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Copyright © 2001 Eastern Ontario Farmers Forum Inc. All Rights Reserved

Feds could renege on aid package

For the sake of argument   
By John Phillips

Life is an uncertainty, like growing crops or disaster help from a government’s treasury. A case in point is the $4.3 billion supposedly on the way from Ottawa. It seems payments depend on President George Bush’s recent proposal to slash all worldwide farm subsidies by $150 billion.

Further, average global farm tariffs would be slashed to 15 per cent from today’s 62 per cent. All this may sound great to urban taxpayers but the impact on our farmers is blithely overlooked. Most incomes already are perilously low and the loss of $2.7 billion likely would push thousands of families over the brink. It’s almost certain the EC (European Community) will pay lip service to the idea but continue helping its smaller farmers with more than $70 billion a year.

Then there are the U.S. mid-term elections in November. President Bush seeks to regain control of the Senate, an objective dependent on the major farm states. So cutting any part of Washington’s controversial subsidy program would court electoral disaster. American farm families need help almost as much as ours.

Believe it or not, Ottawa welcomes the move. Senior bureaucrat Vern Greenshields told the media: "It’s a sign of leadership and we’re happy to see it."

Really? If his comment is based on reality, supporting evidence is as scarce as hen’s teeth. As usual, the Europeans have done their homework and feel the U.S. plan is self-serving and hammers most other programs. EU spokesman Irishman Gerry Kiely says "[It] is designed in such a way that it is others who will have to make any sacrifice."

He explains that for his farmers the proposal is "unrealistic." While the Europeans would surrender more than $50 billion a year, Americans lose only $13 billion from $270 billion promised them over the next 10 years. Moreover, Japan probably will mount strong opposition since its farmers could suffer a similar shortfall of $50 billion.

The EU’s rationale for long-term agricultural subsidies rests on two pillars: an advanced high-cost society cannot be expected to compete with Third World dollar-a-day producers, and smaller European enterprises are an integral part of an efficient economy. A diversified industrial growth, with plants located in most small cities and towns, relies on farm families for supplying the general work force.

Keeping Europe’s agriculture healthy with various farm programs is beneficial to urban business. This explains why there is little strong opposition to government rural programs, particularly when recent trends place greater accent on popular environmental and animal care projects such as hotel-style barns. So forgoing the proposed $50 billion a year seems a non-starter.

It looks as if President Bush is playing games as well as polishing his free trade image. This means our farmers must keep a sharp eye on Ottawa’s gurus, otherwise the gang in Ottawa could slip from its $4.3 billion pledge and spend the money on leadership bribes.