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U.S. President Barack Obama takes to a
stage backed with harvesters and hay on
Friday as he travelled to Michigan to
sign the nearly $1 trillion farm bill
into law. The law cuts direct farm
subsidies but replaces them with more
generous government-paid crop
insurance. (Reuters)
i
New U.S. farm bill coddles farmers,
ignores Canada's plea
When it comes to its farmers, the U.S.
is a veritable nanny state
ANALYSISFeb 11, 2014 9:11 AM ET
Neil Macdonald, CBC News
Among the many myths Americans entertain
about themselves is the belief they're
self-made; that any success they might
enjoy is in spite, rather than with the
help, of government.
As Ronald Reagan once said, to a great
chorus of cheers, "government isn't the
solution to our problem, government IS
the problem."
Nowhere is that notion more fiercely
beloved than in the vast spaces between
this nation's cities; in gun-toting,
Republican-voting, tall-standing, rural
America.
It's a delusion, of course. U.S. farmers
are practically wards of the American
nanny state.
But it's a delusion the legislators who
represent rural America — both
Republican and Democrat — are willing to
pay to maintain.
Big time, in fact: propping up delusions
wins elections.
Take the outrageous story of
Washington's hush money to Brazil. It's
not one that's widely known in the U.S.,
probably because it cuts against
Reagan's government-is-the-problem
narrative.
But it beautifully illustrates the
lengths to which Congress will go to
coddle and protect certain American
businesses, even as Washington accuses
other countries, like China or even
Canada, of unfair trading when they do
the same thing.
Brazil's hush money
The Brazil story goes back to 2002 when
the government of Brazil lodged a
complaint against the U.S. government
for unfairly subsidizing American cotton
farmers.
The Brazilians had an excellent case;
Washington has for decades been paying
farmers cash whether they grow crops or
not.
Some U.S. legislators tried to end
tobacco subsidies fully in the new farm
bill but didn't succeed. (Reuters)
But U.S. cotton producers are a powerful
lobby. They account for most of the
world's cotton exports, and employ
200,000 people in 17 states.
Between 1995 and 2012, the U.S.
government has paid its cotton producers
$32.9 billion, giving them a crushing
advantage over farmers in other
countries, particularly those struggling
along in poor nations like Mali.
So, Brazil took the U.S. to the World
Trade Organization for arbitration, and
Brazil won.
The Americans appealed, and the
Brazilians won again. And again.
Finally, in 2010, with the WTO's
approval, Brazil began compiling a list
of retaliatory tariffs against American
goods, in effect threatening a trade
war.
It was at that point that someone in
Washington came up with the idea of
simply bribing the Brazilians.
As a strategy, it was very effective.
For $147 million a year, the Brazilian
cotton growers agreed to shut up and let
the Americans keep subsidizing their
cotton growers.
Voters in the 17 cotton-producing states
would continue to send (mostly)
Republicans to Congress, and Ronald
Reagan's small-government delusion would
remain intact.
"Wow," said a Canadian official I know,
when told about the sweet Brazilian
deal. "Our beef producers would love
some of that action."
Not so COOL
For livestock producers, country-of-
origin labelling is currently Canada's
biggest beef, so to speak, with the
Americans.
Since 2002, largely as a result of the
mad cow scare in Britain, the U.S. has
required meat producers to segregate and
label animals from abroad, which makes
it more expensive to sell Canadian beef
here, and therefore injures Canadian
meat exports. They've dropped by about
half since 2008.
The Canadian government regards county-
of-origin labelling, or COOL, as a legal
gimmick where the real intent is to
protect the American beef industry from
competition. (The beef in both countries
is genetically identical, and the herds
are for all intents and purposes
integrated.)
So Canada, like Brazil, took the U.S. to
the WTO and won its case.
But the Americans came up with a legal
workaround that just made matters worse
for Canadian farmers. And the recent
farm bill from Congress failed to make
the change Ottawa asked for, so the
Canadian government is now threatening
to go back to the WTO.
Canada warns of trade retaliation as
U.S. fails to change labelling rules
For all the good that will do.
As Canada has learned during its many
years of struggling with the Americans
over softwood lumber exports, taking on
the protectionist American behemoth
(which believes itself to be a fair
trader) can be self-defeating.
Big vs. small
"It's not a matter of right and wrong,
or fair and unfair, it's a matter of
bigger and smaller," says Peter Clark, a
former trade negotiator who runs a
consultancy in Ottawa. "The Americans
have enough economic clout to do what
they want, and Canada has to keep
looking over its shoulder."
Agriculture Minister Gerry Ritz had been
hoping the U.S. Congress would change
the country-of-origin labelling rules
when it passed the new farm bill. But it
didn't and now, he says, Canada might go
back to the WTO to see trade redress.
(Canadian Press)
Take that massive farm bill just passed
by Congress.
It will spend a trillion dollars over 10
years, much more than President Barack
Obama's stimulus spending that
Republicans railed against so angrily,
and yet it has gone largely unreported
in U.S. media.
The bill is a cornucopia of government
subsidies and largesse — to satisfy
Democrats, a lot of it actually goes to
food-stamp programs in urban areas.
But it is also a massive crutch for
American agribusiness, mostly courtesy
of congressional Republicans, who are
supposed to stand for lower spending and
less government.
The irony here is that Canada, regarded
by American conservatives as some kind
of socialist co-operative, has actually
been doing the opposite: reducing farm
subsidies and making farmers more
responsible for their own losses, while
the U.S. Congress keeps the public teat
open.
And all the while, says Peter Clark,
"Americans actually don't think they are
subsidized."
That's not to say there aren't angry
conservative voices here. The Wall
Street Journal called the farm bill a
raid on taxpayers: "Handouts to
agribusiness and millionaires? Continued
trade protectionism for the sugar
industry? It's all still there."
Brazil wasn't terribly impressed,
either. Last fall, after the arbitrary
cuts to government spending known as
"the sequester" put an end to
Washington's millions in hush money to
Brazilian cotton producers, the
Brazilian government once again began
readying barriers against a wide range
of U.S. goods.
A trade war could be under way by the
end of this month. Unless, that is,
Washington figures out some new way to
protect its protectionism.
Share this story
Neil Macdonald
U.S. President Barack Obama takes to a
stage backed with harvesters and hay on
Friday as he travelled to Michigan to
sign the nearly $1 trillion farm bill
into law. The law cuts direct farm
subsidies but replaces them with more
generous government-paid crop
insurance. (Reuters)
i
New U.S. farm bill coddles farmers,
ignores Canada's plea
When it comes to its farmers, the U.S.
is a veritable nanny state
ANALYSISFeb 11, 2014 9:11 AM ET
Neil Macdonald, CBC News
Among the many myths Americans entertain
about themselves is the belief they're
self-made; that any success they might
enjoy is in spite, rather than with the
help, of government.
As Ronald Reagan once said, to a great
chorus of cheers, "government isn't the
solution to our problem, government IS
the problem."
Nowhere is that notion more fiercely
beloved than in the vast spaces between
this nation's cities; in gun-toting,
Republican-voting, tall-standing, rural
America.
It's a delusion, of course. U.S. farmers
are practically wards of the American
nanny state.
But it's a delusion the legislators who
represent rural America — both
Republican and Democrat — are willing to
pay to maintain.
Big time, in fact: propping up delusions
wins elections.
Take the outrageous story of
Washington's hush money to Brazil. It's
not one that's widely known in the U.S.,
probably because it cuts against
Reagan's government-is-the-problem
narrative.
But it beautifully illustrates the
lengths to which Congress will go to
coddle and protect certain American
businesses, even as Washington accuses
other countries, like China or even
Canada, of unfair trading when they do
the same thing.
Brazil's hush money
The Brazil story goes back to 2002 when
the government of Brazil lodged a
complaint against the U.S. government
for unfairly subsidizing American cotton
farmers.
The Brazilians had an excellent case;
Washington has for decades been paying
farmers cash whether they grow crops or
not.
Some U.S. legislators tried to end
tobacco subsidies fully in the new farm
bill but didn't succeed. (Reuters)
But U.S. cotton producers are a powerful
lobby. They account for most of the
world's cotton exports, and employ
200,000 people in 17 states.
Between 1995 and 2012, the U.S.
government has paid its cotton producers
$32.9 billion, giving them a crushing
advantage over farmers in other
countries, particularly those struggling
along in poor nations like Mali.
So, Brazil took the U.S. to the World
Trade Organization for arbitration, and
Brazil won.
The Americans appealed, and the
Brazilians won again. And again.
Finally, in 2010, with the WTO's
approval, Brazil began compiling a list
of retaliatory tariffs against American
goods, in effect threatening a trade
war.
It was at that point that someone in
Washington came up with the idea of
simply bribing the Brazilians.
As a strategy, it was very effective.
For $147 million a year, the Brazilian
cotton growers agreed to shut up and let
the Americans keep subsidizing their
cotton growers.
Voters in the 17 cotton-producing states
would continue to send (mostly)
Republicans to Congress, and Ronald
Reagan's small-government delusion would
remain intact.
"Wow," said a Canadian official I know,
when told about the sweet Brazilian
deal. "Our beef producers would love
some of that action."
Not so COOL
For livestock producers, country-of-
origin labelling is currently Canada's
biggest beef, so to speak, with the
Americans.
Since 2002, largely as a result of the
mad cow scare in Britain, the U.S. has
required meat producers to segregate and
label animals from abroad, which makes
it more expensive to sell Canadian beef
here, and therefore injures Canadian
meat exports. They've dropped by about
half since 2008.
The Canadian government regards county-
of-origin labelling, or COOL, as a legal
gimmick where the real intent is to
protect the American beef industry from
competition. (The beef in both countries
is genetically identical, and the herds
are for all intents and purposes
integrated.)
So Canada, like Brazil, took the U.S. to
the WTO and won its case.
But the Americans came up with a legal
workaround that just made matters worse
for Canadian farmers. And the recent
farm bill from Congress failed to make
the change Ottawa asked for, so the
Canadian government is now threatening
to go back to the WTO.
Canada warns of trade retaliation as
U.S. fails to change labelling rules
For all the good that will do.
As Canada has learned during its many
years of struggling with the Americans
over softwood lumber exports, taking on
the protectionist American behemoth
(which believes itself to be a fair
trader) can be self-defeating.
Big vs. small
"It's not a matter of right and wrong,
or fair and unfair, it's a matter of
bigger and smaller," says Peter Clark, a
former trade negotiator who runs a
consultancy in Ottawa. "The Americans
have enough economic clout to do what
they want, and Canada has to keep
looking over its shoulder."
Agriculture Minister Gerry Ritz had been
hoping the U.S. Congress would change
the country-of-origin labelling rules
when it passed the new farm bill. But it
didn't and now, he says, Canada might go
back to the WTO to see trade redress.
(Canadian Press)
Take that massive farm bill just passed
by Congress.
It will spend a trillion dollars over 10
years, much more than President Barack
Obama's stimulus spending that
Republicans railed against so angrily,
and yet it has gone largely unreported
in U.S. media.
The bill is a cornucopia of government
subsidies and largesse — to satisfy
Democrats, a lot of it actually goes to
food-stamp programs in urban areas.
But it is also a massive crutch for
American agribusiness, mostly courtesy
of congressional Republicans, who are
supposed to stand for lower spending and
less government.
The irony here is that Canada, regarded
by American conservatives as some kind
of socialist co-operative, has actually
been doing the opposite: reducing farm
subsidies and making farmers more
responsible for their own losses, while
the U.S. Congress keeps the public teat
open.
And all the while, says Peter Clark,
"Americans actually don't think they are
subsidized."
That's not to say there aren't angry
conservative voices here. The Wall
Street Journal called the farm bill a
raid on taxpayers: "Handouts to
agribusiness and millionaires? Continued
trade protectionism for the sugar
industry? It's all still there."
Brazil wasn't terribly impressed,
either. Last fall, after the arbitrary
cuts to government spending known as
"the sequester" put an end to
Washington's millions in hush money to
Brazilian cotton producers, the
Brazilian government once again began
readying barriers against a wide range
of U.S. goods.
A trade war could be under way by the
end of this month. Unless, that is,
Washington figures out some new way to
protect its protectionism.
Share this story
Neil Macdonald