Broadcast September 10, 2003
This week, trade officials from rich and poor nations are meeting in Cancun, Mexico. The toughest issue on the agenda is what to do about farmers.
Here's the problem. Poor nations don't have much industry but they do have farms. In fact, the corn, wheat, cotton, sugar, rice and dairy products they produce are just about the only things many poor nations have to trade, for what they need from the rest of the world. Poor nations can produce a lot of this cheaper than rich nations can. So you might think there's a natural fit.
Well, think again, because rich nations have farmers, too -- not many of them, mind you, they're politically powerful. Fewer than 3 percent of Americans work directly on farms, but agribusiness is big business in America. It's the same in Europe and in Japan.
As a result, rich countries are spending hundreds of billions a year subsidizing their farmers, which makes it almost impossible for poor countries to compete. Japan gives its rice farmers seven times what it cost them to produce it, which allows Japanese rice farmers to turn around and sell rice forvery little. This effectively shuts out cheap rice from Thailand and other developing nations. European farmers get $100 billion a year, which lets them underprice poor nations' production of wheat and dairy products.
One of biggest culprits is the United States. Last year the Bush Administrationannounced it would give American farmers an extra $175 billion over the next decade, over and above the $50 they get each year in agricultural subsidies. The White House said it was acting to defend our farmers against artifically cheap produce coming from Europe.
This is crazy. These subsidies end up costing all of us, twice over. We pay more for the food we eat. And we pay more taxes to make these farm payments. Meanwhile, poor nations get clobbered. How are they going to earn the money they need to develop their economies if they can't sell their farm produce?
The income gap between the rich and poor nations of the world continues to widen. It's now ten times wider than it was thirty years ago. Of the six billion inhabitants of the earth, almost half are struggling to survive on lessthan $2 a day.
We talk a good game about foreign aid, but it's mostly baloney. The yearly subsidy we give just to American cotton farmers is three times our total foreign aid to Africa.
Poor nations don't need foreign aid as much as they need a fair shot at our markets.
Which is why the talks starting today in Cancun are so important, but also why they seem doomed from the start. Farmers in rich countries won't give up without a fight. But poor countries have almost nothing to fight with. We should be ashamed.
