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US’s killer subsidies & India’s suicide farms

American tax payers have shelled out $245.2 billion in farm subsidies during 1995-2009, which works out to an average of $15 billion or Rs75,000 crore per year.

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Even as India’s policymakers remain in denial about the sheer magnitude of farmer distress in the country — over 2,00,000 farmers have committed suicide between 1997 and 2008 — US Department of Agriculture (USDA) data reveals that the US doled out a quarter of a trillion dollars or a staggering Rs12,50,000 crore in farm subsidies in roughly the same period, between 1995 and 2009.

According to the report on US federal subsidy published by the Environment Working Group (EWG), a Washington-based research organisation, American tax payers have shelled out $245.2 billion in farm subsidies during 1995-2009, which works out to an average of $15 billion or Rs75,000 crore per year.

While India imported about eight million bales of cheap American cotton between 1997 and 2004, crushing the local cotton markets and pushing small farmers out of the game, in roughly the same period (1995-2008), in Maharashtra alone, more than 40,000 farmers, (mostly cotton growers in Vidarbha) killed themselves.    

The EGW study comes at a time when US lawmakers have begun hearings on a new farm bill that would reauthorise US agriculture-subsidy programs when the 2008 legislation expires in 2013.
Richest farmers got most money

During 1995-2009, the richest 10% of farm families received 74% of all farm subsidies, with an average total payment over 15 years of $ 445,127 per recipient. The bottom 80 percent received an average of $8,682 per recipient. The EGW numbers are based on the USDA data compiled through public records and Freedom of Information Act requests.

The US subsidies flow to a favoured few crops as well as a favoured few farmers. Over 70 percent ($170 billion over 15 years) of farm subsidies supported the production of just five crops: cotton, corn, wheat, rice and soybean.

Growers of corn, the biggest US crop, with a 2009 value of $48.6 billion, received the most subsidies: $4 billion. Cotton, the fifth-most valuable crop there, was subsidised to the tune of $2.27 billion, followed by wheat, the fourth-biggest crop, at $2.23 billion, behind soybeans and hay.

The report exposes the West’s hypocrisy on farm and food subsidies, vindicating the stance of the developing countries at the WTO negotiations. With the Indian agriculture establishment forging a strategic partnership with the US agriculture industry on farm technology (from seeds to mechanisation), the EGW report comes as a warning on how expensive American agriculture is and the costs successive governments have been paying the farmers there to sustain energy-intensive industrial agriculture.

Even as the American public is questioning its lawmakers on the huge subsidy bill, the US lobbyists, who have reacted to the EWG report with caution, say the subsidies are a must to sustain and keep alive the farmers, and maintain their hegemony in global food exports.

Bloomberg quoted the democratic representative Earl Pomeroy as saying that the EWG’s research is sensational but shoddy. But it is good to remember that Pomeroy is the only House member from North Dakota, whose constituents last year received nearly $421.9 million in farm subsidies — the most of any district in the country. “The family farmers I represent have their extraordinary financial risks offset by a farm program that helps when production fails or when prices collapse,” said Pomeroy.
Doles despite rising farm incomes

The EGW found that of the 1.8 million farmers in the US (of a little over 2 million total registered farms in that country) who received the aid between 2003 and 2006, over 2,700 had adjusted gross incomes of more than $2.5 million.

While some of the sitting senators are among the top recipients, the list also includes a co-owner of an unnamed sports team who pocketed $200,000 a year, and some wealthy residents of the UK, Saudi Arabia, and Hong Kong — people generally not eligible for US handouts. In all, these millionaires enriched themselves to the tune of $49 million in taxpayer money.

The agricultural industry, with 1,200 registered lobbyists in Washington, spends about $133 million a year to make sure the money keeps flowing.

The EGW says the doles were given despite good farm income over the last five years, taxing the taxpayers battling severe recession. The US Department of Agriculture has projected a rise in US farm incomes of 12 percent in 2010-2011, after a decade that produced the five highest years for farm income ever. The EGW found that, despite these mammoth subsidies, the vast majority of farmers do not benefit from federal farm subsidy programs.

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