Will Bush Win The Midwest Vote With Liberalized Farm Exports?
October 4, 2004
President Bush has now made his bid for America’s farm vote in November. The stakes couldn’t be much higher, with both the White House and the Senate potentially turning on farmer votes in close Midwest states.
Bush and his trade negotiator, Robert Zoellick, just led a coalition of Third World countries to a major victory over Europe’s farm export dumping and Asia’s farm import barriers. World Trade Organization members must now phase out their most trade-distorting subsidies by 20 percent. Europe will have to give up the massive export subsidies, which have depressed world market prices for farm commodities over the past 40 years. Asia will, in turn, have to permit more access for farm imports, including U.S. commodities.
The Bush team hopes that U.S. farmers can double their food and feed exports to land-short Asian nations in the coming decades-at higher prices-using the land, labor, and equipment they already have. Net incomes for American farmers should increase handsomely.
For the past sixty years, farm trade has been stifled by trade barriers while global nonfarm trade has soared more than 12-fold. Third World countries justified their refusal to import food and feed on the export dumping policies of European and American farmers. The subsidized exports, naturally, also make their billions of farmers livid.
The farm trade barriers have encouraged land-short emerging countries to clear wildlife habitat for low-yield crops instead of importing more of their rising food needs from land-rich countries like the United States and Argentina.
Bush hopes he’ll claim more farm votes with free trade, while demonstrating international negotiating skills to the whole country. U.S. taxpayers can expect some eventual relief from America’s own current hefty $12 to $20 billion per year in federal farm payments.
Bush also got in a satisfying whack at the French and Jacques Chirac. French farmers currently get the lion’s share of the European Union’s massive $40 billion per year in farm subsidies, and they had repeatedly blocked any EU moves toward a more international farm policy.
The ball is now in Kerry’s court. The Democratic Party has long favored buying the rural vote with government checks. They essentially drafted the costly 2002 farm bill, and have promised to defend it. That’s now a shaky proposition. There’s no longer a federal surplus as there seemed to be when the current farm bill was passed. Moreover, since 9/11, defense against terror has claimed a far bigger share of the federal budget.
Meanwhile, the WTO’s 1984 “peace clause” on farm subsidies expired last year, and both U.S. cotton and EU sugar subsidies have already been ruled illegal. If the U.S. has to pay off foreign farmers for the world-market impacts of its farm payments, the subsidy game will be over.
Will most farmers vote for export opportunities over a shaky dependence on government checks? Cotton and sugar producers-currently protected from foreign competition at consumers’ expense-won’t. However, corn, soybean, and dairy farmers very well might. Producers of meat, eggs, fruits, and vegetables will be pleased by the Bush agreement because they don’t currently get subsidies. The biggest farmer group, the American Farm Bureau, has applauded Bush’s agreement.
Kerry must now decide if the Democrats’ traditional subsidy pitch will garner him enough farm votes in key states. Or will he promise some other government benefit instead of applauding Bush’s newly-orchestrated export opportunity?
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