NCPA - National Center for Policy Analysis

Farm Bill Will Hurt Agricultural Trade

May 9, 2002

The $170 billion farm bill, with heavy subsidies for export crops such as soybeans and wheat, will actually hurt farmers by making it harder to knock down barriers to agricultural trade. Subsidies have a way of increasing production, lowering prices and requiring further subsidies later on. Around the world, virtually all our trade partners are viewing the bill with enormous skepticism, if not outright hostility, observers report.

  • The farm bill represents a U-turn in U.S. agriculture policy which threatens to put us in violation of the Uruguay Round of multinational trade talks.
  • It may also keep us from negotiating lower tariffs among countries belonging to the World Trade Organization and establishing a Free Trade Area of the Americas -- both major goals of the Bush administration.
  • American farmers depend upon trade -- with out of three acres they plant destined for export.
  • But the average tariff around the world for farm products is 62 percent -- compared to just 4 percent for other goods.

Thus, experts argue that farmers need freer global markets, not a further escalation of subsidies.

Source: Dean Kleckner (chairman of Truth About Trade and Technology), "Farmers Need Trade, Not Aid," Wall Street Journal, May 9, 2002.

For WSJ text

http://online.wsj.com/article/0,,SB1020910605655251960,00.html

 

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