basically saying, “OK, we’ll stop shooting ourselves in the foot. But only if you do, too.” Why not just stop shooting ourselves, period, no matter what other countries do?
The trouble is Congress. Farm subsidies are sure-fire vote-getters. The incentives just aren’t there for Congress to do the right thing, no matter how hard Schwab pushes them. And ultimately, it is Congress that has power over farm subsidies, not the U.S. Trade Representative. Meanwhile, Doha languishes.
Inertia Wins! 