Art Cullen

Fallacy of 'Free Trade'

God bless John Major for putting under the light the world scourge of poverty. During a recent address at Buena Vista University in Storm Lake, Iowa, the former British prime minister explained that the only way to achieve peace is through justice -- people aren't as apt to kill you on a full belly.

Major went on to make that tenuous link du jour: The US and Europe, primarily, are starving the poor of Africa and Latin America by subsidizing agriculture. The logic goes that subsidized overproduction does not give the African cotton grower or the Chiapas peasant corn grower a fair shot at the world market. Overproduction of American cotton and corn is fed by government subsidies, the free-traders declare.

This is the view of the World Trade Organization, which already has declared certain cotton subsidies illegal. We believe that the WTO will attack direct feed-grain subsidies next.

The logic tends to escape us. First, we have a hard time imagining Somalia or Ethiopia turning into a burgeoning post for the world cotton trade, and we have an even harder time imagining their people eating cotton. We do not believe that the Chiapas peasant farmer will ever be able to grow corn in sufficient quality or quantity to sell in the world market. Third World nations cannot feed themselves now. How would they feed themselves if we bankrupted American and European farmers?

If we eliminate subsidies, corn will still fetch $1.50 per bushel. It will not be attractive to the farmer in Iowa or Mexico to grow, but it might be for the Chinese. Are we comfortable with the world market providing for the food needs of the US? Do we want to depend on Brazil for our next meal?

The main beneficiary of cheap corn is the corn trade. If there were no subsidies, the farmer in Africa would continue to starve and the American farmer would not be far behind. But the boys on the Chicago Board of Trade would never miss a meal, because they will find a position.

We subsidize agriculture because we can afford to and because we must against the vagaries of weather and world markets. We do not understand why corrupt regimes elsewhere in the world squander their wealth on palaces rather than on peasant farmer development. We invested our money on making Iowa the most productive agricultural region in the world. It is in our national security interest to sustain that development and maintain a diverse network of farmers and farm suppliers.

Now, you might argue over the means of subsidy, and this is what Major may have been talking about. Export subsidies are bad, the WTO says, while conservation payments are good. However, the Bush administration has not been too keen on conservation payments while the Brazilians working on slave wages rip up the rain forest to grow crops that directly compete with us.

The real aim of eliminating subsidies is to put American farmers squarely under the thumb of corporate integrators. Even with subsidies, it remains difficult for American farmers to stay afloat.

Cap payments to larger producers. Put more emphasis on conservation over subsidizing production. Invest in value-added enterprises over bulk commodities. But don't endanger the one system in the world that works by eliminating subsidies on foodstuffs that keep our nation secure. The hurricanes illustrated how fragile our domestic energy supply is. Heaven help us if our food supply is ever so threatened.

The scourge of worldwide poverty must be addressed in meaningful ways. Resentments feed on hunger. The US is providing about half the foreign aid it is supposed to offer, and we can do better. But we will do worse if we swallow the poisonous half-truth that "free trade" lifts all boats. The North American Free Trade Agreement may have helped Coca Cola, but it has brought no benefit to either the American or the Mexican farmer. The way to aiding the African farmer is with capital, applied science and clean government, all of which are in short supply.

This editorial originally appeared in The Storm Lake (Iowa) Times.

From The Progressive Populist, Nov. 1, 2005

Home Page

Copyright © 2005 The Progressive Populist