Farmers In Fight Against Farm Subsidies 3/14/2006

Pork Chops
In Fight Against Farm Subsidies,
Even Farmers Are Joining Foes

A Snowballing Movement
Draws Churches, CEOs;
Huge Hurdles in Congress
A Bolster to WTO Pressure
By SCOTT KILMAN and ROGER THUROW
March 14, 2006; Page A1

AMES, Iowa -- A movement to uproot crop subsidies, which have been worth nearly $600 billion to U.S. farmers over the decades, is gaining ground in some unlikely places -- including down on the farm.

In Iowa, one of the most heavily subsidized states, a Republican running to be state agriculture secretary is telling big farmers they should get smaller checks. Mark W. Leonard, who collects subsidies himself and campaigns in a white cowboy hat, told a room full of farmers recently that federal payments spur overproduction, which depresses prices for poor growers overseas.

"From a Christian standpoint, what it is doing to Africa tugs at your heartstrings," Mr. Leonard told them. Last year, he helped humanitarian group Oxfam International in its anti-subsidy campaign by escorting a cotton farmer from Mali to church gatherings near his farm in Holstein.


There is a long history of mostly failed attempts to pare farm payments. But the current anti-subsidy sentiment, rising over the last year in the U.S., is stirring attention because it is unusually broad. Students for Social Justice at Baylor University in Texas have dumped cotton balls on the ground to protest cotton subsidies. The foundation of late Nascar legend Dale Earnhardt has teamed up with rock star Bono, whose movement wants to overhaul Western agriculture policies to boost African development.

In Washington, D.C., the Alliance for Sensible Agriculture Policies is meeting to share ideas about changing the farm bill. Participants include Oxfam and Environmental Defense from the left, the National Taxpayers Union on the right and the libertarian Cato Institute. Prominent philanthropic organizations, including the William and Flora Hewlett Foundation, are financing some of this advocacy.

"There are a growing number of people who want to weigh in on farm policy," says Rep. Jerry Moran, a Kansas Republican who sits on the House Agriculture Committee. "They care about Africa. They care about the environment. They care about nutrition."

Grass-roots groups are riding the momentum that began with the push to forgive the debt of poor countries in the late 1990s. Another spur to the anti-subsidy movement comes from the World Trade Organization, where the U.S. is coming under increasing pressure to rein in farm spending.

The movement is tilting against one of the most deeply entrenched federal entitlements. In 1996, a Republican-led Congress passed legislation to wean farmers from subsidies over seven years. But Washington backed off as the farm economy entered one of its cyclical tailspins. The 2002 farm bill signed by President Bush is one of the most lavish ever, even as the economic cycle improved. Last year, the government paid a record $23 billion to farmers.


Shayne Moore, third from left, learns to pick tea leaves in Kenya with fellow members of the Wheaton Bible Church from Wheaton, Ill.


There isn't any serious talk in Washington of wiping out subsidies entirely, and the powerful farm lobby has defended itself against attacks in the past. Legislators representing districts with farming interests, particularly states growing subsidy-rich cotton and rice, consider this a crucial issue and could well block any change in Congress. Because almost every state has farmers, virtually all 100 senators can sympathize with farming interests. In addition, the Senate and House agriculture committees have dominated policy for decades and are largely given a free hand by the governing administration.

But now, farm leaders, federal officials and politicians are seriously discussing alternatives, such as buying farmers out from subsidy programs, incentives to encourage farmers to save during good years and paying growers for environmentally friendly practices. The system could be changed during the current Doha Development Round trade negotiations at the WTO or in Congress during next year's renewal of the farm bill.

Any significant change in the payment formula would rock the farm economy. Federal money could shift between regions, possibly at the expense of Southern farmers who are subsidized to such a degree currently that no new system would likely maintain their level of payments. The price of land, which is tied to the income it generates, would likely fall, denting farmers' biggest source of wealth and collateral.

Moreover, farmers could change what they grow, for example from cotton to vegetables, and U.S. consumers could see food costs rise. The gluts spurred by production-based subsidies are a key reason the U.S. enjoys some of the world's lowest food prices.

The government created subsidies during the Great Depression to fight rural poverty. At the time, 25% of the U.S. population lived on farms. Farmers could get federal money for producing commodities including corn, cotton and wheat when market prices fell below certain levels.

Today, farmers represent less than 1% of the population. Yet, thanks to labor-saving technology, their operations have exploded in size. Since subsidies remain tied to production, subsidy checks have ballooned. The government caps annual payments to an individual farmer at $360,000, though loopholes allow higher payments.

Most subsidies go to farmers who are wealthier than the typical U.S. taxpayer. Little of it goes to poor farmers because subsides are tied to production. According to an analysis by Environmental Working Group, 72% of subsidy money goes to 10% of the recipients. The group opposes output-linked subsidies on the grounds that overproduction hurts the environment. Nor do subsidies do much for rural economic development. Most rural people are no longer engaged in farming and two-thirds of those who farm are growing nonsubsidized crops such as fruits and vegetables.

Reform Camp

The Bush administration is in the reform camp. At the WTO, it has offered to cut by 60% the amount of money it can spend every year on certain subsidies, if the European Union cuts by 83%, a move that the U.S. says would bring both blocs into line. Last month, the White House Council of Economic Advisers took the unusual step of devoting a chapter in the annual "Economic Report of the President" to lambasting crop subsidies, saying they "hurt countries that could benefit from exporting these commodities to the United States."

President Bush has yet to propose his own specific solutions. Administration economists say there are lots of ways to get money to farmers that don't depress international prices, such as insurance programs that protect against big drops in revenue.

The White House has the support of other businesses that would like to see the subsidy question settled in order to spur the lowering of overseas trade barriers on their goods. During a recent meeting in a private club on Chicago's Michigan Avenue, business executives, bankers and economists dined on stuffed chicken served on bone china while preparing a report arguing for an overhaul of the farm program. Several participants are executives of Fortune 500 companies. The task force was assembled by the Chicago Council on Foreign Relations, an 84-year-old nonprofit group that includes many of the Midwest's biggest firms.

The grass-roots campaign to reform subsidies is similar to the one that raised the profile of the African debt crisis. One of the main debt-relief agitators, Irish rock star Bono of the band U2, made a 14-city U.S. speaking tour in November 2002 to raise awareness of African poverty, especially among churches and the Christian music scene.


Bono's advocacy organization, Debt AIDS Trade Africa, or DATA, has now joined with the One Campaign, an alliance consisting of organizations such as Oxfam, to target agriculture policies and subsidies. "If you care about debt cancellation and AIDS, then you have to care about the trade issues, too," says Jamie Drummond, executive director of DATA.

By campaigning on campuses, at rock concerts and at Nascar races, these activists have generated hundreds of thousands of petition signatures and postcards addressed to President Bush, U.S. Trade Representative Rob Portman and members of Congress, urging them to reduce farm subsidies.

One of those listening on Bono's speaking tour was Shayne Moore, a 35-year-old mother of three in Wheaton, Ill. Ms. Moore, a graduate of Wheaton College, an evangelical-Christian school near Chicago, says she "couldn't figure out what my conservative alma mater was doing giving Bono a voice." But "that night changed my life. Bono said something like, 'Politicians get nervous when rock stars and soccer moms get involved.' Well, I thought, I'm a soccer mom."

She traveled to Honduras and Kenya at her own expense, and to last summer's meeting in Scotland of the Group of Eight leading nations, a trip that was paid for by aid groups. Back home, she tells groups what she has seen. "The person picking cotton in rags is just as important as the person picking cotton in an awesome combine," she says in an interview. "I don't begrudge him the awesome combine, but not at the expense of the farmer in rags."

Some humanitarian groups are spreading their message in states that are home to key members of congressional agriculture committees, hoping to exploit splits within the farm business. Subsidized grain farmers in the Midwest are jealous that Southern farmers get more aid for cotton and rice. Young growers complain that subsidies raise the price of land to unaffordable levels. Oxfam America has had five organizers working for more than a year in states such as Kansas, Illinois and California.

The field organizer in Kansas is a far cry from the typical idealistic humanitarian worker. A farmer who often votes Republican, Jim French, 52, abhors attention-getting stunts such as dumping crops on the ground. He came to the attention of Oxfam through his work for Kansas Rural Center, a nonprofit advocacy group for family farmers.

He's pushing the idea that subsidies should be linked to something other than production, such as environmental improvements. "There's a common solution for a problem of the farmers on the Great Plains and a problem of the farmers in Africa," Mr. French says.

He has driven his 12-year-old, hail-pocked Buick LeSabre nearly 20,000 miles over the past year for Oxfam, speaking at farmer conventions, prodding editorial writers at Great Plains newspapers and attending community meetings with members of Congress home from Washington. Last September, he collected hundreds of signatures for a fair-trade petition at a concert in the suburbs of Kansas City, Kan., by a British band he'd never heard of before: Coldplay. In April, he plans to escort an African farmer around the Great Plains.

Mr. French directs a church choir in his hometown, Partridge, Kan., so part of his strategy is to seek out clergy. One recent morning near Hutchinson, nine Mennonite church leaders gathered at a roadside restaurant called Dutch Kitchen. Mr. French wanted to address their congregations. "Instead of constantly sending food aid to Africa, we could do so much more to improve their lives if we make the markets fair," Mr. French said. "Doesn't this message fit with the Gospels?"

Intriguing Question

Mennonites usually avoid political arguments. But the question intrigued the bearded men, some whom have done missionary work with poor farmers overseas. Pastor Miles Reimer said they'd consider Mr. French's appeal. "I think the Mennonites would lean towards helping the small farmers around the world," he said.

In Iowa, Mr. Leonard's campaign for state agriculture secretary wouldn't put him in position to directly change federal policy. But his status as a leading Republican candidate reflects a growing dissatisfaction there with the way subsidies work.

On the campaign stump, Mr. Leonard, 49, who raises cattle and crops, argues that production-based subsidies increase farmers' incentives to get bigger, a development that's speeding the depopulation of the countryside as farmers buy up more acreage.

"Inadvertently, it is a government-sponsored farm-consolidation program," he tells a group of farmers in Ames. "What we need is for that subsidy money to be divided among more farmers."

That sentiment brought him into Oxfam's orbit. Last year, the group was seeking a farmer to speak in Washington in a favor of legislation co-sponsored by Iowa Republican Sen. Charles Grassley that would cut the maximum subsidy payment to a farmer to $250,000 from $360,000. The proposal was defeated in November, 46-53, but the debate helped to pull together people of disparate politics now mobilizing to work on the next Farm Bill.

"As a conservative, Oxfam and I can disagree on a lot of social issues," says Mr. Leonard, who leaves his Oxfam button at home while out campaigning. "But for us to agree on subsidies means something big is happening."

Write to Scott Kilman at scott.kilman@wsj.com and Roger Thurow at roger.thurow@wsj.com