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For poor developing country farmers and their advocates, the farm bill that passed the House of Representatives on Friday could hardly be worse news. Dissatisfaction with existing farm legislation is widespread and, with commodity prices high, it seemed as though a real opportunity existed to both reform America's costly and inequitable farm policy and give the stalled Doha Round of trade negotiations a boost. But those hopes have been at least temporarily dashed. (See Washington Postarticle and House Committee on Agriculture website for more on House passage of the farm bill.)
Reform seems like a no-brainer, since more than half of all American farmers, mostly those growing fruits and vegetables, do not receive traditional subsidies, and 70 percent of payments go to just 10 percent of farm operations. Of the $10 billion in payments for specific commodities in 2004, 60 percent went to just two crops--corn ($4.5 billion) and cotton ($1.6 billion). But rather than reform this discriminatory and inequitable system, legislators preferred to buy off selected critics by adding a few dollars to nutrition and conservation programs, while piling on more trade-distorting subsidies for wheat and other grains, soybeans, and sugar.
From an international perspective, the majority in the House did not just miss an opportunity for reform, they thumbed their nose at our trading partners, especially the poorest. The House farm bill provides increased support to cotton and sugar, two products of particular interest to African exporters, and it blithely ignores a World Trade Organization ruling that certain subsidies violate U.S. commitments. Such cavalier treatment of legally binding international obligations undermines the already dim prospect for completing the Doha Round. It also invites new challenges to U.S. policies in the WTO, which could result in retaliation against U.S. exporters. Brazil and Canada have already filed new WTO complaints against U.S. farm policies and final passage of the House would invite even more, while making the U.S. case even harder to defend. It is now up to the Senate to salvage both common sense for American farmers and taxpayers, and what is left of America's reputation in the world.
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.
Senator Bob Corker (R-TN) and Representative Ed Royce (R-CA) have teamed up with Democratic colleagues Senator Chris Coons (D-DE) and Representative Earl Blumenauer (D-OR) to introduce new legislation that would reform US international food aid to deliver more help to more people in crisis, faster.
As donors gather next week in Rome to pledge funds to the International Fund for Agriculture Development , they may be wondering where the United States is. Given the generally high marks this independent fund earns for development effectiveness, the uncertainty around a US pledge is troubling. In this “America First” moment, it’s worth asking when it comes to IFAD, what’s in it for the United States and what will be lost if the United States drops out?