Despite trade, environmental problems, U.S. lawmakers give strong backing to farm bill

Despite trade, environmental problems, U.S. lawmakers give strong backing to farm bill

The Associated Press
Tuesday, July 31, 2007

WASHINGTON: The U.S. Congress is considering legislation that, critics say, could hurt the poor in developing countries, set back trade talks, contribute to environmental damage and add to the government's budget deficit.
Yet the measure, providing billions of dollars in agricultural subsidies, is expected to pass despite a veto threat from President George W. Bush.
Lawmakers say the money is needed to protect America's farmers and help to preserve the rural way of life for millions of Americans. For many members of Congress, the bill also is crucial to their own survival in next year's elections, given the outsized political muscle of the farmers and the agribusinesses who benefit.
"If you are representing a rural district in Iowa and you vote to cut corn and soy payments, you will probably lose," said Marc Cohen, a researcher at the International Food Policy Research Institute, a Washington-based policy group that focuses on world hunger.
The House of Representatives approved the measure, known as the farm bill, last week. Although subsidies have broad support, most Republicans opposed the bill because of a provision that would impose new taxes on some multinational companies.
The Senate will have to pass its own version of the farm bill and, after the two are reconciled, it would go to Bush to be signed into law.
Bush has said he would veto the bill if subsidies are not lowered. But lawmakers, activists and analysts say they do not expect major changes to a program that paid out about $122 billion (€89 billion) to the farm sector between 2000-2005.
The effects of those subsidies go well beyond U.S. borders.
They are a big issue in the latest round of global trade talks, known as the Doha round, in which rich and poor countries have been wrangling over trade barriers. Other countries are looking to the United States — as well as the European Union — to slash agricultural subsidies before they take big steps to open their markets.
"The bill under consideration signals to other countries that the United States is not serious about cutting its agricultural subsidies," said Daniel Sumner, director of the University of California Agricultural Issues Center.
Many economists believe that without high subsidies in wealthy countries, developing countries could compete in some agricultural markets. Farmers in West Africa, for instance, could compete with the United States in cotton production.
Anti-poverty groups like Oxfam have campaigned against subsidies, creating an unusual alliance with conservative Americans who support free trade and oppose budget-busting spending.
Some lawmakers also have criticized a measure in the bill that requires the U.S. government to buy all its food aid for poor countries from domestic sources. They say the United States could save money in transportation and help farmers in poor countries by buying products overseas. An amendment to the House bill that would have allowed some food to be bought abroad failed.
Environmental groups also have lobbied against the subsidies, which they say encourage farmers to plant on marginal land that requires more fertilizer and water and damages the landscape.
Although many environmentalists advocate replacing oil and gas with biofuels, some also have argued that U.S. subsidies are poorly spent on corn-based ethanol. They argue that ethanol made from sugar is less polluting, and it would be more efficient for the United States to import it from places like Brazil.
Corn ethanol has a lot of political support in the United States, however, including from leading presidential candidates. Corn is big business in Iowa, the midwestern state that will hold the first major contests in the political parties' nomination process to select their candidates for elections in November next year.
Farm states also could be crucial in elections for Congress, where Democrats hold only narrow majorities in both chambers. The top Democrat in the House, Speaker Nancy Pelosi, once advocated revamping the farm bill, but she helped push through the bill as it stands.
Farmers also are adept at making their views known in Congress and have effective lobbyists, such as Charlie Stenholm, a former congressman who, until 2005, was the top Democrat on the Agricultural Committee.
Stenholm argues that the United States cannot stop helping its farmers while other countries and the European Union maintain their support programs.
"If you don't maintain a competitive structure with the rest of the world, the prices would fall and you would see collapses around the world," he said.