Special interests at work
Trade and protection are always contentious issues, because protection creates rents that are at risk should trade barriers be removed. Daniel Sumner, a UC Davis ag economist “with impeccable credentials” studied US Cotton subsidies. Sumner’s research was done on behalf of Brazil for a recent WTO hearing. Here’s what he found:
During 1999-2002 … cotton prices slumped to about 30 cents a pound, and Sumner calculated how the nation’s 25,000 cotton farmers would have behaved if the $3 billion to $4 billion a year in domestic and export subsidies had been removed.
He concluded that the United States, the biggest exporter of cotton, would have shipped about 41 percent less cotton abroad; that would have raised the world price about 12.6 percent.
This research has some people hopping mad, which is why you can find the story in the newspaper. Cotton interests are up in arms over the fact that Sumner did his research on behalf of another country (more accurately, that his research was effective in threatening their subsidy). Here’s Sumner’s response.
“I think the WTO is incredibly important, for the world as a whole and for agriculture,” he said. “I think it helped the decision-making to have someone familiar with U.S. farm programs, and who had analyzed them for a while, to be involved in the case.” The only way to do that, he added, was to work for one side or the other, and though he would have gladly given the same information to the U.S. Agriculture Department or trade representative’s office, “I suspect they wouldn’t have wanted it used.”
Here’s the rhetoric from the cotton interests:
“If this was governmental or military related, it might be called treason and court martial proceedings would be in order,” Earl P. Williams, president of the California Cotton Growers Association, was quoted as saying in the Western Farm Press. “Furthermore, I would hope that anyone that supports the UC system financially would step back and question continued support until this issue is resolved.”
This conflict occurs in academia far too often. Like Tyler Cowen (hat tip), I applaud Prof. Sumner. A different view was expressed by the Dean of the Ag school at Davis, Neal Van Alfen:
“if you have close working relationships with a broad group of people, you want to think twice about developing relations with their competitor.”
Van Alfen should get a job in politics, not academics.