New York Times | October 19, 2003
Lubbock is a rock-solid, conservative kind of place, located where northwest Texas meets the southernmost part of the great American plains. Its citizens like to think of themselves as self-reliant straight talkers. It seems strange, then, to think of this region as a sprawling welfare case.
But the cotton farms that give Lubbock much of its identity thrive from huge government subsidies that drain the federal treasury and shelter the industry from the discipline of the market. The rest of the world rightfully regards those subsidies as unfair to poor countries, whose cotton farmers cannot compete against the below-cost prices at which American cotton sells.
America's cotton farmers are currently at the center of an international outcry against the way rich countries rig the trade game with protective tariffs or agricultural subsidies. "Judging by what's written in some Eastern newspapers you'd think I murdered my parents or something," says Ronnie Hopper, a cotton grower in nearby Petersburg. Mr. Hopper, 57, grows some of the most coveted cotton in the world on a 2,500-acre high-tech farm. But most years his costs exceed the global price, which is why he has relied on nearly a half-million dollars of subsidies since 1995.
"Why do you want to get rid of me?" asked Mr. Hopper, who works hard and plays by the rules as the government sets them. Like many farmers who receive subsidies -- a glaring exception to America's ostensible free-market values -- he argues that the United States needs some agricultural self-sufficiency and that no cotton farmer could break even at market prices.
Indefensible as the subsidies are, it's impossible not to feel sympathy for his situation. Lubbock is in the heart of the national cotton belt, and the idea that the United States is no longer well positioned to grow cotton at all is shocking in the top-producing cotton state, where in Dallas last weekend, Texas played Oklahoma in the venerable Cotton Bowl.
There is actually no sign that American cotton farmers are going to suffer from anything but hurt feelings in the short run. The 2002 farm bill's complex cotton subsidies will continue at least until 2007, giving farmers the right to a direct payment of 6 cents for every pound of upland cotton, plus loans pegged at 52 cents a pound. Besides helping growers pay off their loans if the price dips below that, Uncle Sam then makes what are known as countercyclical payments to allow farmers to obtain a lofty "target price" of 72 cents a pound. All told, with this web of federal supports -- which can exceed $3 billion in some years -- American taxpayers often end up footing as much as two-thirds of the cost of growing America's exported cotton.
This helps the United States, among the world's highest-cost cotton producers, rank first in exports. Dumped abroad at below cost, our cotton depresses prices and hurts farmers in poor nations like Mali or Burkina Faso that cannot set aspirational "target prices."
African farmers are aware that they are competing in a fixed game -- many believe, incorrectly, that President Bush is a cotton farmer himself. They are rightfully outraged that a nation that enjoys all the benefits of open markets for its industrial products keeps putting up walls around its farmers.
At the recent World Trade Organization meeting in Cancun, where attempts to reform the agricultural trade rules ended in failure, widespread outrage against American cotton subsidies dominated the headlines.
If all protectionism disappeared tomorrow, the poor farmers of the world would not all benefit. Small corn or wheat growers abroad might not be able to compete against the huge, efficient farms of the fertile American Midwest. Peasants with tiny plots of land would inevitably give way to bigger agricultural enterprises. There is no magic fix to a world order in which the rich countries invariably hold most of the cards. But the global community has to start moving in the right direction, giving farmers in the poorest countries an opportunity to compete where they have a chance to do so.
The "cotton-picking truth," as they might say in rural Texas, is that the United States has no business growing 16 million bales of cotton a year. Continuing to deny this reality is patently unfair. If the United States eliminated the subsidies, the world prices for cotton would rise, helping farmers overseas but having minimal effect on consumers (there is only about a dollar's worth of cotton in a pair of jeans). It would save the American taxpayers billions of dollars, and it would allow Americans to strike a very visible blow for fairness between rich countries and poor.
The pain in Lubbock, of course, would be real, as it is in any region where new economic patterns deal a mortal blow to a local industry. The government needs to help such places make the transition to businesses with a future. But it cannot afford to prop up inefficient ventures forever. It is not fair to other regions that were forced to accept change, lost jobs and an end to old ways of life. It is not fair to the poor, cotton-producing countries. The subsidies are a bad deal for everyone but the American cotton farmers, and they leave the United States in an unconscionably hypocritical stance when it faces the rest of the world. Free trade cannot work a la carte, only for those sectors where we stand to win. Harvesting Poverty: Editorials in this series remain online at nytimes.com/harvestingpoverty.
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