Morning Report 7/6/05
Under heavy pressure before the G-8 meeting in Scotland to start looking out for the welfare of people in places such as Africa and Brazil, the Bush regime has promised to try to shut off a big flow of corporate welfare to big business: the U.S. cotton-subsidy programs.
Is slavery finally ending? Maybe. And only under pressure from the slaves. As the BBC reports this morning:
- The US government will ask Congress to pass legislation to repeal subsidy programmes after the World Trade Organization ruled they were illegal.
The move came on the same day that Brazil threatened to raise tariffs on US imports in retaliation.
Poorer countries say US subsidies distort prices and harm competition.
That's a big if—U.S. conservatives talk a lot about "free markets" but they don't really believe in them. However, such a move would help end the continuing economic slavery of people in bountiful African countries who can't compete with Western businesses propped up by corporate welfare.
Don't celebrate yet. The U.S. is the world's largest cotton exporter, but EU countries aren't so hot on ending such subsidies, and Congress would have to hammer out a plan over fierce opposition from agribusiness back in the States.
The subsidies are ridiculous in scope, and despite the rhetoric from supporters that Lassie's family benefits, the U.S. taxpayer is actually the bitch. Big companies rake in the vast majority of the billions of dollars of corporate ag welfare.
At least we're not the slaves (well, most of us anyway). It's not enough that people in such places as the Central African Republic are beset by political strife. They also work hard as cotton farmers, but they can't sell their cotton because they're undercut by the subsidized U.S. crops.
The stories of farmers like Bruno Goma (see photo), recounted by the U.N.'s IRIN news service last year, are only part of the misery of African poverty. Oxfam, the British NGO, lays out the devastating story in its epic report Cultivating Poverty:
- Agricultural subsidies in the United States are at the heart of a deep crisis in world cotton markets. American cotton farmers are first among equals in the harvesting of subsidies, reaping windfall financial gains from government transfers. Rural communities in some of the world’s poorest countries suffer the consequences. While the US advocates free trade and open markets in developing countries, its subsidies are destroying markets for vulnerable farmers. No region is more seriously affected by unfair competition in world cotton markets than sub-Saharan Africa.
World cotton prices are half what they were a decade ago, says Oxfam, and more than 10 million people in Central Africa and West Africa depend directly on cotton production. More from Oxfam:
- Many millions more are indirectly affected. Cotton is also the major source of foreign exchange and government revenue for countries such as Burkina Faso, Mali, and Benin. According to the World Bank, the region is among the lowest-cost producers of cotton. Yet despite this comparative advantage, it is losing world markets, and its cotton farmers are suffering rising poverty.
The facts and figures of U.S. corporate welfare for cotton growers are staggering. Here are a few, courtesy of the Oxfam report:
The 25,000 cotton farmers in the U.S. reaped $3.9 billion in subsidies in 2001-02, double what they got in 1991-92.
The cotton subsidies are three times the entire USAID budget for Africa's half a billion people.
"Notwithstanding constant references to the 'family farm' on the part of US policy makers, farm subsidies are designed to reward and encourage large-scale, corporate production. The largest 10 per cent of cotton farms receive three quarters of total payments. In 2001, ten farms between them received subsidies equivalent to $17 million."
And who said Communism is dead? As Oxfam notes:
- In an economic arrangement bizarrely reminiscent of Soviet state planning principles, the value of subsidies provided by American taxpayers to the cotton barons of Texas and elsewhere in 2001 exceeded the market value of output by around 30 per cent. In other words, cotton was produced at a net cost to the United States.
The watchdog Environmental Working Group is unmatched at tallying this outrageous corporate welfare. The EWG's Farm Subsidy Database explains why plenty of American fat cats are still singing "Dixie"—one of Chief Justice William Rehnquist's favorite songs, by the way. The EWG says of "King Cotton":
- Once the "king" of Southern agriculture, cotton reigns today as king of subsidy-dependent American agribusiness. No U.S. farm subsidies have generated more attention and criticism than those going to the cotton industry. …
Cotton subsidy costs exploded again in 2003 to a near-record $2.67 billion (up from $2.38 billion in 2002). Only the 2001 cotton subsidies were more expensive for taxpayers, and with the 2003 payments the total cost of America's domestic cotton subsidies has exceeded $14 billion over nine years. And no U.S. subsidy program concentrates more taxpayer money into fewer agribusiness hands. Fully 80 percent of those funds went to just 10 percent of the cotton subsidy recipients—just 22,000 agribusiness operations, which received $512,005 on average over the nine years. The top 3 percent of recipients, only about 6,628 in all, collected almost half (49 percent) of total cotton subsidies, $6.9 billion in aggregate and more than $1 million apiece on average.
No wonder Southern politicians have long had a hammerlock on American politics. Before the Civil War, they reaped fortunes from King Cotton on the backs of slaves imported from Africa.
Southern pols now have powerful support—and money—from big agribusiness. You could say that thanks to the subsidies insisted upon by social conservatives who decry "welfare," big cotton growers in the U.S. still hold Africans in the grip of economic slavery.
So we'll see how quickly this unjust system of corporate welfare is dismantled. Ag welfare is still one of the bulwarks of the Southern pols who run D.C., and they're not going to cut off their pals without a dime.