CAFTA and Big Ag

I like the concept of free trade, so in general, I like the idea of a Central American Free Trade Agreement. I have to confess, though, I don't know as much about it as I should.

One thing I read was that Central American farmers are concerned that subsidized exports from the U.S. would drive them out of business. Source. That was surprising. I knew we subsidize crops like peanuts, but I didn't know the extent to which we subsidize agriculture in the U.S.

I knew it was kind of a problem -- Third World counties want to export stuff (like agricultural produce) to First World countries. It's about the only thing they have (besides maybe minerals), but they run into barriers like import quotas. They can't work themselves out of Third World-ness because farmers here don't want us to buy their produce.

It turns out there's more to it -- they can't sell their stuff to other countries, either, because our subsidized goods are cheaper than their non-subsidized stuff. Take cotton, for example. Americans spent $264 million dollars in 2004 to help cotton manufacturers who ended up exporting 40 percent of their market. Source. The biggest cotton subsidy recipient was Allenberg Cotton Company of Tennessee, which received almost $35 million last year, and $186 million since 1995. According to their website, they export two-thirds of their production.

When someone says "farmer," I think of a little guy trying to make a living for his family. I can understand disaster relief subsidies for people like that. But by Allenberg's own admission, it's "a global organization buying, warehousing and selling 'White Gold.'" Source. Do we really need to subsidize these guys? (For more information about how cotton farming works in the U.S., look here.)

It's just one aspect of CAFTA, but it doesn't seem to be the kind of free trade agreement I'd been thinking of. I guess I have a lot more to learn about the relationship between Big Agriculture and free trade.