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Issues Related to the Effects of Agricultural Policy on Nutrition and the Environment rough mean total US expenditures 1995-2002: $1.75 trillion

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Source: Environmental Working Group Farm Database Version 2.0 http://www.ewg.org/

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2003 data. Source: National Corn Growers Association, http://www.iowafarmer.com/corncam/corn.html 54% animal feed 15% export 8% sweeteners

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Let’s look at corn more closely. In 2002: acres planted: 7.9 x 107 acres harvested: 6.9 x 107 produced: 9 x 109 bushels ($21.2 billion) leading states: Iowa: 1.96 million bushels Illinois: 1.5 million bushels Minnesota: 1 million bushels Source: National Corn Growers Association, http://www.iowafarmer.com/corncam/corn.html

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Source: Environmental Working Group Farm Database Version 2.0 http://www.ewg.org/ subsidy received ‘95-’02: top 1%: $25 billion bottom 80%: $15 billion corn subsidy concentration

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Those Illegal Farm Subsidies - New York Times, Apr. 28, 2004 America's lavish handouts to its farmers harvest poverty throughout the developing world. And they are illegal as well. That's the conclusion of a WTO panel that heard Brazil's challenge to the cotton subsidies that belie this nation's commitment to free and fair trade. Cotton is far from the only crop that American farmers are able to dump on the international market at low prices thanks to federal subsidies. But it is one of the most outrageous cases. Brazil was wise in choosing it as the first target in the developing world's challenge of the roughly $billion a day in subsidies that rich nations dole out to their farmers. If the preliminary ruling stands,as expected, it may mean the beginning of the end for European and American practices that provide their farmers an unfair advantage. In addition to Brazil, an agricultural superpower, some of the world's poorest nations, [ ... ] are vindicated by the WTO's decision. ...

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By underwriting much of the costs of America's 25,000 cotton farmers with checks that can total $3 billion a year [average of $1.25 million a farm, GE], Washington erases that advantage. Aided by American experts who are critics of this warped system, Brazil convincingly argued that in the absence of subsidies, the US would have produced and exported substantially less cotton than it did in recent years. Consequently, growers elsewhere would have enjoyed greater market share and higher prices. The glaring contradiction between American farm subsidies and the principles underlying the global trade system has long posed a moral and political problem for Washington. Now it is also a legal problem. Instead of digging in its heels and spending years appealing the panel's ruling, the Bush administration needs to seize upon it as a reason to negotiate the surrender of rich nations' trade- -distorting farm subsidies. The administration has a mixed record on this issue. It offered proposals to start weaning corporate farmers off

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their subsidies two years ago — admittedly after approving a farm bill that exacerbated the problem. Then it backed away in the face of strong opposition from Congress and the EU. That retreat not only hurt the poor nations' farmers, but also American taxpayers, consumers and most business interests, including more competitive farmers. The WTO's talks on the further liberalization of trade faltered over the subsidy issue at Cancún last year, but this week's ruling will vastly strengthen the position of Brazil and others advocating the dismantling of agricultural subsidies that distort trade. The sooner they prevail, the better.

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Without big cuts in farm subsidies, the Doha round of trade talks will drift into insignificance, The Economist, 4/17/2004, Vol. 371 Issue 8371, p11 LAST September in Cancún, poor countries left the bargaining table at the WTO talks ... they had a point. After all, the EU, America and Japan have erected massive trade barriers that impoverish farmers in poor countries. Europe spends billions of euros every year through its common agricultural policy (CAP) to subsidise its own farmers. America's farm bill means that taxpayers pay Americans to produce things such as cotton that could be grown far more cheaply in Africa. Rich-country farm subsidies and tariffs are outrageous by any rational measure. However, in the months since the Cancún meeting, America and the EU have put far too little effort into making concessions, and they are now trying to bypass the Doha round of talks with bilateral trade deals, which threatens to undermine the entire multilateral trading system.

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This would be a tragedy for the poor. Rich-country farm subsidies prevent the poorest countries from selling some of the only goods, other than illegal drugs, that they are able to export, keeping millions of people miserable. Consumers in rich countries pay over the odds for food. And for what? So that a tiny number of farmers and a few large agricultural firms in rich countries can continue to benefit at the expense of the world's poor.

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page 17

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EU world

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