Archive | October 18, 2011

Food Week Post 3: Subsidies, Sugar and Slavery

Sugar costs money. In fact, everything that’s bad for you in the American diet is heavily subsidized by the United States Government. A few large scale producers of sugars, oils, grains and other commodity crops receive huge payouts from the federal government to produce what they do.

Proponents of subsidies point to issues of food security, the protection of rural economies, and broader benefits of the low cost of food in the United States as justification for spending nearly half of one percent of the entire federal budget on direct payouts to American farmers. The truth is that the United States is one of the most food secure areas of the planet, that urban economies receive the largest benefit from food subsidies and that subsidies really work to keep producers of BAD food like Frito-Lay and McDonalds financially well fed.

Source: USDA Economic Research Service

While the proponents of subsidies, who often have deep interests in large agri-business, point to the poor, struggling American farmer as justification for continued subsidies, the truth is that the economy of agriculture couldn’t be healthier. The mean income of a farming operation was close to $90,000 last year, far beyond the national average/ Overall revenues from farming at an historical high. The farming sector is expected to pull in more than $100 billion in revenue this year, $31 billion more than 2010. A 24% increase!

Most family owned small farms are struggling and actually lose money on their farming operations. However, the bulk of farming is now done by large agricultural conglomerates, beholden not to Grandma and Grandpa but to urban elites and global stock-holders. These groups have a vested interest in continuing subsidy payments because it increases the health of it’s stock holdings. However, they don’t like to spread the subsidies around to people like my local struggling organic vegetable farm.

These subsidies have global implications. While right-wing blowhards in the US tout neo-classical ideas of “free-markets,” “small government” and “open competition,” the US government’s massive subsidies of agricultural commodities actually do what said blowhards say is a bad idea. The subsidies artificially depresses world commodity prices, giving the United States a competitive advantage on the world market.

The small country of Benin depends on cotton for 80% of its exports, which amount to a little over a billion dollars. A modest one percent decrease in the world price of cotton barely registers on the American economy. A one percent decrease in world cotton price has disastrous implications for a country like Benin, whose tiny GDP is only $6.4 billion or $1500 per capita. It has been estimated that US farm subsidies cost small cotton producing West African countries more than $250 million every year, $250 million dollars that could have been invested in schools, health care, power and communication infrastructure, and domestic industries. In essense, developing countries pay, in both lost revenues and human health, to beef up the stock portfolios of investors in big-Ag.

This isn’t even the worst of it. The sugar industry of Florida notoriously imports labor from Jamaica to assist in the grueling annual sugar cane harvest. For the privelege of cutting sugar cane all day, workers are rewarded a little as $2 per hour and must suffer under prison like conditions. These were most famously document in the fantastic 1990 documentary work of Stephanie Black, “H2 Worker.” Conditions may or may not have improved, to my knowledge they may have not. How could a business model used for the past 500 years change overnight? Slavery and the sugar industry built the United States; we won’t let go of it so easily.

The health of this criminal industry depends on massive subsidies from the US Government, who will happily turn a blind eye to the reprehensible conditions that workers slave under. Worse yet, as in interview with the late progressive Jamaican Prime Minister Michael Manley reveals, these subsidies prevent Jamaica (or even Haiti) from successfully developing its own sugar industry, thereby robbing a struggling country of a chance to lift itself out of poverty.

All of the large agricultural conglomerates that have headquarters in the United States such as Cargill, Bunge, Monsanto and Archer Daniels, and the beneficiaries of continued agricultural subsidy programs are internationally owned conglomerates that operate throughout the globe. Thus, in addition to the massive negative worldwide implications of commodity subsidies I just mentioned, the question of political sovereignty must also be addressed. Lost in neo-liberal right wing discussions is the role of international bodies in determining United States domestic policy. To me, the very idea of sovereign states in the 21st century is but an illusion and passports really just serve as protectionist labor schemes. Worse yet, democracy itself is called into question, when the money of the worldwide elite are able to shape US policy to serve its own narrow goals.

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