New Agriculture Subsidies:
Boosting U.S. Agribusiness at the Expense of the World’s People

Jun 3, 2002

Congress recently passed a huge so-called farm support bill with votes from both Democrats and Republicans. President Bush has signed it into law.

This bill will cost almost 200 billion dollars over the next 10 years. It will dramatically increase subsidies on large staple crops like soybeans and wheat, introduce new subsidies on crops like lentils and peanuts, and re-establish previously eliminated subsidies on crops like honey, wool and mohair.

International monitors estimate that of every $1 in U.S. farm revenue, about 25 cents already comes from existing government subsidy programs. This new farm subsidy bill will almost double the overall level of U.S. agricultural subsidies.

Like other farm bills before it, this subsidy bill was advertised in Washington as essential to save America’s small farmers from bankruptcy. But it will do nothing of the sort, just as past so-called farm support bills have done nothing of the sort. In fact, by building up the big agricultural corporations, the subsidies have helped wipe out the small farmer.

Three-quarters of all the subsidies paid under this latest bill will go to the biggest and richest 10% of farmers–most importantly to the big corporate farmers who sell most of their crops to huge agribusinesses such as Cargill or Archer Daniels Midland (ADM) that then export much of this huge output to other countries.

What this bill is designed to do is help the big U.S. agribusinesses take over many more of the world’s markets for agricultural products.

Oxfam, a London-based international relief organization, recently estimated that because of existing government subsidies, the U.S. has already been selling surplus wheat on world markets at prices 46% below the cost of production, and corn at 20% below costs. With the sharply increased subsidies in the new farm bill, it is expected that millions of poor farmers in Africa, Asia and Latin America will now be driven into bankruptcy by U.S. government subsidized agricultural products. This will extend and reinforce the domination of world agricultural markets by U.S. agribusiness, while helping small farmers in the U.S. virtually none at all.

Big farm agriculture in the U.S. is indeed very efficient. It is capable, if properly organized, of providing food for almost the whole world’s population, even while using methods would not destroy the environment. In a world economy organized to meet the needs of ordinary people all over the globe, U.S. big-farm productivity could be harnessed to help end world hunger.

It’s the mark of how degenerate capitalism is that this bill will do just the opposite–over time increasing world hunger by eliminating the meager livelihood of millions of poor farmers in other countries.