John Block Reports from Washington

Adopt this proposal and U.S. farmers will be able to "sell their commodities in every comer of the earth without being undercut by subsidized competition or blocked by high tariffs." -- the words of U.S. Secretary of Agriculture Dan Glickman. The proposal was formally presented to the World Trade Organization the last day of June.

The plan would set a ceiling on government support for farmers and phase down over time. The objective is to systematically wean farmers from government support all over the world. Don't look for the Europeans to jump at the idea. The European farmers are receiving 114 billion dollars of support which is equal to 50% of their total production. The Japanese and South Koreans won't jump for joy. They receive 60 billion dollars which represents 74 percent of their production. The U.S. Congress won't be excited by this plan unless the other developed countries buy-in. U.S. farmer support totaled 54 billion dollars in 1999, some 24 percent of our ag production.

The farmer supports to be phased out would be only those supports that distort trade. Deciding which programs distort trade versus those that do not is not so easy. Probably most programs distort trade.

In the long run, ideally speaking, the American farmer should benefit from such a plan because in a free and open market we are more competitive. Also, farmers in developing countries should find more customers for their products since the world would not be flooded with excess subsidized production. My only caution is "Don't hold your breath! Won't happen anytime soon."