Funding for all agricultural programs in the United States has grown over the years to over $55 billion a year. In Europe, farm subsidies take the form of tariffs and quotas on food and amount to 50 billion Euros a year. There are those who say that’s not fair and the subsidies hurt world trade and developing nations.
The world’s poor nations tend to be heavily dependent on agriculture, and they complain that the American and European Union farm subsides spur growers there to produce gluts of agricultural products that depress crop prices around the world. They have complained to the World Trade Organization, and the WTO has hosted negotiations aimed at – among other trade issues – reducing or eliminating farm subsidies.
The first round of those negotiations produced what’s known as the Uruguay Round agreement. It cut back on agricultural tariffs, tried to limit domestic farm subsidies, and cut export subsidies. The Uruguay agreement was in force between 1995 and 2005, and a new round of negotiations began in Doha, Qatar, in 2001.
By the end of 2009, the Doha negotiations have gone, essentially, nowhere. But the calls for an end to agricultural subsidies have continued, and concerned farmers have continued to assert that they need a safety net for a risky business.
In Europe in 2008 and ’09, milk producers tried to organize a strike and dumped milk into streets, hurled eggs, started fires and blockaded the EU’s headquarters building with tractors and cows. They were protesting low prices for their milk and cuts in subsidies.
In the U.S. in 2009, President Barack Obama tried to limit farm subsidies by prohibiting direct payments to farms with annual gross receipts of over $500,000. Congress quickly killed the proposal with key representatives and senators pointing out that many farmers would fall into the category and many of those weren’t making a profit on those gross sales.
There seemed to be little interest on Capitol Hill in cutting back farm subsidies in 2009.
Professor Don Lee doesn’t believe farm subsidies will end anytime soon. “What happens on our farms is too important for the rest of the world,” Don says. “It’s important in terms of the stability of our food supply, but also important in terms of the impact of what we do on our environment.”
As American agriculture is increasingly integrated into the global marketplace, subsidies will be a hot political target, and the debate will continue.
Written by Bill Ganzel, the Ganzel Group. First published in 2009. A partial bibliography of sources is here.