May 13, 2010

US farmers are bailed out, Indian farmers are left to die

Amidst the raging debate on the farm suicide toll in India comes this interesting report about the huge agricultural subsidies being doled out to the US farmers. In India, nearly 200,000 farmers have taken the fatal route to escape the humiliation that comes along with growing indebtedness (in the absence of direct income support) between 1997 and 2008.

The US has paid a quarter of a trillion as farm subsidies in almost the same period, between 1995 and 2009. Farmers not only get "direct support", they also receive the benefit of "counter-cyclic payments", "market loss payments" and now subsidies under the crop insurance programme and the bio-fuel programme. No wonder, while Indian farmers take to gallows, US farmers (I am talking of the big farmers/Corporate firms) quietly proceed on a cruise holiday every year.  

The report "Government's Continued Bailout for Corporate Agriculture" http://bit.ly/accyi0  published by Environmental Working Group (EWG) endorses what is being said in this column time and again. Let us look at some of the salient findings:

1. US paid a quarter of a trillion in farm subsidies between 1995 and 2009.

2. Direct payments have averaged around $ 5 billion every year since 2005.

3. Subsidies under the crop insurance programme have tripled -- from $ 2.7 billion in 2005 to $ 7.3 billion in 2009.

4. Since 1995, crop insurance subsidies have crossed $ 35 billion.

5. Between 1995 and 2009, the richest 10 per cent of the farm families pocketed 74 per cent of the entire subsidy. 

6. On an average, the wealthiest 10 per cent received a total payment of $ 445,127 in the past 15 years.

7. Small farmers received an average of $ 8,862 per recepient in the same period. 

Now this should be some form of an eyeopener. After all, when we tell Indian farmers to increase productivity (and I see this being the usual refrain among agricultural scientists, agribusiness companies and parliamentarians) I fail to understand how enhancing crop yields would increase farm income. I have often asked this question to senior scientists and economists, who unfortunately have no idea of the political economy that determines farm wealth in the OECD countries.

They tend to believe that farmers in US/Europe are rich because they have high productivity. To my understanding, this is the primary reason why Indian farmers continue to suffer. They have been misled to believe that the higher their crop productivity, the more will be their income. In the US, farmers are surviving because of direct income support (in various forms) and not because of the 'farm-to-fork' kind of market operations.

The US knows the cost of feeding the loss-making farms is much more than what is normally spent on importing food. But it still is willing to take that risk knowing that food self-sufficiency is fundamental to national sovereignty. In fact, it goes a step ahead. It is making an all out effort (along with the EU) to be the food bowl of the globe. The more the world depends upon US/EU for food, the more will be the political dominance of these two blocks over the entire world.

Read the commentary by EWG president Ken Cook at http://bit.ly/bGv93C

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