Looking for a Solution
Marc Curtis' office on the farm looks like a former tool shed. The inside walls are covered with plywood, with some cartoons and price charts tacked onto the walls. Outside, the humid semi-tropical heat of the Delta seems worlds away from China or the Middle East, but Curtis is the outgoing president of the American Soybean Association so he has a sophisticated grasp of the global battle for markets and profits.
"We've got some competitors ... who have seen the light," he says, "… and made up their minds that they want to replace us as the leading agricultural producer in the world."
||Marc Curtis' office on the farm . Click to enlarge.
Photo: Stephanie Curtis
Brazilian farmers are especially competitive. "They're very aggressive and entrepreneurial, and lots of land," says Curtis.
Agriculture played a big role during the last round of global trade talks held by the World Trade Organization. Tariffs on manufactured goods have plunged over the past half-century, while farm tariffs are still relatively steep. Big farmers like Curtis are export oriented and tend to favor freer trade. He thinks the trend is toward more open borders for farm and ranch products.
"When you start talking about limiting imports to make your small farms work right, in the world economy we function in todayall industry in the worldif we want to maintain our export markets for other industriescars, airplanes, computer software," Marc says, "then these folks are going to want access to our products here ... If we start shutting off those markets, then no longer are we going to be able to send our products to them."
What's the answer? "Going to have to stay efficient," he says.
Congress passed the 'freedom to farm" bill in 1996. It was supposed to wean farmers away from government support. Instead, it's evolved into one of the most expensive farm programs ever. From the start, almost nobody was really happy with the law; critics nicknamed it 'freedom to fail.' Congress is about to expand subsidies to the industry. But lately, more and more peopleincluding family farmersare asking What would happen if the subsidies went away?
In the twilight of his presidency, Bill Clinton called upon the world's wealthiest nations to let the world's poorest countries freely compete for markets in industries where they have a natural advantagesuch as agriculture.
"If the wealthiest countries ended our agricultural subsidies," he said in a speech to the students of The University of Warwick on his last tour of duty as president, "leveling the playing field for the world's farmers, that alone would increase the income of developing countries by $20 billion a year."
What would happen if subsidies for farmers were eliminated?
The stakes are even higher after September 11th. Afghanistan and many of its immediate neighbors, much of Africa and countries once part of the Soviet Union, are trapped in grinding poverty and plagued with rampant disease and malnutrition. Such countries are breeding grounds for terrorism and civil war, as well as the tragedy of child warriors. Economic development will not only improve living standards, but it will lessen for future generations the lure of suicide missions, car bombings, and other nihilistic acts of terror. There is no magic elixir for transforming poor countries into rich ones, but most economists argue that opening America's agricultural borders would boost profits and income of developing nation farmers.
"If we go the route to combat terrorism through not just the stick of defense spending," says Maya McGuineas of the New America Foundation, "but the carrot of economic development, we're going to see more competition in the agricultural area. At the same time, that's going to lead to more protectionism of our farmers. We have been very hesitant to allow our farmers to compete on a level playing field. Global trade, free trade, and interaction with developing countries could strongly benefit those other countries if we allowed farmers to compete on a level playing field."
But what would happen here if subsidies were eliminated? First, everyone agrees the American agriculture industry would dramatically shrink, and the U.S. would import a lot more food. But Karl Stauber of the Northwest Area Foundation says the remaining farmers would be more competitive.
"Fundamentally, given our soil, our rainfall, given our transportation system, and given our research system, regardless of what happens we're still going to be one of the most effective producers of a wide array of crops and fiber sources and animals in the world," he said.