I’m Steve Ember with the VOA Special English Agriculture Report.
Aid to farmers has become a major issue in world trade talks.
Industrial nations provide farmers with payments to improve farm earnings.
But, developing nations say aid to farmers in rich nations suppresses
world agricultural prices.
The issue of agricultural subsidies has nearly halted the Doha Round of
World Trade Organization talks. The Doha Round is the latest in a series
of negotiations by WTO members to improve international trade. Farm
subsidies were a major reason that talks in Cancun, Mexico, failed in
2003. And, no major agreements were reached in Hong Kong in December of
last year.
Today’s system of farm subsidies in America began in the 1930s
during The Great Depression. Prices in the nation dropped. At that time,
twenty-five percent of the nation’s population lived on farms. And farmers
were among those hurt most by dropping prices.
In 1930, Congress and President Herbert Hoover tried to protect
American markets by taxing foreign imports. Crops were also protected. But
this caused other nations to create trade barriers. This closed markets to
American goods, making the world economic situation worse.
Three years later, Congress and President Franklin Roosevelt enacted
the Agricultural Adjustment Act. That law and several that followed put in
place most forms of farm subsidies that continue today. These include
paying farmers not to plant crops. They also include guaranteed prices for
some crops, surplus buying programs and loans.
Not all crops can receive subsidies. But, the Department of Agriculture
is required by law to provide subsidies for wheat, corn and other grains
used to feed animals. The USDA must also subsidize seeds used to make oil,
milk, peanuts, sugar, honey, wool, tobacco and other products.
Farm subsidies are estimated to cost between 17 and
20 thousand million dollars through next year.
Critics of the system say it does not provide a market solution to
agricultural prices. They say a small number of the largest farms receive
most of the subsidies.
But supporters say subsidies are necessary because crop prices have
dropped for at least 50 years. They note that competitors in the
European Union have been unwilling to lower their large farm subsidies.
This VOA Special English Agriculture Report was written by Mario
Ritter. I'm Steve Ember. |