Al Gore, The Farmer's New Hero
Gore's Surprising Advocacy Of Freer Farm Trade Makes Him A Champion Of American Farmers
February 16, 1999
by Dennis T. Avery
CHURCHVILLE, Va.—Vice President Al Gore has just announced a surprisingly strong American challenge to Europe's farm subsidies.
Gore says the Clinton administration will demand major reductions in the world's farm trade barriers and an end to Europe's export dumping when the World Trade Organization convenes new farm trade talks later this year.
Gore has thus made himself a genuine hero to the price-battered farmers of America—and to farm-exporting countries from Australia to Zimbabwe.
To make sure we didn't miss the point, he said, "I am especially hopeful that these trade talks will raise living standards for the world's farmers and ranchers." It's no coincidence, of course, that the 2000 presidential campaign starts with caucuses in the farm state of Iowa.
GORE'S RECENT announcement, in front of the World Economic Forum in Davos, Switzerland, makes him the only major world politician to advocate a fundamental, structural solution to the world's farm and food problems.
The rest of the political crowd has been offering cosmetic measures, such as Congress' $6 billion handout to crop farmers before last fall's congressional elections.
U.S. effectiveness at the upcoming WTO talks has been in serious doubt because of congressional reluctance to give the Clinton White House "fast- track" negotiating authority, which would give U.S. diplomats authority to negotiate a treaty the Senate could not alter but would simply vote up or down.
Gore's own commitment to farm trade has been in question, too. He has strong ties to U.S. labor unions, and Big Labor has used opposition to free trade and the supposed "export of U.S. jobs" as its rallying cry.
That's why fast-track has repeatedly failed over the past two years.
Gore also has strong ties to the environmental movement, and the "greens" have been opposed to farm trade in particular. They don't see it as a way to supply Asia's food gap without cutting tropical forest, but rather as unleashing "industrial" farming on poor peasant farmers.
THE VICE PRESIDENT'S strong support of farm trade could be an important plus for global farm liberalization.
But first he and the Clinton administration must back it up with a concrete proposal that will engage the European Union, and also gain fast- track authority for U.S. negotiators at the WTO trade table. Those two problems could stall the Gore initiative at the talking stage.
If Gore pursues a farm trade-only mandate, he has nothing to offer the Europeans in the investment or services sectors to claim as a victory in exchange for cuts in their farm subsidies.
If Gore tries for a broader trade agreement, his chances of success with the Europeans are better. But that would put him in a head-on collision with Big Labor's anti-free trade position.
The best hope for the Gore position may be Western Europe's own growing internal conflict over farm subsidies. The EU is set to take in several Eastern European neighbors as buffers against Russian adventurism.
The new members are likely to double the number of EU farmers, and increase its total farmland by about 50 percent.
WITH THE EU's Common Agricultural Policy already costing $150 billion per year and the new Eastern members broke, it is unlikely the EU can bear the cost of preserving high EU farm prices.
Nor do the EU's high price supports offer much future hope for the commercial farmers of its current member countries. The real subsidy windfall went to the EU farmers of the 1960s, when the high price supports went into effect.
Today's EU farmers have had to buy high-priced land and quotas to quality for subsidies—and under the EU's Agenda 2000, the price supports are mandated to decline and the export subsidies to shrink.
Some EU farmers already see a better future in ending the CAP with "golden parachute" payments like the ones U.S. farmers got as part of the Federal Agricultural Improvement and Reform Act of 1996. WTO farm trade liberalization would let European farmers help supply the rising diet aspirations of Asia's densely populated countries.
THE NETHERLANDS, Belgium and Denmark are all seeking farm export growth. Both Sweden and Great Britain would like to free themselves from the farm subsidy burden.
France is split, with a big export potential for its commercial farmers, but with many small farmers who want payments. It may be that only Germany and Italy are still fully committed to the current EU farm policy.
Meanwhile, closed markets for farm exports have contributed significantly to the world's depressed farm prices. Experts say world farm prices would rise sharply if tariffs were lowered and export subsidies cut off.
The world's farm tariffs currently average 40 percent (where trade in farm commodities is allowed at alll) while the average tariff o manufactured goods has been cut to 4 percent.
Consumers in China and India are still upgrading their diets despite the "Asian collapse," but those countries aren't allowing much in the way of farm imports.
FOOD PRICES are high because local costs are high. Free farm trade could help stimulate economic growth by lowering the cost of living.
Both India and China know they must be members of the World Trade Organization to get economic growth from manufactured exports. That's the modern path to affluence. If the WTO liberalizes its farm trade rules, Asian countries will allow farm imports despite opposition from their farm lobbies.
The biggest benefits of the Gore proposal would go to farmers in such exporting countries as the United States, Argentina and France; consumers in countries with high food costs, such as China; and wildlife where wildlands are threatened by the expansion of low-yield farming.
Gore clearly has the recipe for a global alliance among farmers, conservationists and consumers. Can he turn it into reality?
Dennis T. Avery is based in Churchville, VA, and is director of the Hudson Institute's Center for Global Food Issues.