Chris Shaffer, a fifth-generation Walla Walla wheat farmer, faces what appears to be a big loss of income — the government wants to slash the federal aid it pays him and 4,000 other state wheat farmers by 60 percent.

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Chris Shaffer, a fifth-generation Walla Walla wheat farmer, faces what appears to be a big loss of income — the government wants to slash the federal aid it pays him and 4,000 other state wheat farmers by 60 percent.


It’s part of a dramatic proposal aimed at breaking the deadlock on agriculture issues that confronts the 149 countries gathered at the World Trade Organization meeting in Hong Kong this week.


But rather than grab his pitchfork and march on the Capitol, Shaffer is boarding a jet to Hong Kong to support the plan as a trade representative for U.S. Wheat Associates, the national organization of state wheat commissions.


“Now is the time to make the WTO work for us,” Shaffer recently told the U.S. House Committee on Agriculture.


Without an agriculture deal, the meeting could collapse in discord, as did two previous WTO gatherings. The U.S., the European Union and a group of less-developed nations such as Brazil and China are all maneuvering for a deal with enough goodies to please the folks back home and enough giveaways to satisfy their trading partners.


Talks involving other sectors crucial to the Northwest economy — trees, software and aircraft among them — are going on, too, but any agreement won’t take effect until a deal is reached on agriculture.


The U.S. plan looks like it could cost farmers big money. Washington state received $194.8 million in federal subsidies last fiscal year, mostly for wheat growers, as part of $12.5 billion paid nationally. Government payments this year could double because prices are so low.


Why would Shaffer want to give up that kind of government largess?


One reason, he says, is that farmers won’t really have to forgo the money.


Under WTO rules, the U.S. and other rich countries are offering to reduce programs that pay farmers in ways that distort trade, such as price supports. Governments would keep the right to pay farmers unlimited sums through programs that don’t distort trade, such as incentives for rural land conservation.


“Every country has a right to protect their farmers in a nontrade-distorting way,” Shaffer said in an interview.


Farmers figure they’ll be able to persuade Congress to keep roughly the same level of funding by restructuring programs when a new farm bill is debated in 2007.


The U.S. strategy has another angle, too: pressuring the European Union (EU) and other countries to cut tariffs on imported farm products, which are generally much higher than those in the U.S.


This would allow U.S. farmers, including Washington state’s wheat, apple, pear and cherry growers, to sell more in Europe and around the world, where the most consumers are.


That’s why farmers aren’t grabbing pitchforks.



It remains to be seen, of course, how the latest round of trade brinkmanship plays out. Big rifts remain between the proposals tabled by the U.S., EU and a Group of 20 developing nations that includes giants like China, Brazil and India. (See accompanying story.)


The current round of talks, begun in 2001 in Doha, Qatar, is supposed to be focused on helping developing countries.


The World Bank says global growth from freer trade could lift millions of people out of poverty.


Ministers need to agree on general parameters, or “modalities,” for cutting farm subsidies and tariffs, after failing at the prior summit in Cancún, Mexico, in 2003. They also will talk about a range of other issues, from manufactured goods, to intellectual property to rules and services.


Even if things go smoothly in Hong Kong, a final agreement is still at least a year away.


As the talks play out this week, Washington farmers will be watching closely. Despite their support for the U.S. proposal, many are worried.


Talk of subsidy cuts comes as high fuel and fertilizer costs push more farms into bankruptcy. A sample farm in Whitman County that made 6 cents profit per bushel of wheat last year is now losing 43 cents a bushel, said Tom Mick, head of the Washington Wheat Commission.


“Producers are asking the question of [the U.S. Trade Representative] and the U.S. Department of Agriculture, ‘If we give up billions of dollars of subsidies, can we be sure we’re going to get an equal gain in exports?’ ” Mick said. “We’re not getting many answers.”


And yet, Mick said, farmers support cutting subsidies if they can get tariffs lowered in other countries.


Shaffer concurred. “We will cut our subsidies if we get market access.”


Apple, pear and cherry growers, who don’t receive subsidies and don’t have protective tariffs on imports, say they just want the WTO to hammer out a deal so they can sell more abroad.


Apple growers in the EU receive subsidies and are sheltered by tariffs of up to 9 percent on imports.


That means “we’re effectively excluded from many of the countries in the EU,” said Mark Powers, vice president of the Northwest Horticultural Council in Yakima.


Powers, who also chairs the national group that advises the U.S. Trade Representative on fruits and vegetables, said he wants a WTO agreement to level the playing field.


“That’s the only way we get barriers down and exports up,” he said.