Action Alert from Bread for the World

Congress Must Reform the Farm Bill

Call your representative and senators in Congress and urge broad reform of the U.S. farm bill.

Action

You may have already heard about the very important Farm Bill which (among other things) gives millions in subsides to very large farmers in the US and very little to the struggling small farmers. What's more, the large subsidies are an incentive for over production, which is then dumped on the international market at prices poor farmers around the globe are unable to match, throwing millions of already poor families into desperate hunger.

By July 17, please dial toll-free —which will connect you to the Capitol switchboard—and ask to be connected to your representative's office in order to leave your message. Call back and do the same for your senators.

Main Message

• Tell them the status quo on farm policy is not good enough.
• Urge them to ensure that the farm bill that comes to the House and Senate floors includes:

o Reform of commodity policies that hurt U.S. farmers of modest means and make it harder for farmers in poor countries to feed their families.

o Increased food stamp benefits so that U.S. families can afford a healthy diet.

o More investment in rural development, especially resources targeted to the U.S. communities in greatest need.

If your representative or senators are not on the Agriculture Committee (you can find out at www.bread.org), encourage them to talk with their colleagues on the Agriculture Committee and House and Senate leadership to see that these changes are made.

Why?

• We have reached a critical point in this year's Offering of Letters. The House and Senate Agriculture Committees intend to take up the farm bill in July. Our responses will need to come quickly as the bill takes shape in the committee, moves to the House floor and begins to move in the Senate.
• Every member of the House and Senate has a stake in the farm bill—not just members of the Agriculture Commit­tee. But so far, the House committee has signaled its reluctance to reform the farm bill. (The Agriculture Chair in the Senate plans to take up the bill in July.)
• We know that reform is crucial to struggling farmers and rural families in the United States, and to hungry people here and around the world. Your congressional representatives need to hear from constituents that improving this bill is critical.

• In particular, the commodities section of the farm bill should correct our current payments structure, which con­centrates payments in the hands of relatively few, relatively affluent people. Some who receive large payments do not actually farm. The farm bill should also change policies that distort trade, because they make it more difficult for farmers in poor countries to sell their crops and feed their families.
• Pushing for change in the farm bill is one of Bread for the World's most ambitious and challenging—and most important—campaigns. Progress has been very encouraging: there have already been many promising conversations with members of Congress. Editorials in major media have called for reform. You have moved the debate this far —now let's ensure that Congress passes the reforms we are seeking.

Want To Do More?

• Write a letter to the editor of your local paper. For help, contact Shawnda Hines, shines@bread.org.
• Ask five of your friends to call their members of Congress.
• If you would like to receive email updates, go to www.bread.org and click on “newsletter signup.” There you can join a Quickline (to be notified by email when there is an urgent legislative action involving your member of Congress) and register for Fresh Bread (our biweekly email update on what’s happening in Washington with hunger issues.)
• Visit www.bread.org to learn about other ways to help reform the farm bill, or contact your Bread for the World regional organizer.

Debt Vultures

Most people who would be reading this blog know something of the awful debt crisis that has been crippling the development of dozens of countries and the world for generations. Recently a new chapter in their suffering has evolved that is new low of evil.

It seems that a number of international funds have been buying up the old devalued debts of a number of countries and then suing them in court for their full price. Here is an example. Zambia, one of the poorest countries in the world had an old loan from Romania for about $15 million. Since Zambia is too poor to make regular payments on it, over the years it was devalued to less than $3 million. At that point, back in 1999, Donegal International Ltd, a US owned company registered in the British Virgin Islands bought the old loan from Romania, and then sat on it for several years. Last year at the meeting of the group of eight wealthy industrialized countries, a deal was made to cancel $42 million of Zambia’s old debts owed to specific countries. It was cause for great celebration because freeing up that much money meant that schools could be reopened and medicines for malaria and AIDS could be purchased. However, not long after, Donegal sued Zambia in British court for all of the back money, plus fees, plus penalties. The total they claimed was (not surprisingly) was almost exactly the amount that Zambia was set to save after the cancellation of its debts. That is why these funds are called “Vultures.” The courts wrote it down to $15 million, but that is still more than five times what Zambia had owed on them.

Here’s an even more interesting story. The Democratic Republic of Congo is another African country that had a number of its debts canceled last year. Soon afterward Paul Singer, the head of Elliott Associates, bought up old, worthless bonds owed by Congo for about $10 million and then sued and won $127 in a US court. Along with other law suits, he expects to eventually win over $400 million from the Congo.

According to US law, President Bush could reverse the decision under the doctrine of “comity,” which gives the president the right to end a speculator’s seizure of a debtor’s funds if it violates US foreign policy, which this certainly does. Several faith groups and other non-profits have petitioned the president to do just that, and several court cases have been held up waiting to receive a note from the President halting the collections actions. Representative John Conyers once questioned the president about it and was assured by him that he would take care of it within the week. That was in February 2007, but so far he’s been silent. Why?

There’s no way of knowing exactly why President Bush has remained eerily quiet on helping out Congo, especially since what Paul Singer has done clearly violates US foreign policy. But it is interesting to note that Paul Singer has also given a total of $1.6 million to Mr. Bush’s two presidential campaigns, $10 million to Rudolph Giuliani’s campaigns, and $1.3 million to various other Republican campaigns, including a substantial portion of the infamously dishonest “Swift Boat” campaign against John Kerry. Whether or not Mr. Bush would do something as immoral as protecting a campaign contributor at the expense of millions of hungry people in the Congo is anybody's guess, but it's worth noting in passing nonetheless.

You can do something to help out debt-stricken Congo without waiting for the President to act. Jubilee USA, the interfaith debt campaign has introduced a “JUBILEE Act" in Congress that calls for the cancellation of US held loans to some fifty-five countries, improve the lending practices of banks and countries, and condemns the practices of vulture funds like these. You can help by calling your Congressional representatives and encouraging them to support this act.

Endless Poverty in Africa

There are regions of intense poverty all over the world, but Africa remains the poorest continent anywhere. Three quarters of its people are at the bottom of the bottom.

What causes that? Here are just a few of the more obvious causes. In a future podcast we will talk about some of the new solutions being discussed.

One is the extreme debt trap that so many of Africa’s countries have fallen into. For example, the US gives $3.6 billion to Sub-Saharan Africa per year, but the region pays that much back to US banks and international lending institutions (such as the World Bank) about every ten days. There’s no way that a government, good or bad, that could ever develop its economy and lift its people under that much ancient debt.

Second are a combination of weak governments and strong elites. I don’t mean that some do not have strong dictators. But the government structures are weak and often controlled by economic elites. Their governments are structured to help a small circle of elites and are a bureaucratic nightmare for foreign investments and trade.

Most countries have abundant natural resources, and under some forms of governance, that would be a boon, but under weak governments, it has allowed their strong elites to be non-responsive to their people. They can just suck up all of the oil, gold and agriculture wealth for themselves and are not at all responsive to the people.

For decades foreign, wealthy nations like ours have actually promoted weak governments and strong business interests (you might recognize the same doctrine being promoted in our country). And as a result they have created a system with an elite group at the top unresponsive and uncaring of vast poverty at the bottom.

Third, there are many poor countries that are land locked next to other countries that are equally poor, and they drag each other down. In other regions that’s not a problem. Switzerland is landlocked, but it has Germany next to it that can build roads to ports but Uganda has to depend on Kenya.

Fourth has been their seemingly endless wars, something that again is exacerbated by weak governments and which benefits strong elites (both within and surrounding the warring nations). When your family or clan is benefiting financially from war it becomes very difficult to see a way to negotiate its end. But the results are devastating. Economist Paul Collier estimates that a war typically costs a country and its neighbors $64 billion. And once a state fails, it takes 59 years, on average, to return to functionality, at a cost of $100 billion. And the tab for foreign military interventions to attempt to pick up the pieces (though usually too little and too late to do much good) is born by foreign tax payers like you and me.

Fifth is globalization. The Washington Consensus on rules for free trade has been a disaster for Africans. For one thing, the unwritten rule underlying free trade is cheap labor, which Africa has in abundance, but it can’t compete with the even cheaper wages being paid to poor people in Indonesia, Mali, Thailand, etc., where the infrastructure is better and the financial institutions more advanced. The “one size fits all” rules of economic globalization have not only failed Africa, they have actually made its situation worse.

These are just a few of the irascible problems. We will offer a few suggestions on what to do about it in a future post.

The Scope of the Debt

One of the great sleeper issues on the planet is how so many poor and developing countries continue to have their growth crippled due to international debts that were acquired by their grand parents decades ago.

A few years ago I was on a Church World Service delegation to Honduras, one of the countries slated to receive a portion of its debts canceled by the International Monetary Fund and the World Bank. We were in a remote village up in the mountains called Dominguez.

One of our purposes there was to establish a library in the local school. CWS was in partnership with another fine Non-Governmental Organization called “AlphaLit” that runs literacy programs all over the world. The arrangement was that CWS would donate the books and AlphaLit would teach the literacy classes.

It was all a fine presentation and there were smiles all around, but when the festivities had ended one person in our group asked about the underlying issue of why we were even there. Why, she said, are we way up here setting up a library and literacy program in a school? Isn’t this something that, well, that schools do? Why isn’t there a library here already? Why aren’t there teachers teaching literacy here? Isn’t this redundant?

The answer from our host was revealing. Oh, he said, the government can’t afford teachers. These schools were built years ago, but we can only staff them with teachers for two or three months out of the year, sometimes less. Someone else then asked, well, why doesn’t the government have money for schools? They’re pretty basic aren’t they?

He laughed and said that Honduras has such an overwhelming outstanding external debt that the annual payments on just the interest owed on it literally drained the country of the finances needed for what you and I would believe to be the most basic human services like education and health. Until finally receiving debt relief from the Inter-American Development Bank in November of 2006, Honduras spent more of its national income on its loans, than it did on health care and education combined.

This summer Congress has introduced a “Jubilee Act” that would cancel all of the debts owed to the US by these poor countries, plus encourage the international lending institutions such as the World Bank and the IMF to do the same. You can influence the outcome of that debate. Call your member of congress and ask if he or she has co-sponsored the act and if not would they do so. There are children in Honduras who may be going to school next year with your help.

Suicides in India

In the rich farmlands of India there is tragedy growing, and because of globalization, you and I are contributing to it. In the midst of a booming economy, in the “White Gold” regions of cotton farming, record numbers of Indian farmers are committing suicide. Here are the numbers: Since 2001, over 5,980 farmers from the southern Indian state of Karnataka, more than 2,410 in Andhra Pradesh, and 2,280 in Maharashtra have all killed themselves. That’s about three hundred of farmers a year taking their lives in the different parts of India since just 2000. And the total could be well over 15,000.

Those statistics are staggering, but the personal stories are worse. For example, after an unexpected, pounding rain washed away his already struggling cotton crop, 23-year-old Ravinder Kisan Piwar, who had just become engaged to be married, killed himself by swallowing the pesticides he had purchased to protect his field. Prahalad Kisan Rathod hung himself on a tree outside his house after he experienced four years of consistent crop failure and mounting debts for seed, fertilizer, and basic foods. Sixty-year-old Punaji Ramaji Jhade, was the first and still the oldest in his village to kill himself, and it was also because he could no longer pay anything to his creditors. He left his home for his fields one morning saying goodbye to his wife and children, and when he was out in his field alone, he quietly fell onto his pitch fork and onto the land that had stubbornly refused his efforts to grow cotton. In deeply traditional, honor and shame, cultures, when a man is no longer able to fulfill his designated role in society, then it is the just and moral thing to do to take his own life. It is grizzly, awful, and painful, but when faced with a choice between endless despair or honor, the honorable route increasingly wins.

Why should Christians in the US care about this personal tragedy unfolding thousands of miles away? Aside from the fact that people of faith should feel a kinship with the suffering of any other member of the family of God, a portion of the causes of the economic roots of the crises is our fault.

There are many causes for their struggles. There has, for example, been a steadily decreasing amount of rain in most of the agricultural regions of India. Also, many have gotten tied up with genetically modified seeds, which are more expensive, don’t regenerate, and require costly fertilizers and pesticides.

But another reason is the US government’s policy of paying enormous amounts of money to a handful of farmers (mainly wealthy, mainly corporate), encouraging them to over-produce commodities like cotton, rice, and corn, and then the US dumps the excess on the international market at prices no poor farmer in India, Africa or Latin America can match. By under-selling farmers all over the world we have become a major contributor to the impoverishment of millions of innocent people. The result is that the global price for cotton has been going steadily down for over a decade, while the amount we pay to our farmers —to keep them producing—has been going up.

The US Farm Bill that covers those subsidies is coming up for revision this year for the first time in several years. You can influence its out come and help feed hungry families in India, Africa, and Latin America. Call your congresspersons and ask them to vote to put a cap on the subsidies and spend the money helping our own small farmers, and at the same time increasing the national budget for food stamps.

You’ll feel better for having done it, it and possibly a family on the other side of the planet may eat better soon because of it.