Kind: Let U.S. Farmers Compete in the Marketplace

Kind: Let U.S. Farmers Compete in the Marketplace

A Wisconsin congressman says the time is ripe to reform the massive farm bill to make U.S. farmers more independent and competitive

November 7, 2007 4:11 pm (EST)

To help readers better understand the nuances of foreign policy, CFR staff writers and Consulting Editor Bernard Gwertzman conduct in-depth interviews with a wide range of international experts, as well as newsmakers.

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The U.S. Senate has begun debate on the five-year renewal of the farm bill, a nearly $290 billion program of direct crop subsidies, food stamps, and other programs. Critics say the programs are outmoded and obstruct everything from Americans’ food choices to global trade.  One of the chief opponents of a similar measure that passed in the House, Rep. Ron Kind (D-WI), says sweeping reforms are needed that will retain a safety net for farmers while eliminating subsidies that distort domestic and global markets. "I’m confident if we unleashed the shackles on [U.S. farmers] that these programs bring," Kind says, "they’re going to be very creative, and innovative in figuring out a way to compete successfully."

Why does a Wisconsin farm representative oppose [the farm bill]? Why have you fought to change the status quo that has been so helpful to a district like yours?

Because the status quo doesn’t make sense. We’re talking about programs that date back to the Great Depression and the Dust Bowl-era. It has no reflection on modern economics from market prices today to what farmers need to do to modernize so that they are more competitive here at home but also internationally. If you can’t advocate reform today, when you’re looking at grain prices at or near record prices in the marketplace, you’re never to get reform in this place. I think that there is a smarter and more fiscally responsible way to help family farmers during tough times, but also to reinvest in them and rural America through other important programs like conservation program functioning, rural development, specialty crops, nutrition programs, but without distorting the market that we have with these direct subsides that are going to a few but very large commodity producers at the expense of everyone else.

Your proposal is somewhat similar to what you had five years ago and yet you received less support this year with a Democratic majority Congress. Why the lack of support?

I think multiple reasons. One is just the inherent complexity of these farm programs, and I think that they are purposely very complex in order to confuse people so that they don’t take the time and energy to actually study the effects of these programs, who’s receiving what and how it distorts the marketplace here at home and globally. Secondly, you’ve got the inherent status quo on these committees. When 70 percent of the agriculture subsidies are going to just thirty congressional districts, and they’re well represented on the committee, it’s just unrealistic to expect those committees to be agents of change and reform and new ideas.

But also the politics intruded this time around, with the Speaker [of the House Nancy Pelosi] ultimately endorsing the [agriculture] committee work for fear of some new members in rural districts and their vulnerability, and that hurt efforts. But, finally, and unfortunately, the House bill called for tax increases in order to buy off various groups that wanted to see more farm reform. I think it was unnecessary. We could have gone to the commodity title for savings that could be reallocated without having to raise taxes, and I also think it’s a moot issue because the president is never going to sign a farm bill that calls for tax increases at a time of record commodity prices.

So the president has threatened a veto through his agriculture secretary. Do you see that potentially opening up the farm bill again?

At some point, reality has to set in with Congress and with the leadership of Congress. If they want to see a farm bill concluded and signed by the president, they have to get more realistic on the reforms that I and others have been advocating, including the president and his administration. I think they’re common step measures based on one simple sentence: "Let’s give help to family farmers, when they need it, let’s not when they don’t." It’s tough to justify another $26 billion in direct subsidy payments going to grain producers when we are receiving great prices in the market. Now, my congressional district ranks 34th in the nation for agriculture subsidies and I haven’t received one negative word from any farmer in my district about the reform that I have been advocating. They are the ones that are always telling me in the past, "Ron, if we just get a decent price in the marketplace, we wouldn’t have to rely on these government subsidy programs." Well, that ship has come in, and we’ll see how real that sentiment is.

I also believe there is a huge disconnect between what producers see and want back home. They want independence. They want more flexibility in the operation versus what the high-powered lobbyists are saying here in Washington. You’re up against very powerful entrenched special interests. They have a lot of money. They know how to play the political system in order to convince people that the status quo is the only way to proceed. I disagree. I think there are many senators who disagree—including Dick Lugar [R-IN], and even Senator [Tom] Harkin, [D-IA] the chair of the committee on the Senate side­—[and] would like to see more reform. And I certainty think the American people believe that there is more room for reform.

Now lurking behind this is the issue of the Doha Round, which is actually directly affected by the U.S. and the big European farm sector. Why aren’t their more champions of trade as part of this debate?

In the past they have been quiet. This time you saw for the very first time, some active engagement from a lot who are interested in the global trading system, the Doha Round in particular. They sent a letter during the course of the farm bill debate on the House side, advocating for these reform measures. There wasn’t much lobbying muscle behind the effort at the end of the day but it has huge implications in regards to where we go with not only our bilateral but multilateral trading system. And if we are hopeful that the developing world will be able to figure out their own economic system so that kids aren’t growing up in abject poverty, we also need to take a look at our agriculture subsidies both here and what the European Union has been able to establish through the years. It’s the only hope we have for our major breakthrough with Doha, and it’s supposed to be the development round, and one of the major stumbling blocs today are these agriculture subsidies that both the U.S. and the EU continue to embrace.

In the event that subsidies were cut heavily to, say, cotton and sugar, maybe U.S. sectors can’t compete internationally. Is there some kind of trade-adjustment assistance that needs to come into play here? How do you deal with the areas that then get buffeted?

First of all it is not clear economically that if you just reduce subsidies in these areas that it will spell the doom of these producers. Other countries have gone through the same painstaking change with their farm policies and they are thriving today. You look at New Zealand and Australia, for instance, you can’t find a farmer in those countries that would want to go back to the government-subsidized support system that they’ve just come from, because they have learned how to compete both at home and abroad. I’m afraid that our producers are going to have to figure out that too, modernizing their operation. I’m confident if we unleashed the shackles on them that these programs bring, they’re going to be very creative, and innovative in figuring out a way to compete successfully. Also, we are not advocating complete elimination of the safety net. We’re talking about a safety net that kicks in only when prices plummet, when there is need for it, rather than one that just continues blind of market reality. So there is a big difference between cold turkey to what we’ve been advocating in our reform effort.

There seems to be this chill in the air involving trade. There is going to be a Peru vote that might pass. Might be the only one. There are a lot of negative vibes about globalization in general and this farm bill comes along at a time when people want a little bit of a continuation of the "same old thing." Do you see this getting caught up in this kind of grim mood about trade in this country?

Well, I hope not. I think we have a new template for trade, with the core international labor standards, environmental standards, trying to level the playing field, trying to make trade more receptive to more people, and we need to figure out a way to bring back a bipartisan consensus on trade because trade is more than goods and products crossing borders. It’s a tool in our diplomatic arsenal, but I also believe that when goods and products do cross borders, armies don’t. But, the workers here at home need to feel that they are getting a fair shake, and that they are allowed to compete on an even basis globally. That’s what this new template’s about that we are going to see with Peru this week, and some of the other bilaterals coming up that hopefully will bring this country back together again, where we’ve always been. We’ve been a leader when it comes to trade in establishing a rules-based global trading system. We need to get back to that.

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