FERGUSON: A government success story

January 24, 2014 

Because I’ve reached the age where I think there’s never any good music on the radio I’ve been listening to more news and talk stations lately, mainly National Public Radio. I know NPR has a reputation for being pretty left wing and a lot of its reporting does seem to come down to why taxpayers need to give more money to people who don’t have jobs, but they also sometimes cover stories that are a little off the beaten path that I don’t hear anywhere else.

Not long ago they had a short piece on how the U.S. government has had some issues with the World Trade Organization regarding its subsidizing of American cotton farmers that I found interesting and I did some further research on it. As I learned the details I decided this was a story that I needed to share with the good folks who read my column.

Giving tax money to farmers is a cherished tradition in our country. The goods that farmers produce tend to be pretty critical natural resources that we’d have a hard time living without, so when it comes time for government to redistribute some wealth, farmers are always near the front of the line. We can’t have corn farmers going out of business because they had a bad year or see the price of milk double overnight because long-standing price supports suddenly go away. The agriculture industry is important to most every state in the Union and they have a great deal of power in Congress.

They also like to sell their goods overseas sometimes, too, and government subsidies help with that as well. If the government is cutting a farmer a check every month, he can afford to sell his goods cheaper in foreign markets, undercutting competitors from other countries.

We’ve been boosting the profits of cotton farmers in this manner for many years, forking over billions of taxpayer dollars to help them market their wares at low prices on the world market. It’s a great system, but there is one problem -- it’s against the law.

More specifically, the subsidies are a direct violation of free trade agreements we have signed with other countries. And cotton farmers in other parts of the world are understandably less enthusiastic about the subsidy system that allows American cotton to price them out of the market.

Cotton farmers in Brazil brought a case against the U.S. to the World Trade Organization on this matter -- and they won. The U.S. appealed -- and we lost again. As it turns out though, the WTO has no way to enforce its decisions if member countries refuse to play by the rules they’ve agreed to. So Brazil had to try another approach.

They threatened to retaliate with trade sanctions against the U.S. that would hurt other American industries that export goods to Brazil. Congress found itself in a pickle -- industries that would be hurt by the Brazilian sanctions were demanding action, but cotton farmers were not about to give up their benefits quietly. What to do?

U.S. negotiators were sent to Brazil to seek a solution. They told the Brazilians that the cotton subsidies were part of a multiyear farm bill that could not be repealed until it had run its course. But they had a proposal. We aren’t inclined to follow the terms of the trade agreement we signed, our representatives told them, but how about a bribe? Would $147 million a year make you feel OK about the situation? The stunned Brazilians said they could live with that.

That’s right, dear readers, in order to keep handing over billions of your tax dollars to cotton farmers in the U.S., we have also paid hundreds of millions of dollars to Brazilian cotton farmers so they would look the other way as we violated a free trade agreement we signed up for.

I submit the preceding tale to all the naysayers who contend that our government can’t get things done anymore. Feel free to open or roll down the nearest window and yell “USA! USA!” until the overwhelming sense of pride in your elected representatives subsides.

Bill Ferguson is a resident of Centerville. Readers can write him at fergcolumn@hotmail.com or visit his blog at nscsense.blogspot.com.

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