More government billions for US farmers

By Philip Clarke

US president George W Bush this week signed off another emergency aid package for his countrys beleaguered farmers – the fourth such bail out in as many years.

The latest deal will see about $5.5 billion (3.9bn) being paid to growers to help them through another serious drought which has hit crop yields and sparked numerous fires.

Continued low commodity prices have also hampered US farmers earnings.

Grain and cotton producers will get the bulk of the additional direct payments, worth some $4.6bn (3.3bn). Another $420m (300m) will go to oilseed growers.

The latest pay-out means that the USA has spent over $30bn (21bn) in four years in emergency farm aid.

EU officials have been dismayed by the US action, accusing it of winding up agricultural support, while at the same time demanding that other countries cut theirs.

The commission also argues that the ad hoc emergency packages have become so routine that US farmers are now basing their planting decisions on them.

Early drafts of a new long-term farm bill to come into effect next year suggest a possible return to the old deficiency payment support system, acknowledged as being one of the most trade distorting.