Organic Consumers Association

U.S. Cotton Subsidies: Killing Farmers & Poisoning Consumers & the Earth

Cotton Subsidies: Who Needs Them, Who Gets Them?

by Will Allen, Eddie DeAnda and Kate Duesterberg

Will Allen, Eddie DeAnda, and Kate Duesterberg are organic farmers and
sustainable agriculture activists based in Vermont.

Will Allen is also a Policy Board Member of the Organic Consumers
Association <www.organicconsumers./org> and a consultant for OCA's Clothes
for a Change Campaign.

At the latest round of the World Trade Organization (WTO) ministerial
meetings in Cancun, a major sticking point in the negotiations between the
developed nations and the developing nations focused on agricultural
subsidies, especially cotton. Why cotton? Because cotton is one of the
most important and widely traded crops in international commerce, that¹s
why. Cotton is grown in 85 countries and exported by 55 (Cotton Council
International) nations. Until recently, cotton was an important source of
foreign exchange earnings for most of these exporting countries.

After China, the US is the largest cotton producer and by far the largest
exporter in the world. China uses most of its production at home, while the
US regularly ships 40 to 60% of its yield abroad. As the largest exporter,
the US currently accounts for about 60% of the world¹s exported cotton.
Large corporate farmers and US brokers are able to manipulate price by
selling and dumping taxpayer subsidized cotton on the world market for
significantly less than the cost of production, which allows them to control
the world cotton market with our tax money. Since 1995, 78% of the 10.66
billion dollars in US subsidies for cotton went to only 10% of the cotton
farmers. (Environmental Working Group Subsidy Data Base, 1995-2002)

In the early 1990s world cotton prices were high, ranging between 60 and 90
cents per pound of upland cotton. These prices enabled chemical salesmen,
the World Bank, and other pro-chemical agencies to convince hundreds of
thousands of farmers around the world to give up their multi-crop farms and
grow only one crop. Cotton.

At about the same time, negotiations were nearing completion on the North
American Free Trade Agreement (NAFTA). This agreement was designed to define
and enforce the rules of trade between Canada, the US and Mexico and
facilitate the free movement of capital and goods between the three
countries. Clinton signed off on NAFTA and it became law in January, 1994,
subsequently, the General Agreement on Tariffs and Trade (GATT) was approved
and Congress finally passed the Farm Bill in 1996, which is known as the
Freedom to Farm Act.

The World Trade Organization (WTO) took over the functions of GATT whose
mandate is to eliminate all remaining tariff and non-tariff barriers to the
movement of capital and goods across national borders. NAFTA, GATT and
subsequently the WTO encouraged a relaxation of trade barriers and tariffs
and the elimination of subsidies, if the developing countries wanted to
participate in multilateral trade agreements. Many countries reduced or
eliminated their subsidies and tariffs at the behest of these trade
organizations. While trusting and anxious nations abided by the "free
trade" guidelines, the wealthy US cotton farmers asserted their power and
helped pass the 1996 Farm Bill, which increased their subsidies by more than
1000% from 1995 to 2001 (Environmental Working Group Subsidy Data Base

As a result of reduced barriers and increased subsidies, millions of bales
(480lbs. per bale) of US cotton were dumped on the world market in 1996 and
1997 at rock bottom prices. The price of cotton dropped to 48 cents in
1997 and bottomed out at 28 cents in 2000. It is currently hovering around
48 cents. At 48 cents a pound, cotton was being sold at about 30 cents less
than the average cost to grow it and 40 cents less than the average of what
US farmers received for it at the cotton gin. Ten percent of the farmers
received about 8.3 billion dollars for largely surplus cotton from 1995
through 2002.

In 2001 US cotton sold for about 3.8 billion dollars, but cotton farmers
received at least an additional 3.03 billion dollars in subsidies and other
government payments (BBC estimates 3.9 billion, EWG 3.03 billion, the World
Bank and the USDA estimate 2.1 billion). Whatever the amount, the US
taxpayer paid for the subsidies and enabled the repeated dumping of
subsidized cotton which depressed the world price by more than one-half.
And, it continues to stay depressed because of free trade agreements and the
2002 Farm Bill that perpetuated the corporate giveaway, known as the US farm
subsidy system.

As a result of the price free-fall, hundreds of thousands of cotton farmers
around the world who were lured into the export cotton business couldn¹t pay
their farm loans and chemical bills and lost their farms. Not only were
foreign farmers impacted by the so-called free trade agreements, so were US
farmers. In 1990, before NAFTA, there were nearly 40,000 US cotton farmers.
Today there are about half that many (US Census of Agriculture).

History of US Subsidies

Subsidy programs were created during the 1930s and 1940s during the Great
Depression and the Second World War. These programs were originally
designed to keep farmers on the land, to provide necessary commodities
during times of war or natural emergencies, and to promote resource
conservation. Currently, the top commodity program crops and products are,
in order of subsidized amount: corn, wheat, soybeans, cotton, rice, sorghum,
livestock, dairy, barley, peanuts, tobacco, sunflower, sugar, oats, apple,
wool, canola and sheep meat. More than 80% of the total subsidy budget
regularly goes to these crops and products (Environmental Working Group
Subsidy Data Base 1995-2002).

In the 1920s and 1930s the US Census Bureau estimated that there were about
6,300,000 farms. In 1997 (the latest year recorded by the US Census of
Agriculture) the number of farms dropped to 1,911,859. Today, 72% of the
subsidies go to less than 65,000 very wealthy farms, another 14% goes to
65,000 wealthy farmers and the remaining 14% is distributed to about 500,000
not wealthy farms. Meanwhile, almost two-thirds (1,300,000) of the total
number of US farms receive no crop subsidies (Environmental Working Group
Subsidy Data Base, 1995-2002).

Crop subsidies are de facto insurance programs that pay for a large portion
of the cost of production. Since they are insurance programs, farmers are
loath to grow a non-subsidized crop in rotation with cotton, corn or any
other subsidized crop. So, for example, farmers don¹t rotate their crops.
Instead, they plant cotton back to back for 25 or 30 years in a row. This
practice causes tremendous environmental damage, because it depletes the
soil of nutrients. It also contributes to a huge increase in damaging
insects, mites and diseases since there is no break in the insect cycle
which rotation enables. This causes farmers to use more chemical
fertilizers and pesticides, which further poisons the soil and the ground

The high concentration of acreage ownership in the hands of a relative few
farm corporations coupled with high subsidies and the reluctance to rotate
subsidized crops with other cash crops causes enormous overproduction. The
reason that high tonnages of US cotton, corn, soybeans and other commodities
are regularly exported by wealthy brokerage firms is because of this surplus
production. The subsidy system which helps promote over production was
created during the Nixon years. Nixon¹s secretary of agriculture was Earl
Butz. Butz and Nixon were worried (paranoid) about fluctuating production,
fluctuating price and world-wide demand for commodity crops. They
encouraged surplus production and created a taxpayer funded loan and subsidy
scheme to pay for it. Their view was that big is efficient, so farmers were
advised to get big or get out. Thus, it is no surprise that most of the
subsidies go to the biggest farms, since that was the plan.

The Butz-Nixon system of loans and government payments to promote surpluses
has been modified but continues to be a centerpiece of the farm bills.
Before Butz and Nixon changed the subsidy system, there were still about 3
million farms. In that 30 year period we have lost more than one million
farm operators, which averages out to about 650 a week (US Census Bureau).

While the surplus in cotton is caused largely by the current subsidy
program, the decline of the US garment industry over the last twenty years
has aggravated the problem of too much cotton production in the US. An
especially steep drop in mill capacity followed the passage of NAFTA in
1994. Before NAFTA and GATT the US mills consumed 12 million bales of
cotton and the US shipped out about 6 or 7 million. Currently, domestic
mill use is closer to 7 million but US growers have continued to produce
about the same amount of cotton. Consequently, the US ships out about 5
million more bales of subsidized cotton than it did before NAFTA (Cotton

At the same time that subsidies and exports were going up, import tariffs
and quotas were coming down. Consequently, the loss in US mill use comes
largely from uncontrolled imports of cheap clothing, more than 40% sewn by
NAFTA and Caribbean Basin Initiative (CBI) countries. The CBI is a
multilateral agreement between countries in the Caribbean Basin and the
United States (Cotton Grower, Analysis of the 2002 Farm Bill). A majority
of the remaining loss in mill use is spun and sewn in South East Asia and
China under different ³free² trade agreements.

The worldwide search for cheap labor certainly led to the movement of the US
garment industry off shore, but the surplus production and dumping of cheap
subsidized cotton by the cotton brokers and farmers just as certainly
enabled it. Ironically, without a strong garment industry we cannot
guarantee national emergency supplies in cotton or any other fibers. Who
will spin it, knit it, weave it or sew it? So, instead of protecting an
emergency resource (garments, tents, bedclothes) the cotton subsidies
currently work to rob us of domestic emergency supplies. The US, once a
major manufacturer of clothing is no longer a powerhouse. Levi Strauss,
once the largest US manufacturer of clothing, just announced that they were
closing the last of their remaining facilities in Canada and the United
States because they couldn¹t compete with foreign labor.

Cotton Subsidy Impacts in Other Countries

As we have seen, US subsidized surpluses have enabled brokers to dump cheap
cotton in foreign markets because NAFTA, CBI, WTO and other bilateral and
multilateral trade agreements urged the participating countries to relax
tariffs, subsidies and other trade restrictions. The relaxation of our
trade quotas and tariffs allowed the garment corporations to import even
more finished goods. The dumping and downward price manipulation caused
serious distress for cotton producers as the world prices for cotton were
ratcheted down to historic lows.

In India, low prices for cotton and high prices for chemicals have caused
tens of thousands of farmers to go bankrupt. As a result, there have been
more than 20,000 cotton farmer suicides since 1995. Additional thousands of
Indian farmers sold their kidneys into the world organ market to pay their
pesticide and fertilizer bill to Monsanto, Cargill or multinational banks
(Vandana Shiva, Speech to International Forum on Globalization Meeting in
Cancun, 9-10-2003). To get a perspective on this tragedy it might help to
remember that the number of cotton farmers who committed suicide in India
alone since 1995 is as great as the total number of US cotton farmers.
India¹s garment industry, which accounts for more than 30% of its industrial
capacity, also has been devastated by low world-wide garment prices, which
resulted largely from the record low cotton prices.

In Africa, several nations depend heavily on cotton for a majority of their
foreign exchange earnings. More than ten million people directly depend on
cotton exports for their livelihood. Mali, Benin, and Burkina Faso have
lost twice as much on the drop in cotton prices as they receive in US
foreign aid. This has driven more than 4% of each country¹s population into
abject poverty (Cultivating Poverty: US Cotton Subsidies and Africa, Kevin
Watkins, Oxfam, June, 2003).

More than a million Mexican farmers lost their land since the passage of
NAFTA and the subsequent dumping of surplus US corn, cotton, wheat and other
crops (according to Via Campesina and the Mexican farmers¹ organizing
committee). The dumping of subsidized corn and cotton into the Mexican
markets drove prices below the cost of production. Small farmers could not
compete and were driven out of business and off the land. The combination
of land loss and the peso crash following the passage of NAFTA has left a
very bitter taste in the mouths of Mexican campesinos and other consumers.
These animosities toward NAFTA and the WTO led to the participation of more
than ten thousand Mexican farmers and thousands of union workers in the
Cancun demonstrations. Additional tens of thousands of Mexican farmers,
activists and union members, who couldn¹t afford the long trip to Cancun,
took part in dozens of protests throughout Mexico during the week of the
trade meetings.

Cotton Subsidies and their Impacts on Environment and Health

The resource conservation goals of our subsidy program are regularly ignored
by the large scale cotton farmers. The lack of land stewardship by the
corporate farmers who dominate US cotton production is creating
environmental disasters that are subsidized by the taxpayers. Unfortunately,
the damage they are doing and the pollution they are causing will also have
to be cleaned up by the taxpayers.

Cotton is the most toxic crop in the world. Cotton uses more than
twenty-five percent of all the insecticides in the world and 12% of all the
pesticides. Yet cotton is farmed on only 3% of the world¹s farmland
(Organic Cotton, published by Pesticide Action Network-Pesticide Trust,
London, 2001).

In California, one of the only states where farmers are required to provide
pesticide use reports, 15 chemicals accounted for 77% of the pesticides used
on cotton from 1989 to 1998. Seven of the fifteen most used cotton
chemicals were probable cancer-causing pesticides, eight caused tumors and
five caused mutations. Twelve of the top fifteen pesticides caused birth
defects, ten caused multiple birth defects, and thirteen were toxic or very
toxic to fish or birds or both (California EPA, Department of Pesticide
Regulation, US EPA).

While pesticide use is downright scary, the use of highly toxic fertilizers
may be worse. On the average, seven times as many pounds of toxic
fertilizer are regularly used on cotton as are pesticides. Toxic fertilizers
and pesticides have fouled the air and polluted the rivers, groundwater
basins and aquifers wherever cotton is grown. Cotton chemicals have killed
and injured millions of fish, birds, and other wildlife as well as countless
thousands of rural residents from Bhopal India to Alabama¹s cancer alley,
from the San Joaquin Valley to the Aral Sea.

Besides its environmental toxicity, which is usually hidden from public
view, even fewer consumers are aware that cotton is at least twice as much
food as fiber. In the US, cottonseed accounts for about 60% of the harvest
tonnage, gin trash (leaves, fibers and twigs) 5% to 20%, and cotton fiber
only 30 to 35%,. Consequently, we eat or drink more cotton products than we
sleep on, wash with, or wear.

About 80% of all the cottonseed and almost all the gin trash go right into
your milk. About eight pounds of cottonseed is fed out to most dairy cows in
the US every day. Gin trash is also fed out or used as bedding for the
cows. The other 20% of the cottonseed is made into oil, meal and cake and
winds up in many different junk foods, from Lays Potato Chips to Carr¹s
Water Biscuits and Pepperidge Farm cookies.

About 70% of the cotton in the US is genetically modified and therefore
subsidized by the taxpayers. In addition to the genetically modified cotton
seed, the cows are also fed genetically modified corn and soybeans. Many
are also shot up with genetically modified bovine growth hormones. This
makes milk one of the most toxically produced and genetically modified
products. Since kids drink the bulk of the milk and a high proportion of
the junk food in the US, kids get the most poison in the smallest body as
well as being exposed to genetically modified bacteria, viruses, hormones
and antibodies.

Subsidy Winners and Losers

How about the farmers that the original subsidy system was supposed to
protect? How have they fared and on whom does this taxpayer money really
get spent? Clearly, the subsidies have not saved the million US farmers
who went bankrupt in the last thirty years. This continuous land loss has
resulted in a concentration of farmland in the hands of fewer very large
farming and banking corporations. In 1946 the average size of the US cotton
farm was 17 acres and there were more than a million cotton farmers. Today,
US cotton farms average over 1,000 acres, and there are only about 20,000
left (US Census Bureau). Most of the subsidies go to wealthy farm
industrialists like J.G. Boswell who owns 220,000 acres of farmland in
California, 60,000 in Arizona and 65,000 in Australia.

In spite of such obvious corporate rip-offs, policy analysts both inside and
outside the government, expound on theories of how the elimination of
subsidies to US farmers will not reduce the massive surpluses that are
driving world prices down and driving farmers out of business. Some argue
that if subsidies were removed, and prices climbed, growers in other
countries would grow more to replace the lost American cotton. Other
analysts argue that even with the elimination of US subsidies the price
increases world-wide would only be minimal. They estimate that corn would
increase only a nickel a bushel in 20 years and predict even smaller
increases for the other main commodities.

The analysts fail with all their models using the United States Department
of Agriculture (USDA) numbers to adequately explain how subsidized surpluses
since NAFTA and the 1996 Farm Bill could depress world prices by 40%, yet
their removal would only provide miniscule gains. Much of the problem has
to do with the USDA numbers and the analysts limited vision for change,
which is linked largely to technological progress in large scale farming.

The USDA¹s numbers, generated by the National Agricultural Statistical
Service (NASS) and the Economic Research Service (ERS) are often surveys
that the USDA can manipulate for the president who appointed the Secretary
of Agriculture. The USDA is notorious for faking statistics or failing to
provide the whole story as James Bovard illustrated in The Farm Fiasco

While working at the Sustainable Cotton Project we also noticed consistently
false federal data in our analyses of cotton statistics. We compared the
NASS California cotton pesticide data from 1989 to 1998 with California¹s
EPA use reports (recognized to be the most accurate pesticide data in the
world). We found that the NASS surveys only accounted for about half (53%)
of all the pesticides that the farmers claimed they used (Allen, Sotelo,
2003 MS. A comparison of the NASS Data on Cotton Pesticide Use in California
with the Cal EPA DPR¹s Pesticide Use Reports for 1989-1998). We feel that
these false statistics enabled the USDA and the Cotton Council to argue that
dangerous pesticide use was down
Not surprisingly, their data on subsidies also is understated. The
estimates from USDA farm service agencies on farm subsidies for the last
several years are only about one-half to two-thirds of the actual amount of
government payments to farmers and other corporations. The issue here is
transparency volunteer it.

The think tank numbers come from the model builders, who often uncritically
use off-the-shelf USDA data. Where most analyses of subsidies fall short,
however, is not just in the numbers game, it is in who gets the numbers.
Instead of taking the USDA statistics at face value and looking at only the
numbers the USDA chooses to release, researchers and analysts should be
demanding accuracy and more transparency in the USDA¹s numbers. For
example, the Environmental Working Group¹s (EWG) was able to get a much more
accurate and complete set of subsidy numbers from the USDA through a Freedom
of Information Act request. Their numbers provide more transparency and
show a very different picture than the published USDA statistics provide to
the public.

The EWG data illustrate that 86% of all government subsidies went to 20% of
the subsidized farmers from 1995 to 2002. But, those percentages only apply
to subsidized farmers and only 36% of the farmers receive all of the crop
subsidies. 64% of US farmers receive none. By revealing these facts, that
the USDA always knew, the percentages dramatically change for the worse. In
reality, only 3.6% of the US farmers received 72% of all the government
payments. The next 3.6% got 14%, which means that 7.2% of the farms received
86% of all the subsidy payments
Some of the farmers receiving the largest cotton subsidies for the period
1995 to 2002 were Tyler Farms, $24,380,994, J.G. Boswell, $10,371,756,
DueWest, $8,199,684, and Wolfsen Land and Cattle, $7,867,330. These are
billionaire and multimillionaire farmers who are getting the lion¹s share of
government payments from the taxpayer. These wealthy growers neither need
nor deserve subsidies for growing surplus cotton. Millions of people around
the world as well as farmers in this country are devastated by this
subsidized overproduction. They are demanding that the US government and
the US Farm Bureau stop pretending that all American farmers are going to be
equally impacted by the loss of subsidies. The EWG data shows how that
pretense is a lie.

Instead of the modelers' numbers game, the vast majority of US farmers, not
the millionaires and billionaires, need another numbers game. They need
real sustainable farming programs backed up by the large number of dollars
that are now going to the wealthiest farmers and corporations. Safe and
organic food markets are the burgeoning markets of the present and the
future, both domestically and in fair trade. Farmers around the world, and
especially those in the block of twenty-four nations boycotting the WTO,
want a different kind of agriculture. They want an end to poisonous
agriculture, they want a local agriculture, and they want to grow foods from
their cultural heritage for local customers and themselves. Most of them
don¹t want Wal Mart's, McDonald¹s or Monsanto's junk food or any other fast
foods grown with toxic chemicals or genetic manipulation. They see how our
population got obese from too much corn syrup, too much junk food with
cottonseed, too many hormones, too many antibiotics, too much processed
everything with little thought to quality or health. They see how our
farmers lost their farms.

Unfortunately, many farmers around the world have been sold a bill of goods
for the last one hundred years. "Buy chemicals, grow for the export
market", have been the mantras from corporate agriculture since the
beginning of the 20th Century. These advertising messages and government
programs to support them have almost destroyed family farming in the US.
These are the same messages now being pushed by the WTO on farmers all over
the world.

Sadly, since farmers have been inundated with propaganda about the need for
chemicals and the false promise of fat profits from export crops, many have
taken the bait and are now suffering the consequences as the US and other
multinational brokerage houses depress world prices and drive them into
bankruptcy and suicide. As a result of accepting the bait, many farmers
have stopped using old but productive practices and have neglected to learn
the newest techniques in organic and sustainable agriculture. But many are
anxious to learn and they need help.

In response to these environmental, economic and social crises, several
organizations around the world developed programs to help cotton farmers and
other growers reduce their use of poisons and to open up markets for organic
and environmentally friendly products. In the US, the organizations working
on cotton were the Texas Organic Farmers Co-op and the Sustainable Cotton
Project. Their promotional and technical efforts enabled more than 40,000
acres of US cotton to be grown organically and marketed by 1994 (15,000
acres in California alone). Growers were waiting in line to join these
programs. But, in 1994, NAFTA was passed, and by the next market season
organic cotton sales began to plummet in the US.

Most of the organic farmers were disgusted by the free trade agreements and
the deceptiveness and greed of companies like Nike, Patagonia, Norm
Thompson, Parkdale, Levi Strauss, Esprit, Gap, Adidas, Timberland and Vanity
Faire. Garment corporation executives who promised the US farmers in
face-to-face meetings that they would help clean up cotton communities
almost immediately shifted 90% of their purchases to cheaper producers off
shore after the trade barriers were lifted. But Nike did continue to buy a
bit of cotton from each region so that the corporation could claim that it
bought cotton from every organic cotton growing region of the US. While
this may have helped their image with the customers, it convinced the
growers that the only green in Nike¹s consciousness was in their bank

By 2002, there were less than 130 acres of cotton sold organically from
California and while farmers planted 9,000 acres in the US, less than 4000
acres were sold as certified organic. However, in spite of such disastrous
reversals, the farmers not bankrupted by NAFTA and corporate profit taking,
continue to be interested in reducing their use of chemicals. Many farmers
have remained in organic and IPM programs and some increased the amount of
acreage managed with these practices in cotton and other crops. The number
of growers in the SCP biological IPM program continues to increase because
it works and growers save money (Annual Report to CalFed, Sustainable Cotton
Project, 2002).

We think there are two reasons why increasing numbers of growers are ready
and anxious to make these changes. The first is money. Cotton growers in
California, found that organic insect and mite management in cotton was
actually $100 cheaper per acre than chemical pest management, with little or
no loss in yield and quality. Farmers all around the world have also
concluded that they don¹t need to use so many pesticides and chemical
fertilizers to get good yields. The second factor is fear. Many farmers in
the US and in industrialized countries are still afraid of losing chemicals
and yet they increasingly fear the damage chemicals do to their families and
their farmworkers. They are also afraid of their banker, and of losing the
farm on their watch. Consequently, many are still reluctant to change their
practices unless they can learn or contract for secure, safe and inexpensive
pest control and fertility strategies that their lender will support or that
they can learn to do without a lender.

What Can Be Done?

Where does this leave us in deciding what to do with the bloated farm
subsidies in the US? It leaves small farmers and farm advocates in a very
difficult place. While subsidies in the US are obviously helping the
farmers most who need it the least, the 14% of the subsidies that small
farmers receive help keep a quarter (almost five hundred thousand) of the US
farmers in business and on their land.

Consequently, in spite of the ugly nature of the existing subsidy system,
all subsidies should not be eliminated. However, they must be changed. We
should encourage the US and all countries to subsidize sustainable and
organic farming strategies, soil conservation programs, rural revitalization
efforts, local production for local use (to feed local populations), and
fair trade arrangements (but only where trade is essential).

These programs are not what the multinational food and chemical corporations
want. They are not what the rich farmers in the US, Europe and Japan want.
They are not what the subsidy bloated National Cotton Council wants. But,
these programs are what many farmers in the US and the EU want and what more
than 2 billion farmers around the world want. These reforms, however, are
not enough.

Subsidies must end to millionaire and billionaire farmers who poison the
land, poison the consumers and bankrupt small farmers and rural communities
in the US and around the world. Subsidies for the mega rich corporate
farmers should be immediately put on a fast track to sunset. We cannot be
content with a slow phase out because small farmers in the US and around the
world cannot afford more subsidized destruction and the dumping of crops
below the cost of production.

The Bush administration does not seem eager to attack the subsidy issue, the
National Cotton Council, and the other powerful commodity lobbies before the
election. Cotton is a $120 billion industry in the US and is our most
important agricultural commodity. The US cotton lobby regularly reminds our
elected officials of the power they possess because of it. A public outcry,
however, could help force Bush and all the other candidates to address the
subsidy problems during the election campaign. Sadly, the public is
ignorant of the true nature of the subsidy system that it pays for. If they
are to become aroused enough to cry out, they must be aroused and educated
by us about these taxpayer rip-offs that mask the real price of food and
fiber (since we pay once at the marketplace and again at tax time).

At the same time that US farmers and consumers are paralyzed by ignorance
and powerful political forces who want to retain the current subsidy system
at any cost, two thirds of the world's farmers (represented by the G-24
nations) refuse to agree to any WTO trade deals until the subsidy issue is
resolved boycotting nations at risk for other trade and policy issues. We think this
move and the changing climate of opinion about subsidies, even among
conservatives, provides farm and trade activists with an excellent
opportunity to dramatically change the existing system.

In a 2002 research paper for the Heritage Institute Ethan Baker and Brian
Reidl concluded that:
"If the goal of the nation's agricultural policy is truly to save the small
farm, Washington policy makers are badly missing their target."
"If low-income farms are to benefit from a new farm bill, the paradigm of
subsidy based agricultural legislation should be revisited and reformed."
"³The bottom line is that any continuation of existing subsidy programs will
not accomplish the goal of helping small farms."
". . .subsidy increases. . .only further exaggerate the uneven income
distribution that already exists and continue the vicious cycle of low
prices created by overproduction." (Largest Subsidies per Acre go to Wealthy
Cotton and Rice Growers, Jan. 23, 2002)

The World Bank also is critical of cotton subsidies. On July 15, 2002 they
alleged that:

"If the US alone cut subsidies to cotton farmers, worth 2.1 billion in 2001,
the World Bank estimates the cotton price would improve 12 cents a pound and
translate into revenue gains of $250 million a year for West and Central
African farmers." (Their estimate of 2.1 billion dollars is off by at least
one-third After the breakdown of the Cancun talks, World Bank president James
Wolfensohn in his address to the International Monetary Fund criticized rich
countries. He said the failure of the Cancun world trade talks is
symptomatic of a lack of delivery on pledges to developing countries. He
further stressed that:

"It is inconsistent to preach the benefits of free trade and then maintain
the highest subsidies and barriers for precisely those goods in which poor
countries have a comparative advantage" (Progressive Farmer, Sept. 29,

The conservative Heritage Foundation and the ultra conservative World Bank
have decided that subsidies must end to incredibly wealthy farmers. We
think that their shift in position on subsidies is an indicator of change at
the top presents us with an opportunity to debate and determine what kinds of
government programs are really needed to support the vast majority of
farmers, to guarantee the protection of natural resources and the long term
sustainability of agriculture in the US and around the world.

We urge US farmers, sustainable farming advocates, trade activists and other
concerned taxpayers interested in safe food and fair trade to seize this
opportunity to demand a radical reform of the farm subsidy system before the
next election. It's clear that the huge subsidies to the wealthiest farms
and corporations must end. It's also clear that we must develop national
programs that support the production of clean food and sustainable farming,
that expand local food production and distribution systems, that promote the
revitalization of rural America and that facilitate fair trade. Successful
models for such programs exist throughout the US and around the world.

The reforms that we desire must fit the family farmers¹ and the taxpayers'
needs, not the needs of the "free traders", the wealthy farmers or the World
Bank. We must also support the WTO boycott by international farmers. Their
resistance has provided us with the best opportunity to reform our farm
subsidy system in decades.

Sources Cited:
Allen, Will with Eric Sotelo, 2003 MS. A comparison of the NASS Data on
Cotton Pesticide
Use in California with the Cal EPA DPR¹s Pesticide Use Reports for
Baker, Ethan and Brian Reidl, Heritage Institute Research Paper: Largest
Subsidies per Acre go
to Wealthy Cotton and Rice Growers, Jan. 23, 2002
Bovard, James The Farm Fiasco, 1989.
California EPA, Department of Pesticide Regulation
Cotton Grower, Analysis of the 2002 Farm Bill
Cotton Council 2002 Update
Cotton Council International
Environmental Working Group Subsidy Data Base, 1995-2002
Economic Research Service (ERS)-USDA
Marquardt, Sandra, Organic Fiber Council Annual Report, 2002
National Agricultural Statistical Service (NASS)-USDA
Organic Cotton, published by Pesticide Action Network-Pesticide Trust,
London, 2001
US Census of Agriculture
Vandana Shiva, Speech to International Forum on Globalization Meeting in
Cancun, Sept.10,
Watkins, Kevin, Cultivating Poverty: US Cotton Subsidies and Africa, Oxfam,
June, 2003
Wolfenson, James: Speech to International Monetary Fund, Progressive Farmer,
Sept.29, 2003.

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