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Jewish World Review
August 31, 2006
/ 7 Elul, 5766
Obama goes to Africa, defends American protectionism
"Village beats the drums for returning son."
This Kenyan newspaper headline greeted Sen. Barack Obama, D-Ill., as he arrived, rock-star-like, in that country. Obama, whose father was Kenyan, waved at thousands who stood in line in Nairobi to cheer him on. One Kenyan, after shaking Obama's hand, said, "He's our lion." Another said, "He will help us." After all, how often does the son of a Kenyan get elected to the U.S. Senate?
Obama's father, also named Barack Obama, once herded goats in Kenya. He won a scholarship to a Hawaiian university, where he met and married Obama's mother, a white woman from Kansas. Obama and his father had a difficult relationship, and barely knew each other. His parents separated soon after marriage, and Obama's father returned to Kenya, working as a government economist until his death in 1982.
On his four-nation tour, Sen. Obama to highlight the tragedy of AIDS in Africa planned to take an AIDS test. He criticized Zimbabwe President Robert Mugabe, whose forced land redistribution caused that nation to plummet into poverty and starvation. Obama even properly attacked Kenyan corruption. "If the people cannot trust their government," said Obama, "to do the job for which it exists to protect them and promote their common welfare then all else is lost. That is why the struggle of corruption is one of the great struggles of our time."
But a reporter raised an issue about which Obama possesses more influence dealing with American protectionism that hurts Kenyan farmers. Why, asked the reporter, do Americans retain farm subsidies and tariffs that prevent Kenyan farmers from competing in the world's biggest market?
Obama's response? He talked about the soybean farmers in Illinois, and said, "It's important to me to be sure I'm looking out for their interests. It's part of my job." Absolutely incredible.
For, in July, the European Union and five nations, including the United States and Japan, met in Geneva, Switzerland, to discuss the elimination of farm subsidies and agricultural tariffs. After all, in 2002, the World Bank estimated that African exports would increase by almost $2.5 billion if the U.S., Europe, Japan and Canada eliminated their agricultural tariffs. This is especially true as to peanuts and tobacco. African farmers run up against farmers in wealthy nations whose laws ensure their success at the expense of Third World farmers.
What should Obama have said? "You're right. America is a rich nation. You are a poor one. Poor nations generally turn into rich ones by starting out with agriculture. So when I get back to Washington, I'm going to tell my colleagues about the devastating real-world effect American protectionism has on poor nations."
Overall, the Organisation for Economic Co-operation and Development says that European farmers get 35 percent of their income from subsidies! American farmers get almost 21 percent. The organization estimates that subsidies cost "rich nation" consumers about $1 billion a day.
But don't American subsidies go to "poor" mom-and-pop farm operations? No, they don't. According to the National Center for Policy Analysis (NCPA), farmers with incomes of more than $250,000 a year the top 10 percent of subsidy recipients receive more than 72 percent of all farm subsidies. The bottom 80 percent of farmers receive approximately $64 a month.
Protectionism, or tariffs on incoming goods, protects farmers. Payments to farmers, both directly and indirectly, enable American farmers to charge an artificially low price. After all, the farmers receive taxpayer dollars on the "front end," enabling them to lower prices on the "back end." The government, in 2004, gave farmers $5.3 billion in fixed direct payments. So-called counter-cyclical payments money given to farmers if the price of goods falls "too low" equaled $3.6 billion between 2002 and 2004. Farmers also received $9.1 billion in 2004 marketing assistance loans, enabling a farmer to use his crops as collateral. What if the farmer does not produce enough to repay the loan? Well, the government allows the farmer to forfeit the crop loan cancelled.
Government also subsidizes crop insurance and "sells" water to farmers at up to 90 percent below fair-market value. According to the NCPA, subsidies and import tariffs on sugar, for example, mean Americans pay three times what they would otherwise pay for sugar.
When politicians defend this corporate welfare, their eyes well up and their voices crack with emotion as they talk about "saving the family farm." But who cared about saving the family hamburger stand from the onslaught of McDonald's, Wendy's, Burger King and others? Never mind that greater efficiencies rather than unfair competition sparked the decline of the "family farm," just as hamburger franchises and the Wal-Marts of the world compete against the mom-and-pops. We call it capitalism.
The reporter in Kenya gave Obama an opportunity. The senator, in addition to attacking corruption, could have talked about transparent governments, respect for the rights of religious and ethnic minorities, and the critical importance of free markets. One Kenyan, when asked to explain Africans' enthusiasm for Obama, said, "Call it the donor mentality."
Indeed, Sen. Obama seemed more interested in a hand-out, rather than a hand-up.
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© 2006, Creators Syndicate