Tuesday, March 18, 2008

Other farmers, other farm bills...

While Congress and the Administration have been furiously not producing a farm bill, similar campaigns are churning away around the globe.

For example, in India, the big issue is farm debt forgiveness.
The government will give cash in compensation to banks writing off loans under the Rs 60,000-crore debt relief package for farmers, but the payment will be staggered over four financial years, Finance Minister P Chidambaram said on Friday.

The loan waiver, the biggest takeaway from Budget 2008-09, raised many eyebrows, especially on questions relating to funding of the plan, but the finance minister insisted he would divulge the details only when Parliament discussed the issue.

Starting July, Chidambaram told Lok Sabha, the lenders will be given Rs 25,000 crore in next 12 months. The rest will be paid in following years — Rs 15,000 crore in 2009-10, Rs 12,000 crore in 2010-11 and Rs 8,000 crore in 2011-12.

He said the government would raise the money by tapping the buoyancy in tax revenue, proceeds from royalties, dividends and other non-tax earnings including a possible offloading of shares of state-owned companies in the stock market. [More]
In familiar arguments, critics point out the government effort will not help all, or perhaps even most of those in greatest need.
Over the next few days, while experts debated the efficacy of the staggering relief package, 60 farmers killed themselves, adding to a morbid official statistic: more than 150,000 Indian farmers committed suicide since 1997 unable to repay crop loans.

Though the crisis has been building for years, it presents a grave challenge for Prime Minister Manmohan Singh ahead of national polls next year. Farm distress and soaring prices helped turf out the previous government in 2004 and put Singh in power.

So, Singh's government came up with a plan in the 2008-09 budget: cancel debts of small farmers with loans overdue on Dec. 31, 2007, and which remained unpaid up to Feb. 29.

The write-off came with riders. Beneficiaries can own up to two hectares (five acres) and only bank loans will be cancelled.

This has meant nearly a quarter of 40 million targeted farmers will not benefit because most borrowed from rapacious moneylenders or they own larger tracts of land. [More]
Given the human toll the farm problems are taking in India, it is perhaps unsurprising Doha compromises are not the highest priority of the Indian government.

Meanwhile, EU ag ministers seem to be edging their way toward reform that has eluded us here in America.
Some of the more controversial elements of the plan, in effect a mini-reform, include diverting direct subsidies into projects designed to improve the countryside, and reducing handouts to larger farms according to their income bracket.
While Fischer Boel has yet to publish the details of the proposed health check, they have been circulating in Brussels in draft form -- so her thinking is well known.
EU farm ministers mostly welcomed the principles of many of those reform ideas on Monday and will be presented with Fischer Boel's formal plan at an informal meeting in Slovenia in May.
However, the real debate is only just beginning and no deal is likely until at least November when France, by far the largest beneficiary of CAP spending, will be EU president.
"It was clear that all member states had their own shopping lists. But we are all in the same shop," Fischer Boel told a news conference, speaking after ministers backed broad political conclusions aimed to start the farm reform negotiations. "The strong commitment from member states means that we have to finalise our compromise (deal) in November," she said. [More]
The implications of Europe reining in payments to large farms is significant, as US farmers always point across the Atlantic to prove they are not the worst offenders of farm payments. Such an outcome would leave only the handful of lavishy subsidized Japanese rice farmers to be "not as bad as".

The whole world seems restless and less amiable to past farm policies. Increasing food prices may exacerbate this frustration with the perceived value received from farm payments. As interlinked as the rest of our economies are now, I think keeping an eye on developments overseas may help predict the outcome (if any) here.

1 comment:

Blubberball57 said...

I may be a 100 miles from the point here John, but it sounds like they want to push out the farming on the land so developers can come in with their strip malls, townhouses, condos, country clubs and subdivisions. Investors should have taken their money out of Bear Stearn's an dumped it into Wal-Mart, they are good at this. I believe they are trying to put one at every intersection.
If farmers here were treated like the Japanese Rice Farmers...don't ya know there would be a recall proceeding going on for some one's office.
The EU may be just lighting a fire that may get out of control there, pack the wieners and marshmallows.
Bit typin slow here, one of my typin fingerz has a splinter in in, and the other got hit by a hammer so my ability is down 50%. But my bow string salute works fine when needed.