The farm bill President Bush signed this week will help thousands of American farmers and ranchers avoid bankruptcy. It will maintain all Americans' access to the lowest-cost, highest-quality supply of food and fiber in the world.
Most people who oppose federal assistance to farm programs do not realize it is common practice for governments around the world to provide such aid to their agricultural sectors. U.S. spending on farm programs is small compared to outlays by the European Union and other nations with whom we compete in the international arena.
Reducing or eliminating farm subsidies may be a worthwhile objective in a global context. But it is not in the best interest of American citizens for the United States to reduce or eliminate farm assistance unilaterally.
To do so would be tantamount to allowing the treasuries of foreign governments to destroy U.S. agricultural enterprises while leaving our citizens as dependent on foreign food and fiber as we are on foreign oil. How can any thoughtful person believe this would be good for America?
The World Trade Organization is the appropriate forum for negotiating reductions or elimination of agricultural subsidies. I firmly believe that if subsidies were eliminated globally, U.S. farmers and ranchers would be sufficiently competitive to remain viable.
But it is poor strategy, whether the issue is agriculture or national defense, to negotiate from weakness. It makes no more sense for the United States to eliminate farm programs unilaterally and then call on the rest of the world to follow suit than to disarm unilaterally and expect other nations to follow our lead. It will not happen.
The ability of America's farmers and ranchers to compete in a global market has been substantially hampered by the failure of the international community to maintain some semblance of equilibrium in currency exchange rates. Since Congress passed the last farm bill in 1995, the value of the dollar has risen by more than 40 percent in relation to most Asian currencies.
This significant shift in exchange rates substantially alters production costs and prices for American goods versus those of our foreign competitors. As a result, U.S. agriculture and manufacturing have found it increasingly difficult to compete.
Since exchange rates are off the table for WTO discussions, our only alternative is to deal with the consequences of a strong dollar. The new farm bill is one useful tool for doing this.
Agriculture remains an important component of the U.S. economy. In Tennessee, Mississippi, Arkansas and Missouri, cotton alone provides some 52,000 jobs and contributes about $7.84 billion a year to the region's economy.
Maintaining this economic activity benefits all citizens of the Mid-South, not just farmers.