The Bush administration is caught in the midst of an inevitable dilemma. It has to lead the drive to integrate the US economy into the world economy and he has to do this under conditions which advance the interests of global capital, and particularly speculative capital. The current instability within the Republican Party is an expression of these profound changes. The fight over US farm policy is illustrative of the growing contradictions between the objective necessity to advance the interests of the transnational corporations – whose interests are intimately intertwined with speculative capital – and a section of the political base of the Republican Party.
Agribusiness, like every other industry, is in the process of profound transformation as it is restructured to compete on a global level, both at home and in the world. In its proposal to cut farm subsidies by 60% in exchange for opening markets to US agricultural produce the Bush administration is advancing the interests of the global agribusiness corporations such as Cargill and Monsanto. The contradiction is that he has to attack his own base to do it.
The agricultural sector has undergone profound changes in the last twenty to thirty years. From a system of small family farms, agricultural production has been transformed into a continuum of large corporate farms and cooperatives and a handful of mega transnationals which dominate the global food market. The small family farm hardly exists any longer, and if it does can barely compete with these agribusiness giants. Over the last twenty years, these entities have become tied together into an increasingly consolidated system of food production and distribution under the domination of the big transnationals. The corporate farms are increasingly tied to the transnational or multinationals through production contracts and various operating agreements, and the transnationals themselves enter into various joint operating agreements, partnerships and contracts to achieve their ends. What is evolving then is one mega global food chain from seed to table, vertically integrated and horizontally connected.
The push to cut farm subsidies is not simply a response to international pressure, or the demands of the WTO “rounds” but an attempt to maximize the position of US based agribusiness transnationals and further integrate the global economy. These corporations are involved in a range of interests beyond simply food production. They also own large financial services and operate huge worldwide transportation systems. Subsidies are less important to them than markets.
Farm subsidies are to a great degree straight corporate welfare. Billions of dollars are given to about 22,000 farms who qualify who grow the 8 crops covered under the program or are eligible for one of the other types of programs. But farm subsidies are a crucial political tool as well. Farm subsides are concentrated in the huge wheat and corn belts of the Upper Midwest, Texas, Iowa, Nebraska and Illinois, along the cotton belt of the Mississippi river delta, and to slightly lesser degree throughout the Black Belt South. While Texas, Illinois and Iowa are the three largest recipients at $12 - 10 billion between 1995 and 2004, the largest individual amounts of subsidies are given to Mississippi Delta cotton farms and corporate farms throughout the South. This reflects the importance of the South in the political equation of the ruling class, and particularly the special role of the Southern black belt elite. As most of these states vote Republican, farm subsidies have helped to underwrite the political support necessary to advance the political program of global capital under the Bush Administration and the uneasy coalition of forces who back him.
Certainly, the overall effect will be the further consolidation of US agriculture under the domination of transnational agribusiness. Medium to small farms that rely on subsidies would probably go bankrupt or be bought out by larger farms and the families forced into tenancy or unemployment. A cut in subsidies may force the larger or corporate farms into the transnational food chain who are not integrated into to it already, although the larger farms are in a better position to ride out the ups and downs of the market. In turn, the overall region will be effected as farms are consolidated, fewer people have a means of making a living, and the overall ripple effect of that makes it felt in the local and regional economies of the nation.
Bush’s proposals provoked an outcry from a section of agribusiness and a wave of resistance from their powerful representatives. In defiance of the president, Georgia Senator Saxby Chambliss piloted a proposal through Congress to extend the subsidies to 2011, four years beyond when the existing farm bill is up for reconsideration. Chambliss, Thad Cochran and other farm belt and southern senators led the way in voting down Bush’s proposal to cap farm subsidies. Both of these have undermined the work of Bush’s trade representative in his negotiations for the WTO meeting in December. These politicians have been made powerful through their ability to deliver big corporate welfare check to agribusiness. Their political futures will be effected, and it is they who will have to answer at a local and regional level for their party leadership. The cuts will effect their base, even if some of that base are able to prosper.
Political compromises may have to be made, as well as stopgap subsidy like payments to make the transition more palatable, but whether now or later, subsidies in all their forms will have to be dealt with in order to more fully integrate and foster transnational US based agribusiness dominance in the world. This is only going to cause more political instability and debate as individual companies and capitalists scramble to protect their interests. Adding to this is the further growth of the new class and the ongoing exposure of the bankruptcy of capitalist rule. As a class, however, the capitalists have to take steps that will enable them to drive deeper into the world’s economies, creating more instability, opening up opportunities as well as dangers for the revolutionary process.
February.2006.Vol16.Ed2
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