Trade talks seen as give-and-take

Global trade talks designed to halt subsidy payments to American farmers while lifting tariffs in other countries could be a positive, albeit risky, move for Washington and Idaho wheat farmers.

The World Trade Organization’s 147 member nations recently agreed upon a framework that restarts negotiations after last year’s calamitous meeting in Cancun, when sharp divisions between developing and rich countries stalled talks. The dissent was led by Brazil and India, which blamed subsidies in the United States and Europe for a global food glut that suppresses prices.

Though still in their infancy, the trade talks could lead to a day when farmers give up their government subsidies to sell more grain into developing nations, where millions of people are subsistence farmers.

Tom Mick, CEO of the Washington Wheat Commission, said the talks centered “on the utopian thought that maybe we can get out there and establish a level playing field for our farmers.”

While ending farmer subsidies in the name of fair-market competition sounds good, Mick said the path there is long and arduous. More trade talks will occur later this year.

The National Farmers Union said it was disappointed with the WTO agreement reached last week.

The group that usually backs Democrats in the Midwest called the framework agreement a sacrifice by American farmers and predicted it would drive down prices for crops such as soybeans, wheat and corn.

“The WTO framework will perpetuate a never-ending race to the bottom in producer commodity prices, pitting farmer against farmer and country against country for the one commodity all humans must have – food,” the NFU said in a release.

Wheat farmers in Washington receive subsidies and export 85 percent to 90 percent of their crop.

According to federal statistics compiled by the Environmental Working Group, Washington farmers collected $215.7 million in federal subsidies in 2002. The figure included conservation payments, money to offset low grain prices and special market-loss payments to apple growers.

Washington ranked 22nd among the states in subsidy payments to farmers.

Idaho ranked 26th, with $165.4 million paid to farmers.

The subsidies act as a financial safety net for farmers, many of whom claim they would go out of business without the money.

The WTO talks would slow down those payments, Mick said, as long as other countries agreed to allow U.S. farmers to sell grain without facing tariffs or other price distorting tools designed to make American grain more expensive.

U.S. Wheat, an exporting and marketing arm of the American wheat industry, called the WTO agreement a good step.

The trade group was pleased with language addressing so-called state trading monopolies, such as those in Canada and Australia, that Washington farmers blame for underwriting farmer losses in those countries.

Yet, Mick said he was worried about language affecting credit sales. Often, the U.S. extends credit to developing nations that wish to buy American grain. Limiting sales of grain on credit would take away a key bargaining advantage enjoyed by the U.S. wheat industry, he said.