U.S. Senate has cut a $5 billion-per-year farm subsidy program as part
of a bill shaping U.S. farm policy and much more. But lawmakers have
added new subsidies that critics say could end up hurting other
countries’ farmers more than the old program did.
The $955 billion Farm Bill passed the Senate with a wide, bipartisan
majority. It cuts about $24 billion from the budget over 10 years, in
part by doing away with $5 billion a year in what are called “direct
payments.” Farmers got those payments in good years and bad.
High crop prices, historic farm profits and tight federal budgets made
that subsidy politically unpopular.
Getting rid of it was one big change in the new bill, says Agriculture
Committee chairwoman Debbie Stabenow.
“It’s a reform bill, it ends subsidies and moves us in the direction of
risk management and we are very proud of the work that we have done,"
The Senate bill helps farmers manage the risks of bad weather as well as
bad markets. It offers crop insurance to farmers raising crops that have
not previously been eligible. And it provides farmers with payments if
prices drop below a certain point.
Stabenow says it’s intended to help the farmers who provide the U.S.
with a safe, affordable food supply.
But critics say the bill goes too far. Montana State University
economist Vince Smith says the new guarantee against market drops could
get the U.S. in trouble with the World Trade Organization.
“When prices fall from the current levels, subsidies to a whole plethora
of crops go up. Well, that’s exactly when countries like Brazil will
bring trade dispute cases claiming price suppression in world markets,"
Brazil already has won a WTO case against the United States over cotton
subsidies. Smith says the new Farm Bill could revive that dispute.
bill also permits $60 million to be spent buying emergency food aid
closer to where a crisis is happening, rather than shipping food from
the U.S. Supporters say it’s faster and cheaper and could save more
Eric Munoz with the anti-poverty group Oxfam says it’s a step forward.
But he points out that it’s just $60 million out of a food aid budget of
more than $1 billion.
“It is a very small portion of a relatively large program. So I think
we’re just at the beginning, really, of creating the kind of flexibility
for food aid that we’d like to see on a much larger scale," said Munoz.
But farm groups, food processors and shippers object to changes that
they say will cost American jobs.
The changes are not included in the version of the Farm Bill the House
of Representatives is expected to begin debating in the next few weeks.
And the House and Senate are even further apart on domestic food aid