Senate Moves to Keep Needed Anti-Hunger Programs but Misses Opportunity to Reform Agricultural Subsidies, Says Oxfam America

10/19/2005 4:14:00 PM

To: National Desk
Contact: Laura Rusu of Oxfam America, 202-496-3620 or 202-459-3739

WASHINGTON, Oct. 19 /U.S. Newswire/ -- The Senate Agriculture Committee missed an important opportunity to reform inequitable agricultural subsidies and to signal to the international community and U.S trade negotiators that it is willing to negotiate seriously, said international agency Oxfam America today. Although needed anti-hunger programs like food stamps were kept off the chopping block, the Committee failed to reform 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 Committee in both the House and the Senate were tasked to find $3 billion in savings from mainly three programs: anti-hunger, conservation and commodities. The Senate Agriculture Committee voted today to slash conservation programs, cut commodity payments by 2.5 percent and keep anti-hunger programs at current levels.
"We are really pleased that Senator Chambliss changed his mind on cutting anti-hunger programs, but what is on the table ultimately fails to truly reform inequitable agricultural subsidies," said Charly Moore, legislative director for Oxfam America. "The Committee took a pass on the opportunity to reform subsides via budget reconciliation, failing to take the first step towards a more equitable and sustainable farm program."
Limiting agricultural payments could have encouraged international trade negotiators gathering in Geneva for the General Council meetings at the World Trade Organization (WTO). In proposals intended to revive the negotiations stalled on agriculture, the EU and U.S. offered to cut their trade distorting agricultural subsidies. But the current negotiations in the Doha round could very well be jeopardized by the shortsighted move of the U.S. Congress.
"While the Administration has said they are committed to ending trade distorting subsidies, Congress does not seem poised to make a similar commitment," said Moore. "This vote is a signal to U.S. trade negotiations in Geneva that touching subsidies is off the table."
The Senate Agriculture Committee also eliminated the Step 2 program, which pays exporters and domestic mills to purchase higher priced U.S. 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 U.S. in cotton and other commodities, to be illegal under WTO rules, but Congress has yet to initiate the necessary legislation to implement the ruling. The Step 2 cut as proposed 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 U.S., but more is needed to fully comply with international commitments," continued Moore. "Today's development pretty much keeps the status quo in that farmers in developing countries will continue to be hurt by the dumping of our commodities, the U.S. will continue to be sued at the WTO for providing trade-distorting subsidies and American farmers will continue to be deprived of an equitable and sustainable farm program."
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