US farm subsidies in no danger

Even in a year when U.S. farm­ers’ incomes are like­ly to be the sec­ond high­est in 35 years, Obama’s mod­est bud­get pro­pos­als to cut US farm sub­si­dies by about a quar­ter over the next decade is unlike­ly to win sup­port from the Repub­li­can major­i­ty in Con­gress

The Oba­ma administration’s pro­posed 2012 fed­er­al bud­get released today tar­gets sev­er­al waste­ful agri­cul­ture pro­grams, includ­ing cut­ting $4.25 bil­lion over 10 years from sub­si­dies to large farm oper­a­tions, wealthy landown­ers and the crop insur­ance pro­gram.” Extract from the Envi­ron­men­tal Work­ing Group blog

The lack of Repub­li­can inter­est in cut­ting the subsidies—totalling $16.35 bil­lion in 2009—is omi­nous giv­en that quite a few of the largest recip­i­ents of farm sub­si­dies are locat­ed in Demo­c­rat con­gres­sion­al dis­tricts. There is no guar­an­tee the the White House pro­pos­als will be viewed favourably by the President’s own par­ty.

The Oba­ma pro­pos­als set a pal­try tar­get for cuts spread over a decade. But even so, they’re larg­er than the near­ly-irrel­e­vant $2bn cut that the pro­posed Doha round deal would impose on U.S. sub­si­dies over a sim­i­lar peri­od of time.

The most recent out­line of a deal in the Doha round would set the Unites States’ start­ing point for pro­duc­tion sub­sidy cuts—based on com­mit­ments the U.S. made in the 1980s Uruguay Round— at a total pay­ment of $48.2bn. A Doha deal would impose an impres­sive-sound­ing cut of 70% on that num­ber, bring­ing the future ceil­ing for per­mit­ted U.S. farm sub­si­dies down ot $14.46bn or 88% of their 2009 spend. In oth­er words, the Doha deal makes no changes of any real con­se­quence for U.S. farm­ers.

Just in case you find that prospect depress­ing: the EU will prob­a­bly have to make no cuts at all in its farmer hand­outs as a result of the flawed Doha deal.

Note on data: The Envi­ron­men­tal Work­ing Group’s farm sub­sidy data­base is an invalu­able rework­ing of USDA data. A lot of shock val­ue in their tables. In 2009, for exam­ple, the top 1% of recip­i­ents of U.S. farm hand­outs took 20% of the mon­ey: more than $2bn. The top 20% took 80%.

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