So, what's with the farm subsidies already?

[Silver Cheetah]

Little head has been sent spinning on shoulders by all the trade protectionism that's coming out of the US lately.

What happened? First the steel debacle, and now the farm subsidies. Whatever next? For a country that's ostensibly committed to knocking down the barriers to free trade across the free (and not so free) world, these actions are sending some pretty confused messages to the rest of us.

Okay, there's domestic politics and re-election to be thinking about, but doesn't that apply to all democratic members of the WTO?

Seems to be very much a case of 'do as we say but not as we do'.

What do people think?

[/)eathKiller]

I think its odd but Farmers do need that sort of protection these days, they're not living the best lives in the worlds you know, their entire life is based on the weather, the elements, and how well their crops grow and are bought...

+ too much trade CAN be a bad thing, it leads to the US becoming too oriented on exporting and not caring for itself... Bush is a very home-based person, and he wants to make sure that HIS nation is the one getting the majority of the trade... I still find it bizare that we keep the embargo up though with Cuba... LOL... what's Kastro gonna do? Give us some good Cigars? I mean COME ON! [img]tongue.gif[/img]

[skywalker]

The problem with the subsidies, is that the Corporate Farms are usually the ones who benefit the most, not the poor family farmer.

Mark

[Silver Cheetah]

Originally posted by skywalker: The problem with the subsidies, is that the Corporate Farms are usually the ones who benefit the most, not the poor family farmer. Mark

I was raising the point in a wider context of global trade liberalisation. (I am not necessarily a fan of such, by the way....)

The EU massively subsidises its farmers, far more than the US. The US has been getting progressively more shirty about this, with good reason, arguing that it distorts trading world wide.

The EU has been gradually, though reluctantly, taking this view on board, and is now looking at doing away with the CAP (common agricultural policy) which is at the heart of fat subsidies.

However, America has suddenly reversed its position right in the middle of shaking its finger sternly at Europe, with the 2002 farm bill, which will raise the level of federal subsidies by over 80%. And yes, Sky, 3/4 of the cash will go to the biggest 10% of farmers.

Europe will take this as an excuse to keep their own subsidies.

The poorer countries, many of whom are becoming progressively more suspicious of trade liberalisation, are liable to seriously baulk at the current orgy of protectionism, (which will escalate as Europe responds to the US steel tariffs/farm bill. )

They are going to be looking at the US in a very squinty eyed fashion, as the US calls to them to drop barriers to international trade (ie. give the US and Europe opportunities to take a bigger share of their markets.)

It's all about competing on a level playing field, according to the globalisation gurus. But in no way can the latest US actions be interpreted as a move towards the free trade ideal of minimal barriers worldwide and a level playing field.

Oh well, maybe the US, so far the biggest exponent, together with Europe, of free trade ideologies, is going to end up being the country that brings the whole notion into disrepute.

It's an ill wind...... [img]smile.gif[/img]

Basically, the point I'm making is that it is bizarre that the country that has most driven the free trade agenda is now turning turtle and making moves in the opposite direction. Oh for some consistency!

[ 05-13-2002, 05:12 AM: Message edited by: Silver Cheetah ]

[skywalker]

Originally posted by Silver Cheetah: Basically, the point I'm making is that it is bizarre that the country that has most driven the free trade agenda is now turning turtle and making moves in the opposite direction. Oh for some consistency![/QB]

Don't be surprised by anything that happens in the USA at this time and in another two years. It's all about the vote, baby! We will have midterm elections this November. Any legislation, where ever it orginates, is mostly a way to get votes for the Parties. In this mode of operation, the politicians could care less about how policy affects the nations of the world.

BTW Cheetah, my earlier post was more in response to /)eathKiller...I don't believe the subsidies will help the little guy.

Mark

SKYDude is right SC, with elections every couple of years of one sort or another, never be surprised at "about faces"....it is all about
staying in office...for both the major parties.

As for the subsidies themselves, they are nothing new, have been around since .... well almost since the country started, hell peanut farmers are still getting money when the original need for the subsidy is long since vanished.....we seem to make new laws by the bushel but never has a federal program been successfully terminated
or at least so it seems

Sky [img]smile.gif[/img] I have to disagree with you about the subsidies not helping the little guy... I was raised on a small farm in PA (roughly 130 acres) for part of my teen years, the farming subsidies helped us get equipment and seed, they helpped us make the part time farm profitable enough that we eventually could afford to buy some horses. Yes the Biger farms get more of the benefits but that is the way of the world. WE did not NEED multi-million dollar loans and grants. Did the subsidies mean we were set for life?? no..but that isn't what they were for.

[ 05-13-2002, 10:28 AM: Message edited by: MagiK ]

[quote]Originally posted by Silver Cheetah:

Originally posted by skywalker: [qb]Basically, the point I'm making is that it is bizarre that the country that has most driven the free trade agenda is now turning turtle and making moves in the opposite direction. Oh for some consistency!

Heh, you think it is confusing looking in from the outside [img]smile.gif[/img] you should try living in the assylum some time [img]smile.gif[/img]

Actually it is kind of crazy but I still have yet to visit anywhere that I would rather live....EDIT...I mean live full time..I could use a six month stretch living on the beach in the Bahama's or possibly the Carribean [img]smile.gif[/img]

[ 05-13-2002, 10:31 AM: Message edited by: MagiK ]

[Charean]

Just remember that in the US, very few of us agree with what our elected officials are doing... but the majority of the population doesn't care or doesn't understand.

But then again, you can't please all of the people all of the time.

Help me Lord, get through the elections.

Originally posted by Charean: But then again, you can't please all of the people all of the time.

I demonstrate this principle almost every time I make a thread

[Silver Cheetah]

Just want to check my understanding of globalisation.... and put a theory...

Globalisation works thus, I believe... in theory, we are working towards removing all or most artificial barriers to trade, including subsidies, tarifs on imports etc. Products/commodities will thus compete on price and merit, across the globe. (Hence the term 'level playing field. What we currently have certainly isn't a level playing field.)

Result: companies offering the cheapest, best products will move their product easily and do well. Consumers generally will benefit from this.

Companies offering more expensive products that aren't particularly competitive will not be able to compete, and on a level playing field with no help from government, will go under. (Thus products will always be available to the consumer at the lowest possible price.)

Costs in the West are generally higher than in the rest of the world, so in order for goods to compete/manufacturers and producers to be safe, we currently have a system of tarifs on cheap imports, to make them less competitive with our own goods, and we have subsidies for our farmers, so that they can afford to produce food cheaply and competitively.

As we move further towards globalisation, tariffs/subsidies will be lowered, and eventually, removed altogether. This is the vision of the free marketeers (which the leadership of the developed world subscribes to enthusiastically, at least in theory.)

Now, how come everyone is so enthusiastic about the idea of the free market, til it actually comes down to cutting the subsidies/letting in foreign goods at lower/non existent tariffs?

At this point, everyone goes nuts, especially if their particular interests are under threat. And understandably so. Jobs are put at risk, in fact, whole industries will be/are being put at risk.

If globalisation gets where it's heading for, eventually each geographical area of the world will be confined to making/growing products/commodities that it is cost effective for them to make, given the resources they have access to, and the price of labour. To a great degree, this is happening already, and is a key reason behind many multinationals location of their production facilities in the third world (bye bye local jobs.)

Eventually, Western countries will become primarily service industries oriented (taking the argument to its logical extreme conclusion) because commodities such as wheat, maize, beef etc, will be just too expensive to 'grow' in the West, once subsidies have been removed.

But do we want this? Doesn't it seem just a tad risky? The interdependencies are potentially shocking. Personally, I'd rather live in a country that is at least partially self-sufficient when it comes to necessities like food. Luxuries don't matter as much. This is an uncertain world, as we've been made to realise particularly during the past year or so, and anything can happen. There's also the fact that lots of interdendencies means that when one goes down, the whole lot can go down.

I think the free trade gurus are barking mad, personally. Nothing wrong with trade between countries, in fact, it's wonderful. But I also see nothing wrong with countries protecting their own industries, including farming. And that goes right across the board for the developing world also.

?? Yes, no?

If you keep the subsidies and the tarifs, then it can be whatever you want, but it's not 'free trade'.

So, are you for free trade? Or against it? Or somewhere in the middle?

What do people think?

[ 05-13-2002, 02:47 PM: Message edited by: Silver Cheetah ]