Cotton fleece

MUCHENJE, Zambia - Each square foot of Lemmy Hamufuba's 8.5-acre cotton farm can be measured in needs: school fees for five of his seven children. Vegetable oil. Soap. One more mosquito net to fend off malaria. In January, a month after planting, the Zambian farmer's tender cotton seedlings were thriving, happy portents of a healthy harvest this year.

Even so, the best price Mr. Hamufuba can get for his crop will not be the fairest. For years world cotton prices have been artificially low, depressed by government-funded overproduction in the United States. Overall, the United States provides some of the heftiest farm subsidies in the West, part of the runaway spending that has become a hallmark of the Bush administration. But this case is more than a taxpayer headache: U.S. wastefulness is causing want beyond our borders.

Now President Bush aims to slash such spending, with farm subsidies facing a pruning in his 2006 budget. The proposed caps on farmer pay-outs could save $8 billion over the next decade, says Heritage Foundation expert Brian Riedl. He dubs the subsidies the nation's "largest corporate welfare program."

In 2001, for example, two-thirds of farm subsidies went to just 10 percent of the nation's farms. Most of them earn more than $250,000 a year. The subsidies ballooned further when Congress passed a six-year, $180-billion farm bill in 2002, the largest in U.S. history. They were part of a trend of protectionist policies that is nudging the United States out of the top economically free nations in the world, even as once-socialist countries are opening up.

These are abstract arguments for Mr. Hamufuba, who sees only what he can eke out of his roughly $850 a year for his family. Across the verdant expanse of his fields in Muchenje, about 25 miles from Zambia's capital of Lusaka, Mr. Hamufuba's wife and older daughters were cultivating their inches-high cotton seedlings. "Life here in Zambia in homes, in villages is very difficult," he told WORLD. "If you don't have something [extra] to sell like chickens, like cows, you've got a very big problem. For now, this rainy season, what can you say?"

By peasant farmer standards he is doing relatively well: Half of his income comes from being a cottonseed distributor to other farmers, from whom he earns commissions. He also dabbles in bee-keeping and banana-growing. Behind his main house-about 15 feet by 10 feet-he tends about 10 head of cattle in a wood-fence pen for his uncle. For the latest planting season, he was able to hitch two oxen to a knotted wooden yoke to work his cotton fields. Before he had the animals, he pulled his paint-chipped plow by hand.

By contrast, American commercial cotton farmers have modern gadgetry to till their soil. Machines seed and harvest, global positioning systems show how much fertilizer to sprinkle in different areas of land, and farmers work in air-conditioned tractors. About $3 billion in subsidies a year supports only 25,000 of them, concentrated in states such as Texas, California, and Mississippi. Overall farm subsidies support only five crops: cotton, corn, soybeans, rice, and wheat. The nation's other 400 crops, says Mr. Riedl, receive next to nothing.

"Farm policy is based on the premise that a surplus of crops has lowered crop prices too far and farmers need subsidies to recover lost income," said Mr. Riedl. "However, the federal government's remedy is to offer subsidies that increase as a farmer plants more crops. This creates greater crop surpluses, driving prices down even further and spurring demands for even greater subsidies. Then, after paying some farmers to grow more crops, the conservation programs pay other farmers to grow fewer crops. These policies contradict each other and make no sense."

U.S. cotton subsidies took a hit from the World Trade Organization last year, the first time the body has ruled against a member country for its agricultural policies. The ruling came after Brazil filed a complaint in 2003, charging that more than $12 billion in payments to American farmers between 1999 and 2003 had distorted competition and lowered world prices by 13 percent. The United States appealed the decision last October and a final decision is still pending.

Oxfam International, an advocacy group for poor nations, estimates that in 2001 sub-Saharan Africa lost $305 million in income because of U.S. cotton subsidies. Those in the continent's biggest cotton producers are worst hit, in the West and Central African countries of Benin, Burkina Faso, Mali, and Chad. In their case, cotton accounts for 60 percent of exports. But their export losses in cotton outstrip the U.S. aid they receive.

If the federal government really wants to help poor rural America, Mr. Riedl suggests, it would cost just $4 billion a year to support each full-time farmer at 185 percent of the federal poverty line (about $32,600 for a family of four in 2001). Still, it is wealthy commercial farmers and agri-businesses who were able to pressure Congress to extend the 1996 farm bill, and pad it with more pay-outs.

"In 2002, Senate leaders identified farmers as the swing voters who would decide control of the Senate," said Mr. Riedl. "The ensuing bipartisan bidding war resulted in the most expensive farm bill in American history."

Paying out farm subsidies is hypocritical for the United States, which always encourages developing countries to create free-market economies, says American University economist George Ayittey. But he distinguishes subsidy woes from Africa's chronic food shortages. "There has been a general tendency, on the part of African leaders, to overplay the external factors, perhaps to provide justification for more food aid or to shift responsibility away from their own failed policies," he said. "If the agricultural sector were on a strong basis to begin with, it would have recovered quickly from an externally induced shock."

Even with enough blame to go around for Africa's poverty, cutting U.S. subsidies would help the continent support itself instead of relying on handouts. Mr. Hamufuba put his family's needs at a modest $1,000 a year. He looked at his settlement and saw things he would like to improve soon. One thatched roof-"a fire hazard"-he said, grinning, will have to go in favor of metal roof sheeting. He is careful with the tools of his livelihood, sheltering 100-pound bags of cotton fertilizer in one house, and hanging his pesticide sprayer in a dusky corner of another.

He built his second house because it is cultural taboo for his second wife to live under the same roof as his first, who died of malaria four years ago. He did not have the money to take his first wife to the local hospital immediately, and she died after 10 days there.

"A lot of death here is because of poorness," he said. "We cannot do things urgently. If they refer you to the hospital, you have to start borrowing money. Also the disease gets worse, and after two to three days, one dies." But, he said, a sudden smile breaking across his face, "God blessed me again. I got another wife."

Trade and aid

More than two months after Asia's tsunami, talk has turned away from emergency aid to rebuilding. The estimated price tag is as big as the wave: $10 billion to $12 billion over the next three to five years.

Looking at the long run, economist Eric Schansberg detected some irony. The Indiana University Southeast professor noted that Americans were generous in sending money for the tsunami's victims-his own Kentucky church collected more than $700,000. At the same time, he also found that countries such as Sri Lanka pay steep tariffs on the products they export to the United States. Such duties could hinder their reconstruction work, and several have already asked the United States to lower or remove them.

In 2003, for example, Sri Lanka paid $244 million in tariffs for garments and textiles it exports to the United States. According to Oxfam International, an advocacy group for poor countries, the clothing industry accounts for more than half the island's export income and provides 350,000 jobs. Indonesia also paid a tidy sum, $426 million.

"It's like telling welfare people who are working, you should not sell your products," Mr. Schansberg said. "In the case of the tsunami victims, if we're rendering aid, why not look at trade as well?"

As with farm subsidies, however, U.S. industries are reluctant to lose their market share to low-cost foreign producers. Thailand lost almost a third of its shrimp hatcheries along its coastline, which supplied more than half the country's shrimps. But U.S. shrimpers are afraid cheap Thai shrimp-along with other Asian suppliers-will drive them out of business. The United States is considering lifting tariffs after the tsunami, but good intentions stand to be washed away by special interest groups.