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Draft Paper – Not to be cited without author’s permission

Paul Nicholson, a leading European family farmer spokesman and a member of the International Coordinating Committee of Via Campesina,71 says that while this decision appears at first glance to be positive, coming as it did against the U.S., farmer organizations view it as a grave precedent. Farmers everywhere, North and South, need public sector budgets for agriculture and for rural development—subsidies, in other words—and the decision was so potentially broad as to permit attacks on all kinds of

subsidies, not enemy. Their

just ‘bad’ ones. merit depends on

The how

farmer position is much the subsidies

that subsidies per se cost, who gets them

are

not the

(see

Box 2,

p27), and

what they

corporate

producers

pay for. In the family in the North, leading

farmer view, subsidies paid only to dumping and the destruction

to of

large rural

livelihoods in the them on the land soil conservation,

Third World, are bad. But and to support vibrant rural the transition to sustainable

subsidies paid to family farmers to keep economies, and subsidies that assist with farming practices, and direct marketing to

72 local consumers, are good. The real enemy of farmers is prices—what farmers receive—continue to drop even while is consistent with the hypothesis that market concentration and large, as corporations wield their market power to buy dear to consumers.

low prices. And farm gate consumer prices rise, which is what keeps prices low by cheap from farmers and sell

A leading U.S. non-governmental organization, the Institute for Agriculture and Trade Policy (IATP), takes the position that while the ruling may be questionable, it may still be useful in bringing the issue of dumping to the fore:

“This case will not solve the problem of agricultural dumping, but it should jumpstart a discussion on how to lift prices paid to farmers, which would cut subsidies and stop dumping. Dumping is caused by over-supply. Farmers will overproduce when prices go down, and they'll over-produce whether they receive subsidies or not. This ruling begs for a comprehensive agricultural inventory management program to bring supply into balance with demand, and ensure farmers are paid a fair price." 73

In other words, the cotton ruling may not be the correct decision, but it most definitely highlights the need to go back to the drawing board on issues of farm policy and agricultural trade.

42

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