Few ways to limit farm subsidies, report says

By Elizabeth Becker

WASHINGTON, D.C., September. 4, 2003 -- CropChoice news -- , NY Times, 09/03/03: On the eve of global trade talks, the United States Department of Agriculture released a report today showing that there were few effective payment limits on the $20 billion that the country spends each year to subsidize farmers.

Poor and developing nations have complained that subsidized agricultural exports from rich nations destroy the livelihood of millions of farmers in Africa, Asia and Latin America. Farm subsidies will be the subject of negotiations at a World Trade Organization meeting next week in Cancún, Mexico.

Republicans lawmakers in Congress beat back a bipartisan move in the Senate to introduce payment limits in the 2002 farm bill, which was signed by President Bush. The administration took no stand on the issue during the debate.

In its annual report on global economic prospects also released today, the World Bank urged the United States and other wealthy nations to reduce subsidies as part of an overall plan to lift poor nations out of poverty through trade and investment. The World Bank's chief economist, Nicholas Stern, said the wealthy countries could "show leadership by reducing agricultural protection."

Big industrial-scale American farms, the ones most responsible for growing the surpluses of farm produce that are exported, are collecting an ever-greater share of the farm payments, according to a separate analysis released today by the Environmental Working Group, a nonprofit organization.

In 1995, they received $3.98 billion, or 55 percent of all federal farm payments. In 2002, their portion increased to $7.8 billion, or 65 percent of all federal payments.

Acknowledging that payment limits are among the most sensitive and emotional issues in farm programs, Keith Collins, the chairman of the commission issuing the report, said his goal was to help Congress as it continues to debate whether to limit the payments - which is the goal of smaller farmers - or to leave them largely unfettered, which helps the biggest farmers.

"If your goal is to encourage exports, then maybe you don't like payment limitations," Mr. Collins said, summarizing the conclusion of the 10 member panel chosen by Congress and Ann M. Veneman, the secretary of agriculture.

The commission made no recommendations on the wisdom of limiting farm payments, saying the decision rests with Congress.

The report points out that "those who view abundant farm production or increasing exports as primary goals of farm programs may well argue that there should be no payment limits at all, as any limits, if they are effective, might curtail production and therefore exports as well."

Ken Cook, president of the Environmental Working Group, said the new report on payment limitations was "important and sobering."

The report, Mr. Cook said, "strengthens the hand of reformers who want a more equitable farm program that doesn't distort trade and supports conservation."

Source: http://www.nytimes.com/2003/09/04/business/worldbusiness/04trad.html


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