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US Farm Subsidies to Set Record High

US spending on farm subsidies likely to set record www.chinaview.cn

2005-10-14

WASHINGTON, Oct. 13 (Xinhuanet) -- US spending on farm subsidies could set a record this year even as the Bush administration tries to persuade member nations of the World Trade Organization (WTO) that it is serious about overhauls, the Wall Street Journal said Thursday.

The outlook for such record spending on farm subsidies was triggered Wednesday by the Agriculture Department's latest crop report, the journal said.

In the report, the department raised its harvest forecasts for corn, soybeans and cotton, signaling that crop prices will sink low enough for many farmers to receive far bigger federal checks than they did last year.

The journal said some federal officials believe the cost of subsidy programs could approach or exceed the record of 22.9 billion dollars set in 2000, when depressed crop prices pushed the Midwest farm belt into recession.

Farm-subsidy costs "are likely to be a record this year," KeithCollins, the department's chief economist, was quoted as saying inan interview Wednesday.

The world's poor nations, which tend to be heavily dependent onagriculture, complain that US and European Union's farm subsidies spur growers to produce gluts that depress prices of crops world-wide.

The United States and the European Union are proposing to gradually reduce spending on trade-distorting farm subsidies to win votes at the WTO from developing nations for an agreement thatwould lower barriers to trade in services and manufacturing.

This week, the Bush administration said the United States is prepared to cut its most trade-distorting farm subsidies by 60 percent over five years to 7.6 billion dollars, said the journal.

But US subsidy costs are soaring, the journal said. The Agriculture Department predicted in August that government payments to farmers would climb 61 percent to 21.4 billion dollarsfrom 13.3 billion dollars in
2004. Enditem