Washington prepares ground for a 2007 policy rethink

US farmers are facing a shake-up in the way their subsidies are delivered, with or without an agreement in the stalled Doha Development Round of world trade talks.

Addressing the St Louis Agribusiness Club in Missouri at the end of last week, US agriculture secretary Mike Johanns stressed the importance of opening up world markets to US exports.

But in return for better global access, there would have to be adjustment to domestic supports and a new US Farm Bill.

Farmers and other stakeholders have already been widely consulted on what form the new legislation should take, through a series of 52 Farm Bill Forums in 2005.

While steering clear of any detail, Mr Johanns did drop some hints that there would be much more emphasis on rural development and less on production support.

“In general, our conservation programmes are very popular and have broad-based support,” he said. “Our rural development programmes got really unanimous support.” Energy crops would also be a priority under the next Farm Bill.

But there was a need to rethink some of the crop payment schemes, which currently are targeted at just five crops and lead to distortions in the allocation of funds.

“Support isn’t equitable now. I think we should be investing in programmes that benefit farmers and ranchers across the country, whether those be research programmes, rural development investments, conservation or others.”

Mr Johanns also admitted that change was necessary to protect US farm supports from international challenge via the WTO. Brazil, amongst other countries, had already complained about the USA’s marketing loan programme and counter-cyclical payments.

The agriculture secretary dismissed recent rumours that, in the absence of a WTO deal, the existing farm programme, which expires in the middle of next year, could simply be rolled over. Proposals for a new Farm Bill are expected in January.