I've got a way to reduce global poverty, decrease the number of workers crossing our borders illegally, save American taxpayers money, and cut your supermarket bills all in one swoop.
How? Get rid of U.S. farm subsidies and tariffs.
They were supposed to be a temporary remedy for small farmers during the Depression. But renewed every five years regardless of which party controls Congress, farm subsidies keep going and going. The latest version is now before the Senate. If enacted and signed into law, these farm subsidies will cost American taxpayers some $11 billion a year over the next five years.
I can see why the nation might want insure small, family farmers against risk. But these subsidies go mostly to big agribusinesses that hardly need them.
Fewer than 2 percent of Americans even work on a farm. Yet about half the population of the developing world depends on farming for their livelihoods. But they can't earn what the global market would otherwise pay them, because America's subsidized farm exports keep prices artificially low.
American cotton growers, for example, export cotton for just over half what it costs them to produce it. Which means more than 10 million African cotton farmers are stymied.
If we stopped subsidizing our cotton businesses, world cotton prices would rise, increasing the incomes of African cotton farmers by some $300 million a year.
Meanwhile, the average American tariff on agricultural imports is 18 percent -- much higher than the 5 percent average tariff on other imports. So not only do the world's poor suffer, but Americans get hit with a double-whammy. We're subsidizing U.S. agribusinesses with our tax dollars, while paying much more for our food than we'd pay if we didn't also protect agribusinesses.
And, not surprisingly, many of the world's poor who can't earn enough by farming are desperate to immigrate -- legally or illegally -- to richer countries like America.
Message to the U.S. Senate, now considering the latest farm bill: You want to fight global poverty, illegal immigration, and budget deficits, while giving American consumers a lift? Well, there isn't a simpler first step than to end farm subsidies and tariffs.
This column is adapted from Reich's weekly commentary on American Public Radio' Marketplace.
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