Senator Grassley knows full well that for the past few years, a full 30 per cent of maize grown in the US is grown not to feed people but to feed automobiles, for the very good reason that a good part of it is grown and refined in his very own home state of Iowa. The notion that withdrawing such a huge volume of land from food production could have any impact on the availability and affordability of food is clearly beyond the Senator’s grasp of basic economic theory. But then again, we are talking about a longstanding member of the Senate Agriculture Committee, the folks that only last year dreamed up a new $5 billion ‘permanent disaster aid program’ to give handouts to farmers in parts of the US where it never rains.

When he was Chair of the Senate Finance Committee, Grassley authored the massive tax breaks that began the ethanol boom. For those who are interested in economic analysis, biofuels are thought to be responsible for between 10 and 25 per cent of recent increases in food prices. The other drivers of price rices include a high oil price, bad harvests in several parts of the world, speculation in commodity markets by investors, decreasing government strategic food reserves and the increased consumption of livestock products in the growing middle classes of Asia and Latin America.

But back to the press briefing. As a performance, it’s a cross between the self-consciously folksy shtick of vintage era Donald Rumsfeld and the cringe-making, rabbit-in-the-headlights inanity of President Bush. In the video I’ve cut in a few choice passages from a rather different speech Grassley made at a New Baptist Covenant meeting at the Carter Center in Atlanta, Georgia, earlier in the year.

Listen to Senator Grassley’s infamous ‘Let them eat rice’ declaration in full

[audio:grassley_audio.mp3]

“I read about the riots over the price of food. It’s bread in Egypt and it’s rice in China, er, I mean Thailand, and maybe other places where they have some riots, but… I don’t see any… I saw a little bit of concern in Mexico maybe three months ago on tortidos. Is that what you call them, tortidos? [Aide: "Tortillas"] Tortillas. And er, and er, but, but, y’know, we don’t make, er, ethanol, out of rice and out of wheat. So I’m not sure that I understand except ignorance on the part of people about the connection between making ethanol and making, and, er, food. Because I could set a bucketful of corn in front of those people from the IMF or we could go where they’re compaining. And they wouldn’t know what to do with it. Any more than I would know what to do if an eskimo set a pale full of blubber in front of me. So, er, so I’m not very sympathetic toward it at this point. When they start getting a connection between corn and food, then I’ll be glad to listen. Part of our problem is that Chinese are going, er, to eat meat. And you’ve got to have corn and soybeans to feed the Chinese, their meat, then why isn’t it just as legitimate for the Chinese to go back and eat rice as it is for us to change our policy on corn to ethanol.”

Can this be the same Chuck Grassley who opined that “turning a blind eye and a deaf ear to world hunger exposes the selfish side of human nature.” With US corn at record highs of $6 a bushel, the selfish side of Chuck Grassley is very much exposed!

Here in the EU, politicians are falling over themselves to recant on any earlier backing of food-for-fuel policies. But for as long as selfish, hypocritical, pork barrel merchants like Chuck Grassley are driving the policy, the US will continue marching down this most crooked of roads that is doing so much harm to world’s poorest people and to the environment.

Of the three remaining candidates to be the next US President, only one has a record of opposing ethanol boosterism: John McCain. The Washington Post recently reported on a physical altercation between Grassley and McCain, though this was NOT over ethanol subsidies. It did lead the pair to be on non-speaking terms for two years, though it is said that they have subsequently patched things up. I’m told that Democrat front-runner Barack Obama has well and truly drunk the biofuels kool aid while Hillary Clinton is just desperate to woo farm state super-delegates as she battles to stay in the race for the Democratic nomination.

If changing EU policy on biofuels feels like turning around a supertanker, changing US policy is more akin to pushing an avalanche back up the mountain.

Expressing her own preference for regional average payments, she said that it would be up to member states to choose for themselves:

“As you know, there’s a section in the Health Check communication about flattening out the single farm payments that different farmers receive – in other words, reducing the differences between these payments. And I know that this has set a few alarm bells ringing in Ireland. Let me reassure you: this section of the Health Check is nothing to worry about. If you still want the ‘historical’ model of the Single Payment Scheme, you can still have the historical model.”

In the historic entitlement system, a farmer’s entitlements depend on the value of subsidies paid in the reference period, which is the average of 2000-2002. This can lead to striking differences between farms that are growing exactly the same crops or raising the same livestock because they are were different back in the reference period. Fischer Boel said she thought this was increasingly hard to justify:

“I think that, in the years to come, the public will find it hard to understand why Farmer X is paid more each year than Farmer Y just because of production decisions that he took 10 years earlier – or perhaps, because of decisions taken by his predecessor!”

It should be stressed that none of this would have any bearing on the huge differences in entitlements between member states. Calculations based on Commission figures on direct payments and agricultural area in 2006 are illustrative of the huge disparities. And they call it a common agricultural policy?

[TABLE=8]

Sources:

(1) The agricultural situation in the European Union (2006)
(2) EU budget 2006 – Financial Report

“The CAP has been reformed beyond all recognition with a final break between subsidies and production so that farmers increasingly decide on what to produce according to the market, not government diktat. The CAP reforms ensure that farms no longer get more subsidy for more production, but instead get money based on their historic payments and environmental stewardship. As a result they decide on what to produce according to the market price.”

“Moreover the farm budget has fallen from more than three quarters of the EU budget in the seventies to less than half now. If this is ‘unreformed’ Mr Osborne is living in a dream world of Europhobic nonsense detached from the realities of rural Britain.”

Huhn is right. The CAP has changed beyond recognition since the bad old days of butter mountains and wine lakes, and it is misleading to claim otherwise. What Huhne did not mention is that George Osborne, now an MP and right hand man to the new Conservative Party leader David Cameron, ought to know better. Osborne once served in the UK Government as special adviser to Douglas Hogg, the hapless Tory agriculture minister who presided over the latter stages of the BSE or ‘mad cow’ disease epidemic. Hogg was often to be seen losing his temper in TV studios or stomping from the Ministry of Agriculture over to the Houses of Parliament sporting a frankly rather bizarre dark brown fedora.

While he avoided making the mistakes of his predecessor John Gummer who sought to demonstrate the safety of British beef by force-feeding his young daughter with a hamburger, Hogg did little to win the confidence of British farmers and shoppers and was ineffective in his dealings with his European counterparts at the Agriculture Council. With George Osborne as a policy adviser, is it any wonder that Hogg made such a pig’s ear of the job?

A couple of weeks ago Michael Pollan, a New York Times journalist and professor at UC Berkeley – my own alma mater – held an evening ‘teach in’ on some of the high profile issues surrounding the farm bill: subsidies, nutrition, the future of family farming, organics. Ken Cook, President of the EWG, gave a brilliant presentation and thanks to the miracle of high definition webcasting, you can watch it too. (Ken starts at around the 50 minute mark). Ken demonstrates the inequity and unfairness of federal farm subsidies and also takes on the growing suspicion about ‘industrial organic’ farming by arguing that for most of America, the problem is not ‘big organic’ but ‘no organic’. A particularly priceless moment is when Ken gets the 700 members of the audience to chant in unison, “I am a farm bill loser” while holding their hands in front of their foreheads, teenager style. Ken is on top form and as ever, his talk is as entertaining as it is informative. Enjoy!

If you want to follow the debate in the US, there’s no better place to start than Keith Good’s daily roundup of farm policy news, over at FarmPolicy.com. And if you want more Ken Cook (and how could you not?), he maintains a blog at MulchBlog.com.

As for the health check itself, she gave her support to the following:

- More decoupling, particularly in those member states like France, Spain and Greece that have retained as much production-linked support as was possible under the rules.
- Abolition of set aside as it makes no sense in an era of decoupled payments.
- Raising the level of compulsory modulation, though she said she was a firm opponent of voluntary modulation.
- Excluding farms of less than 0.3 hectares from the subsidy system. She said that the CAP did not exist to “support the goat in the garden”.
- A strong hint that milk quotas are unlikely to persist beyond the current expiration date of 2015.

Looking ahead to the CAP beyond 2013 and the budget review of 2008/09 she said that payments to farmers would likely remain, though full decoupling would be necessary. In the Doha Development Agenda talks at the WTO, the EU has already pledged to end agricultural export subsidies by 2013 and Fischer Boel said that there will be a hard look at whether other market interventions should be phased out as well.

Read her speech in full.