Oxfam Welcomes Johanns Statement on Subsidy Reform; Immediate Congressional Action Needed to Reform Misguided Farm Policy

International organization Oxfam America today welcomed Agriculture Secretary Mike Johanns encouraging statements on reforming the agriculture policy that not only fails to help America's family farms but also threatens the livelihood of developing country farmers. Oxfam warned however that it was up to the U.S. Congress to follow the administration's lead in both the budget reconciliation process and in drafting a new farm bill.
While speaking at the Commodity Club Luncheon in Washington, Secretary Johanns advocated for the U.S. to show bold leadership on agriculture within the ongoing international trade negotiations and for the creation of a bold new farm policy that supports America's farmers without trade-distorting subsidies.
"Secretary Johanns is right in that current programs aren't working, are too costly and hurt us in international negotiations," said Gawain Kripke, senior policy advisor with Oxfam America. "We look forward to working with the Administration to create a new farm bill that will provide a better safety net for American farmers without hurting farmers in poor countries."
More than 2.5 billion people in the world rely on agriculture for their livelihood. Globally, poverty is concentrated in rural areas. The U.S., the EU, and other rich countries provide enormous support to their agricultural sectors - more than $250 billion annually. The majority of U.S. subsidies (78 percent) go to the largest 8 percent producers and loopholes in the rules allow mega-farms to collect payments in excess of a million dollars while smaller farmers in the U.S. and abroad are driven out of farming by low commodity prices and high land costs.
"Our current farm policy violates the WTO rules that we have committed ourselves to long ago so keeping it propped up will only mean more lawsuits,' said Gawain Kripke, senior trade policy advisor for Oxfam America. "I am glad the Bush administration realizes this and is trying to encourage Congress to change our ways in order to protect our producers."
In March of this year, a WTO dispute panel found that subsidies and export credits paid by the U.S. in cotton and other commodities were illegal under WTO rules in a case brought by Brazil and supported by some West African cotton-producing countries. Although the Administration has made some initial moves to comply, the pressure is squarely on Congress to pass the necessary laws to implement the ruling. Since this has not happened, the Brazilians are now threatening retaliation by ignoring intellectual property protections.
"Failing to reform subsidies would mean that farmers in developing countries will continue to be hurt by the dumping of our commodities, that we will continue to be sued at the WTO for providing trade-distorting subsidies and that the Doha negotiations will continue to be stalled," continued Kripke. "While Secretary Johanns remarks signal the Administration's commitment to reforming these programs, recent moves in Congress have disappointingly sought to effectively tie the hands of the U.S. trade negotiators and severely jeopardizing international negotiations that could help American and developing country farmers alike."
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