September 26, 2005--"Let Them Eat Transportation"
Is there a better example of doing harm with the best of intentions? Keep reading.
I suspect that most of you are not up to date about agricultural subsidies. True? It’s not what makes your heart beat fast first thing in the morning or gets your blood boiling later in the day? I admit it, there are other things of concern and interest higher on my list. So indulge me here for a bit so I can fill you in.
The subsidies take a number of forms—first there are the out and out cash subsidies that go mainly to huge farm conglomerates, to the titans of Agri-Business. Most famously they are given money not to plant this crop or that so as not to flood the market and thereby lower prices. And then, in spite of the fact that those most behind these subsides are devout believers in the Blind Hand of the Free Market, they vote to give farmers cash (tax monies) to compensate them for selling their products at a price that allows them to be competitive—in other word the are guaranteed to turn a profit through governmental subsidies. How laisse faire.
There is a corollary form of subsidy—to transporters who bring agricultural products to the markets—truckers, rail freight haulers, and river barges. They too get federal money to assure that their piece of the action is protected and profitable.
This can all be fairly benign—after all what is $19 billion a year in subsidies of this kind to a government (ours) spending that every few weeks in Iraq? And so what if our Corn Flakes cost a little more. We probably shouldn’t be eating that stuff anyway.
But it gets much less benign when you look at how this plays our globally. Especially in places where there is widespread starvation and US agricultural products (also federally subsidized) are to be made available to help alleviate the suffering.
Let me take you to the situation in Niger through a series of recent reports in the NY Times (see 3 or 4 links below) to show how what we are up to there, through these boondoggle programs, winds up doing harm with all the best of intentions.
There have been crop failures in Niger for some time, and we know from pre-hurricane images on the cable news channels how horrific this has been for families and especially children. There has been a worldwide effort to bring food to the starving, with the US committed to be a significant supplier. So far so good. But when one looks closer at how this is actually playing out the picture does not look very benevolent.
First, the good news—in Niger after a season of good rains they are now harvesting millet and other foodstuffs. This should enable the Niger farmers to recover by bringing their products to market while at the same time contributing to the alleviation of suffering. The bad news, though, is that the food that is being distributed by the aid agencies, in combination with the locally grown products, is contributing to an oversupply and an associated decline in food prices. Thus the farmers who just now have the capacity to bounce back from the effects of the drought are ironically being penalized for their success.
Further, since millet is poor in protein Niger needs to receive other grains to enrich peoples’ diets. Through the US Agency for International Development there is a billion dollars available right now to help. But Congress is blocking USAID's attempt to do so in a way that would actually help. The US has wheat surpluses and USAID would like to get some of that to Niger and neighboring countries. But because wheat in the US is heavily subsidized it will arrive at below local market prices and thereby compete unfairly with African grown grains that are produced without subsidies. More problematic, though the Bush administration would also like to allow USAID to use some of its billion dollars to purchase agricultural products grown in Africa and thus assure that it gets to the starving people quickly, both the House and Senate have stepped in to block this.
Why might they be doing this when the needs are so palpable and the solution so simple? To protect US interests you may not be surprised to learn—our Congress is insisting that all food distributed by USAID must be purchased from US farmers and all must be brought to Africa on US-flagged ships. Shipping this way adds 40 to 50 percent to the food aid budget and delivering the food this way typically takes four months.
Andrew Natsios, administrator of USAID says the government would be able to buy twice as much food for the same money if the transportation money could be saved. To quote him, “You can’t eat transportation.”
Then again, maybe you can—it all depends on who's doing the eating.
I suspect that most of you are not up to date about agricultural subsidies. True? It’s not what makes your heart beat fast first thing in the morning or gets your blood boiling later in the day? I admit it, there are other things of concern and interest higher on my list. So indulge me here for a bit so I can fill you in.
The subsidies take a number of forms—first there are the out and out cash subsidies that go mainly to huge farm conglomerates, to the titans of Agri-Business. Most famously they are given money not to plant this crop or that so as not to flood the market and thereby lower prices. And then, in spite of the fact that those most behind these subsides are devout believers in the Blind Hand of the Free Market, they vote to give farmers cash (tax monies) to compensate them for selling their products at a price that allows them to be competitive—in other word the are guaranteed to turn a profit through governmental subsidies. How laisse faire.
There is a corollary form of subsidy—to transporters who bring agricultural products to the markets—truckers, rail freight haulers, and river barges. They too get federal money to assure that their piece of the action is protected and profitable.
This can all be fairly benign—after all what is $19 billion a year in subsidies of this kind to a government (ours) spending that every few weeks in Iraq? And so what if our Corn Flakes cost a little more. We probably shouldn’t be eating that stuff anyway.
But it gets much less benign when you look at how this plays our globally. Especially in places where there is widespread starvation and US agricultural products (also federally subsidized) are to be made available to help alleviate the suffering.
Let me take you to the situation in Niger through a series of recent reports in the NY Times (see 3 or 4 links below) to show how what we are up to there, through these boondoggle programs, winds up doing harm with all the best of intentions.
There have been crop failures in Niger for some time, and we know from pre-hurricane images on the cable news channels how horrific this has been for families and especially children. There has been a worldwide effort to bring food to the starving, with the US committed to be a significant supplier. So far so good. But when one looks closer at how this is actually playing out the picture does not look very benevolent.
First, the good news—in Niger after a season of good rains they are now harvesting millet and other foodstuffs. This should enable the Niger farmers to recover by bringing their products to market while at the same time contributing to the alleviation of suffering. The bad news, though, is that the food that is being distributed by the aid agencies, in combination with the locally grown products, is contributing to an oversupply and an associated decline in food prices. Thus the farmers who just now have the capacity to bounce back from the effects of the drought are ironically being penalized for their success.
Further, since millet is poor in protein Niger needs to receive other grains to enrich peoples’ diets. Through the US Agency for International Development there is a billion dollars available right now to help. But Congress is blocking USAID's attempt to do so in a way that would actually help. The US has wheat surpluses and USAID would like to get some of that to Niger and neighboring countries. But because wheat in the US is heavily subsidized it will arrive at below local market prices and thereby compete unfairly with African grown grains that are produced without subsidies. More problematic, though the Bush administration would also like to allow USAID to use some of its billion dollars to purchase agricultural products grown in Africa and thus assure that it gets to the starving people quickly, both the House and Senate have stepped in to block this.
Why might they be doing this when the needs are so palpable and the solution so simple? To protect US interests you may not be surprised to learn—our Congress is insisting that all food distributed by USAID must be purchased from US farmers and all must be brought to Africa on US-flagged ships. Shipping this way adds 40 to 50 percent to the food aid budget and delivering the food this way typically takes four months.
Andrew Natsios, administrator of USAID says the government would be able to buy twice as much food for the same money if the transportation money could be saved. To quote him, “You can’t eat transportation.”
Then again, maybe you can—it all depends on who's doing the eating.
posted by Steven Zwerling at
1:38 PM
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