It is believed, with some cause, that partisanship is the reason "nothing gets done" in Washington. So what if there was an issue, involving the poorest of the poor, on which there was bipartisan agreement, and still nothing got done? Our most battle-scarred readers will guess immediately what is at issue -- farm subsidies!

At the moment, the sun and moon have aligned to form a left-right coalition to raise the lot of some of Africa's farmers. Arguably the greatest misfortune to befall these farmers is their crop: cotton. In the U.S., the lords of King Cotton still have the Washington political system locked up to ensure a steady flow of subsidies, no matter how outrageous. This year, a coalition to unlock the subsidy programs includes Oxfam America on the left, the Environmental Working Group more or less in the center and the Cato Institute on the right.

In a June 2007 study on the effects of U.S. subsidies on West African cotton producers, University of California Davis economists Daniel Sumner and Julian Alston, and Henrich Brunke, formerly a research specialist at UC Davis, estimated that some 10 million Africans could see their incomes from cotton increase 8% to 20% if the U.S. reformed its subsidies and world supplies of cotton returned to market levels. "For farmers living on less than $1 a day, this means more money for food, medicines, school fees and fertilizer," write the authors. The paper's research was supported by Oxfam America, the left-wing NGO.

One reason the cotton program persists is that it has been made so arcane that it is fully understood only by the farmers who benefit and some gnomes at the Agriculture Department.

The program provides three guarantees to growers. There is a direct payment tied to base acreage and historical yields whether cotton is grown or not. There is also a so-called counter-cyclical payment designed to ensure an artificially high "target price" set by the government when market prices are low. Finally, and most egregious, there's a guaranteed government loan rate for the farmers that can be repaid at lower world market prices.

In 2005 cotton subsidies totaled $3.3 billion, up from $30 million in 1995, according to the Environmental Working Group, which tracks U.S. subsidies. This industrial policy primarily benefits large corporate farms and their wealthy owners. Of the $19.1 billion that EWG says was paid out over that decade, the top 10% of cotton-subsidy recipients got more than 80%, or almost $15.5 billion. The bottom 80% of recipients had to make do with $1.4 billion. This is a brazen wealth transfer to fat cats from the tax-paying middle class...
Full Story: http://online.wsj.com/article/SB119240951853158803.html