Subsidies for US farmers in farm bill is attacked by EU
Subsidies for US farmers in farm bill is attacked by EU
By Philip ClarkeEurope editor
EU FARM commissioner, Franz Fischler, has launched a stinging attack on the new US Farm Bill, branding it "pernicious" and a "blow to the credibility of US policy in the World Trade Organisation".
Approved in Washington this week, the new legislation effectively enshrines the $30bn (£21bn) the US has shelled out in emergency relief over the past four years in response to low prices and climatic disasters.
Subject to final approval by President Bush, an extra $73.5bn (£51bn) will be channelled into the farm budget over the next ten years. This is on top of the $76.6bn (£53bn) the US already spends on food and farming each year.
The new programme will provide an extra $4.8bn (£3.3bn) a year in crop supports, including a boost to the loan guarantee system and, for the first time since 1995, a set of "target prices" triggering automatic payments to growers when commodity values are low.
A further $2bn (£1.4bn) a year is being made available for a new Conservation Security Programme, and annual guaranteed payments, based on historic plantings and yields, are also being increased.
US agriculture secretary, Ann Veneman, welcomed the Bill, which, she said was more market-oriented and put extra emphasis on conservation.
She also claimed that most of the measures would not count against the US subsidy limits agreed with the WTO. "There is nothing in the WTO that prevents us from supporting our agriculture. Its just how we do it."
But Dr Fischler accused the US of flunking its responsibilities. "At a time when all developed countries have accepted the direction of farm support away from trade- and production-distorting measures, the US is heading in the opposite direction," he said.
"I am astonished by claims that much of these price-linked subsidies would not be counted against US commitments. The US will have to respect WTO rules," he added.
The EU estimates that, while European farmers currently benefit from subsidies worth $4500 (£3100) a year each, their US counterparts get around $11,000 (£7600). And that is before including the massive $39bn (£27bn) the US government gives to its poor to help them buy food.
Reinforcing price-linked payments would result in over-production as farmers brought more marginal land into production, said Dr Fischler.
"This self-defeating policy can only further depress prices. Counter-cyclical programmes are especially pernicious since they act as hidden export subsidies and depress domestic prices to block out imports."
The NFU agreed that the new policy included a lot more support coupled to production, which would weaken the US position in the WTO. The new package has also drawn heavy criticism from Australia and New Zealand, which say it will disadvantage their unsubsidised farmers. *
Farm services
(including commodity
programmes) $23bn
Risk management
(including crop
insurance) $3bn
Foreign agricultural services
(including export credits) $3bn
Rural development $3bn
Food programmes
(including food
stamps) $39bn
Environment and
forestry $7bn
Other
(including R&D and
marketing) $3bn
Receipts and loan
repayments — $5bn
TOTAL $76bn
Source: USDA website