US passes farm safety net with global consequences

US passes farm safety net with global consequences

AFP, WASHINGTON
Sunday, Jul 29, 2007, Page 7
The US House of Representatives on Friday passed a massive farm bill packed with consequences for global trade, despite a veto threat from US President George W. Bush.
The multibillion dollar five-year package, which passed by 231 votes to 191, offers a safety net for farmers and ranchers, regulates subsidies and aid and includes nutrition and conservation programs.
Democratic House speaker Nancy Pelosi hailed the bill as taking "America's farm policy in a new direction that stands with our farmers and ranchers and recognizes their vital role of providing food, fiber, and fuel for America and the world."
But Bush's Republican administration threatened to veto the legislation, partly over what it says are high subsidies, a major stumbling block in the WTO Doha Round of global trade negotiations.
Some Republicans, who had been disposed to support the bill, withdrew their backing after Democrats added a tax hike on some foreign-owned companies with US subsidiaries to partly fund government nutrition programs.
Agriculture Secretary Mike Johanns blasted the "11th-hour" adoption late on Thursday of the tax hike, saying it unfairly pits farmers against another sector in the economy.
"We have seen the polarizing impact of developing funding for farm policy under the cloak of secrecy," he said. "It's historic and, I might add, not in a positive way."
Farmers "advocated for new programs, they advocated for new policies, but they never advocated for new taxes," he said.
According to US Department of Agriculture research, he said, only one time was a tax hike included in a farm bill: in the Depression-era 1933 farm adjustment act.
"I can think of no quicker way to threaten the safety net than by asking someone else to pay extra for it," he said. "Yesterday's action by the majority leadership narrowed support for the Farm Bill, and it lessened its chances for success, and it divided one great industry against another."
The head of the Republican minority in the House, John Boehner, complained that the new bill threatened 5.1 million US jobs.
"At a time when China, India and Russia are opening their doors to expand their economies and attract investment, these tax hikes send the signal to every potential investor in the global economy that it's not worth the hassle to invest in America," Boehner said.
The Bush administration, under pressure to help unblock the Doha round, says subsidy reductions in the bill are not sufficient.
Developing nation critics of farm subsidies say they allow developed countries to dump excess production on world markets at an unfairly low cost, preventing many poor countries from strengthening their own farm-sector exports.
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