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Senate won't cap farm subsidies

November 3, 2005

Washington, D.C. - The Senate today turned down a proposed cap on the amount of subsidies going to the nation's largest farms.

Sen. Charles Grassley, R-Iowa, proposed to limit subsidies to $250,000 per married couple. Under existing law, the limit is technically $360,000 but there are ways that farmers can easily avoid even that cap.

Three years ago, the Senate approved Grassley's proposal 66-31.

But today, in the face of strong opposition from southern lawmakers, Grassley could not even overcome a procedural objection to the proposal, which he wanted to add to a package of spending cuts under consideration in the Senate.

The Senate voted 53-46 against allowing consideration of Grassley's subsidy cap, which effectively killed the measure.

Grassley says that large farms are using federal subsidies to expand their operations and push other producers out of business.

However, the cap is strongly opposed by southern farmers, because it would fall hardest on cotton and rice growers, and leading farm organizations like the American Farm Bureau Federation lobbied against it.

The chairman of the Senate Agriculture Committee, Saxby Chambliss, R-Ga., said farmers are being hurt by low commodity prices, high prices and weather-related disasters.

"This is not the time to say to our farmers ... we're going to change the program in midstream," he said. __________________________________________________
International Herald Tribune - France 

U.S. Senate showdown on farm subsidies is threat to trade talks By Elizabeth Becker International Herald Tribune THURSDAY, NOVEMBER 3, 2005

WASHINGTON Over the strong objections of the White House, the U.S. Senate took a step Thursday to hold on to farm subsidies that are at the core of an American proposal aimed at breaking the deadlock at global trade talks.
The move came as a senior U.S. trade delegation prepared to travel to Europe next week to push the European Union to make greater compromises to lower agriculture barriers.
Rob Portman, the United States trade representative who is scheduled to meet with other trade ministers in London on Monday, helped revive stalled trade talks last month when he offered to reduce some U.S. farm subsidies by as much as 60 percent.
He also told the World Trade Organization that he would propose other changes in farm programs as long as the other major trade partners offered similarly meaningful subsidy cuts.
But on Thursday, the Senate raised no objections to extending those subsidies by four years, to 2011. The White House had wanted the Senate to let stand the expiration date of 2007, when Congress is scheduled to rewrite the entire farm program. Now, critics contend, it will be harder to convince U.S. trading partners that the farm lobby is willing to give up some of its approximately $19 billion in annual subsidies.
The Bush administration said in a statement that it "strongly objects to the extension through 2011 of select farm programs," but the Senate nonetheless kept the provision in legislation to reduce the U.S. budget. It still must be approved in conference with the House of Representatives before being sent to the president.
The legislation comes as trade ministers strive to meet a December deadline to reach a minimal accord for a new round of reductions of trade barriers with a special goal of helping developing nations. Since more than 70 percent of the world's poor live in rural areas, developing countries have said their top priority is eliminating trade-distorting agriculture supports.
Rich nations spend as much as $300 billion each year in such supports. And with global commodity prices falling, that figure could grow. The U.S. Agriculture Department announced this week that direct government aid to farmers would grow by 70 percent this year, reaching a record $22.67 billion.
Politicians representing U.S. farm states have warned the administration that they do not want trade concerns to dictate how their farmers receive government aid. Critics worry that moves like extending the farm subsidies beyond 2007 will undermine chances for the United States to reach an accord with Europe and other nations, like Japan, that have equally strong farm lobbies opposed to change.
Portman told Congress this week that successful global trade talks would benefit American farmers, but that time was running out.
"If we can't agree next week on agriculture, I can't see how we'll meet the December deadline," Portman said at a congressional hearing on Wednesday. "The clock is ticking."
He pointed to World Bank studies showing that as many as 300 million people could be lifted out of poverty if this round of trade talks were to reach a successful conclusion.
But Senator Saxby Chambliss, Republican of Georgia and chairman of the Agriculture Committee, stood by his changes to the agriculture programs during the budget debate on Thursday.
He overcame an attempt by Senator Charles Grassley, Republican of Iowa, to cap the size of farm subsidies at $250,000 a farm. Grassley had argued that the current system was unfair since the top 10 percent of the farmers received 72 percent of the taxpayer-financed subsidies. He had argued that a cap would provide a safety net for the smaller, more vulnerable family farmers.
The vote was 53 to 46 against Grassley's proposal. The budget package awaited final Senate approval.

Copyright © 2005 The International Herald Tribune |