EQUAL TIME: SUBSIDIES KEEP
U.S. FARMERS AFLOAT
Publication: Atlanta Journal-Constitution
Printed: Wednesday, September 10, 2003
Written By: Bob Stallman
Bob Stallman, a rice and cattle producer from Texas, is president of the American Farm Bureau Federation.
The effort to demonize U.S. farm program payments rings hollow to those of us in American agriculture who view the economic safety net they provide as a make-or-break proposition. There are many good reasons why all Americans should share our opinion.
Yes, over the last 10 years, farm program payments, on average, have accounted for roughly 30 percent of net farm income. Unfortunately, government payments are needed. In farming, the rising costs of seed, fuel and fertilizer and the added costs of any new regulations cannot simply be passed to consumers. Those costs often take a bite directly out of the farm family's quality of life.
Farmers are certainly not growing rich on government payments. Including government payments, the average return on assets seldom exceeds 4 percent. Return on equity invested typically averages 6 percent to 7 percent --- levels that don't attract a rush of investors. People are not waiting in line to take up farming.
Instead, U.S. farm program payments are helping today's farmers survive and compete in a constricted world marketplace that remains awash in international gamesmanship, trade barriers and gargantuan subsidies expended by the likes of the European Union and Japan.
According to the respected Organization for Economic Cooperation and Development, in 2001, Japan subsidized its farmers to the obscene tune of $3,960 an acre. The EU was second at $320 an acre. The United States lagged far behind at $49 an acre.
America's farmers face other challenges in the world market. While the average tariff on agricultural products coming into the United States is only 12 percent, farmers in India have a 114 percent tariff cushion between the products they sell and actual world prices. The average tariff rate for agricultural products around the world remains 62 percent.
Talks this week in Cancun, Mexico, remain our best hope to correct this market manipulation by our competitors. America's farmers are willing to put the topic of reforming domestic supports on the bargaining table, but we will not unilaterally disarm. We must have rock-solid guarantees that we will gain access to markets currently hiding behind artificial tariffs, or markets where commodities are dumped at steep and subsidized losses.
If we achieve that success, all Americans will win. Until then, however, farm program payments must continue to sustain America's farmers.
Yes, over the last 10 years, farm program payments, on average, have accounted for roughly 30 percent of net farm income.
Gee, only 30% of farm income?
According to the respected Organization for Economic Cooperation and Development, in 2001, Japan subsidized its farmers to the obscene tune of $3,960 an acre. The EU was second at $320 an acre. The United States lagged far behind at $49 an acre.
Lets see now that's about $32,000 on every section. Yeah that's hardly anything.