As the US Congress heads into final negotiations over the farm bill, hope the elected officials pay attention to the headlines: Brazil has scored yet another huge victory at the WTO over America’s cotton subsidies; Mexico is likely to file a complaint with the global body over how we subsidise rice farmers; Canada may do the same over corn payments.

This is a troubling pattern, and there’s a good chance America will lose more and more cases unless Congress makes changes in the farm bill, which expired last month. Washington simply must stop subsidising farmers the way it does or risk reversing course on a half-century of steadily expanding trade opportunities.

For years, I took them myself for my corn and soybean farm. Other industries received payments and tax breaks — why shouldn’t I? In addition, I spent 14 years as the head of the American Farm Bureau, the leading farmers’ lobby and a prime player in the creation of the subsidy system.

In the 1990s, however, a trip to New Zealand made me realise that eliminating subsidies was not just a free-market fantasy, but rather a policy that could work in an advanced industrial nation. New Zealanders had stopped subsidising their farmers, cold turkey, in 1984. The transition was controversial and not without its rough spots, yet it succeeded.

Today, it’s obvious that the Americans need to transform their public support for farmers. Many of their current subsidies inhibit trade because of their link to commodity prices. These practices hurt poor farmers in the developing world who find themselves struggling to compete. It’s one of the reasons why the WTO won’t let these practices stand.

The alternative is to put off the inevitable and risk a series of trade wars. When the US loses a WTO case, its aggrieved trading partners gain the right to retaliate through punitive tariffs on many American-made products, not just agriculture.

Politicians are fond of sticking out their chests and declaring that America’s farm policies will be written in Washington, not Geneva. The US Congress is getting in the way. It appears reluctant to approve bilateral agreements with Colombia, Panama and South Korea. With the Doha round of global trade talks having screeched to a halt, these accords are now the primary means for expanding export opportunities.

As for the farm bill, the answer isn’t necessarily to get out of the subsidy business entirely (although it’s preferable). The WTO permits certain types of subsidies. The European Union spends substantially more public money on farmers per acre than the Americans do, but its methods of payment are more compatible with global rules because they’re based on acreage and production history rather than on current crop production and prices. This makes them less disruptive to international markets.

Congress can change the farm bill to meet global rules while serving its public interests of a secure food supply, rural economic development and a cleaner environment. If it doesn’t, it will reap us nothing more than a long losing streak at the World Trade organisation.

NYT