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House Preserves "Corporate Welfare" Agricultural Subsidies, Cuts Food Stamps and Sustainable Farming Programs Instead

From: <>


OCTOBER 28, 2005
2:17 PM
CONTACT: Oxfam America
Laura Rusu of Oxfam America, 202-496-3620 or 202-459-3739

House Misses Opportunity to Reform Agricultural Subsidies, Cuts Nutrition and Conservation Instead, Says Oxfam America

WASHINGTON - The House Agriculture Committee missed an important opportunity to reform inequitable agricultural subsidies today and chose instead to cut important nutrition benefits for needy said international agency Oxfam America. Needed anti-hunger programs like food stamps were not saved from the Congressional chopping block, while the Committee failed to make the necessary steps to begin the reform of agricultural subsidy programs that hurt family farmers in the U.S. and threaten the livelihoods of farmers in developing countries.

In the budget reconciliation effort, the Agriculture Committees in both the House and the Senate were tasked to find savings from mainly three programs: anti-hunger, conservation and commodities. The House Agriculture Committee today voted to slash all programs by a total of $3.7 billion dollars. The Senate Agriculture Committee voted last week to slash conservation programs, cut commodity payments by 2.5 percent but kept anti-hunger programs at current levels. Both proposals now move to the floors of the House and the Senate before reaching conference.

"The opportunity was there to reform a system rife with loopholes that has allowed mega farms to collect subsidies that exceed $1 million." said Charly Moore, legislative director for Oxfam America. "What's worse is that not only did the Committee take a pass on reforming subsides via budget reconciliation, they slashed anti-hunger and conservation programs instead."

Proposals of payment limits that could have been included in the budget reconciliation process would have been an important first step towards more equitable and sustainable farm program and would have also protected essential nutrition and conservation programs from deep cuts. Especially in the wake of Hurricanes Katrina and Rita, it is important that Congress keep funding key programs -- like food stamps -- at adequate levels.

"The raw power-play that unfolded in Congress today led to the decision that cuts should be made to programs that help poor people and reward good stewardship of the land rather than programs that subsidize large agribusiness," continued Moore.

The House Agriculture Committee mirrored the Senate proposal to eliminate the Step 2 program, which pays exporters and domestic mills to purchase higher priced US cotton. "Step 2" payments are highly concentrated among fourteen firms, four of which collected more than $100 million each from taxpayers between 1995-2003. This year, a WTO found the Step 2 program, along with $3.2 billion in annual cotton subsidies and $1.6 billion in export credits paid by the US in cotton and other commodities, to be illegal under WTO rules, but Congress has yet to initiate the necessary legislation to implement the ruling. However, the Step 2 cut as proposed by the House and Senate Agriculture Committees does not satisfy the WTO ruling because it does not take into effect until August 2006.

"Eliminating Step 2 is a solid step forward for the US, but more is needed to fully comply with international commitments," continued Moore. "While the Administration has said they are committed to ending trade distorting subsidies, both the House and Senate Agriculture Committees do not seem poised to make a similar commitment, instead signaling to US trade negotiators that touching subsidies is off the table."


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