Criticizing farm program all depends on critic
Jan 22, 2005 12:00 PM, Harry Cline
When University of California economist Dan Sumner became a hired gun for the Brazilian government in Brazil's World Trade Organization unfair trade case against the American cotton industry, everyone wanted his scalp.
Yet when the former president of the National Cotton Council and one of the most powerful cotton merchants in the world, Memphis cotton merchant Billy Dunavant Jr. says he does not support the current federal farm bill before a largest annual National Cotton Council gathering, no one said a word.
For 19 years Dunavant has offered his economic analysis of the world cotton situation before the Beltwide Cotton Conferences. He did it for the final time this year at Beltwide in New Orleans. He is retiring in July as president of Dunavant Enterprises.
Dunavant Enterprises has operations in the U.S., Mexico, Zambia, Tajikistan, and Australia as well as offices in Europe, Asia, South America, Africa and Australia.
Dunavant said the Step 2 federal market enhancement program is keeping U.S. cotton in the world marketplace, yet he says the federal farm program is out of step with economic reality. He said there is no economic justification for a federal cotton farm program that allows U.S. cotton growers to make more money when prices are low than when prices are high.
“I do not blame the West Africans, the Brazilians and the Australians for raising hell about our farm programs,” Dunavant told a packed house at Beltwide.
While he expressed disdain for the U.S. farm program, he offered his unqualified support for the National Cotton Council, which wants to tar and feather Sumner for hiring on with the Brazilian government. Critics say what Sumner did was nothing short of treason. They are still trying to get him fired from UC.
Cotton politics can be a bit bizarre.
When Sumner made his economic analysis of the federal cotton program available to the Brazilians, it was argued that he had a right to disagree with the program — but do it in private or directly to USDA.
Dunavant, like Sumner, has a right to offer his opinion about the farm program. However, it is a bit bewildering when the most powerful American cotton merchant makes it so public. If the Brazilians need more ammunition for their case against the U.S., Dunavant certainly gives it to them. The former president of the National Cotton Council and a long time adviser to the NCC board even carries more weight than an UC economist.
Of course Dunavant and Sumner as individuals are only two voices — albeit powerful ones — in the debate over government support for the American cotton industry.
The program does not make good economic sense when you can make more money when prices are low than when prices are high, but that is not the point. American cotton producers are not competing on a level playing field in the world market for several reasons. Basically costs are lower virtually everywhere else in the world. Dunavant knows that because he does business in the very countries that are American agriculture's biggest critics.
The federal farm program is not about making economic sense, but about the survival of the American cotton industry and American agriculture.
It continually amazes that we have not learned from the demise of the domestic oil industry. America is now dependent on unstable third world countries for energy supplies and yet everyone seems hell bent to lead America down the same path to worldwide dependence for our food and fiber. That is absolutely frightening. Talk about making no sense.
e-mail: hcline@primediabusiness.com
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