Omaha World Herald | December 26, 2003
The debate over agricultural subsidies is probably about to get a lot hotter. A long-tanding clause in the World Trade Organization agreement, which protects countries' ag subsidies from WTO disputes, expires at the end of the year.
That may not lead to an immediate onslaught of wrangles, but it probably will mean that groups of countries will challenge subsidies on specific commodities, such as cotton or soybeans.
A WTO challenge to U.S. steel tariffs prompted President Bush to drop that import tax recently.
Ag subsidies by rich countries such as the United States and those of the European Union are already under fire from poorer countries and are among the reasons WTO talks broke down at a negotiating session in Mexico this year.
Farm Bureau trade specialists say producers shouldn't be overly worried about the expiration of the clause (known as the peace clause), as cases would take several years to play out. But the additional media attention - and the cost of those WTO challenges - is likely to increase the domestic anti-subsidy sentiments already building in nonfarm states (and even in urban areas of some farm states).
The WTO skirmishes will be important to watch, especially for producers of any commodities under attack. They won't spell the end of ag subsidies, which totaled $ 15.7 billion last year. But they're certainly another sign of the serious danger the long-standing largesse faces.
Scaling back subsidies would have obvious impacts - such as lower land prices - that would hurt rural economies. But as we've noted previously, current farm policies are not synonymous with good rural policy anyway.
That point was made again in a recently completed Iowa State University study. In collaboration with Iowa ag and business leaders and with funding from 2002 gubernatorial challenger Doug Gross, ISU economists examined economic viability in each of Iowa's 99 counties.
Largely agricultural counties, especially those heavily reliant on federal farm payments, fared poorly. Increased livestock receipts, nonfarm entrepreneurial activity and recreational areas contributed to growth. In other words, dependency on farm-program payments is a recipe for failure.
Writing good farm - and good rural - policy is, of course, a steep challenge. That the United States hasn't found such satisfactory policy was one of the frustrations cited by retiring University of Nebraska-Lincoln agricultural economist Roy Frederick as quoted in a recent World-Herald story.
"We continue to flounder to find the right safety net for our farmers," Frederick said, "and the politics of farm bills isn't getting easier."
It's not getting easier, but the pressures for change are getting harder to ignore.Omaha World Herald:
