How NOT to Fix the Global Food Crisis -- France Says Poor Countries Should Provide EU-Style Farm Subsidies, while U.S. Farm Bill Puts Vested Interests First

April 28, 2008
And now for a really bad idea: according to the Financial Times Michel Barnier, France's farm minister, told a food crisis summit in Berne that Africa and Latin America should adopt their own versions of Europe's Common Agricultural Policy -- massive trade-distorting subsidies -- as a response to rising demand for food. In fact, as those who have been tracking the crisis know, and as Anthony Faiola is explaining in a five-part series on the global food crisis in the Washington Post, restrictions on agricultural trade are part of the current problem. Instead of export resrictions and subsidies, Nancy Birdsall and Arvind Subramanian argued in an op-ed published in the Asian and European editions of the Wall Street Journal last week, the solution is to...
...promote trade and efficiency while also boosting agricultural production and reducing the vulnerability of the poorest around the world.
Unfortunately, U.S. agricultural policies, like those in Europe, continue to cater to special interests in ways that make the problem worse. Despite record high food prices, the 2008 U.S. Farm Bill, expected to pass Congress soon, would maintain a system that transfers billions of dollars annually to the largest farm operations. Roughly 70 percent of subsidy payments go to just 10 percent of the largest recipients and one version of the farm bill would allow farmers with incomes as high as $1 million to continue receiving subsidies. And this is touted as a "reform" measure because it lowers the income cap from the current $2.4 million (see the Environmental Working Group's Farm Subsidy Database). If that were not enough, despite the current global food crisis, the farm bill retains an additional subsidy to U.S. shipowners, as well as farmers, by requiring that U.S. food aid be purchased in the United States, packaged here, and much of it shipped to where it is needed on U.S.-owned ships. That means that roughly half of the already-inadequate U.S. food aid budget goes for distribution and transportation, rather than to feed hungry people in poor countries. Ensuring that food supplies are adequate and that poor people around the world can meet their basic nutrition needs is a critical problem that governments and international organizations around the world clearly need to address -- in both the long-term as well immediately. Replicating the distorting U.S. and European policies that transfer billions in taxpayer and consumer dollars to a handful of farmers in hopes that a little bit will trickle down to hungry people is not the way to go.


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