Bush signs Farm Bill, trade partners upset

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President Bush signed a six-year Farm Bill law on Monday boosting U.S. crop and dairy subsidies by 67 percent over the protests of U.S. trade partners.

The bill adds an estimated $6.4 billion a year to crop and dairy spending and marks a further retreat from free-market reforms begun in 1985. The fatter subsidies will become available at harvest – just weeks away for the drought-withered winter wheat crop.

Bush signed the $51.7 billion law during a 12-minute ceremony timed to win coverage on early-morning farm newscasts before leaving the White House for a trip to Chicago.

"Success of America's farmers and ranchers is essential to success of the American economy," Bush said. "This bill is generous and will provide a safety net for farmers. It will do so without encouraging overproduction and depressing prices.

Besides larger crop subsidies, the new law raises conservation spending by 80 percent and restores food-stamp eligibility to legal immigrants in the United States for five years.

Canada, Australia, the European Union and Brazil have complained the new law contradicts U.S. calls for freer farm trade. But no one has vowed to challenge it before the World Trade Organization.

"This begins to level the playing field," responded Sen. Kent Conrad, North Dakota Democrat, who said EU subsidies were vastly larger than U.S. outlays.

The new law sets crop supports higher than the White House wanted but Bush said spending will stay within WTO limits. The United States was a very strong voice in world trade talks to reduce trade barriers and reliance on trade-distorting farm subsidies.

"The bill is going in the complete opposite direction" of freer farm trade, said Gerald Keiley, the EU agricultural attache in Washington. "The U.S. administration will have a lot of work to do in Geneva to convince people they are committed to rolling back production- and trade-distorting subsidies."

Australian Trade Minister Mark Vaile said in Geneva the United States should "recommit publicly" to farm trade reform.

Agriculture Secretary Ann Veneman said farmers would see an "information-friendly" implementation of the new law, including use of the Internet to keep growers up to date.

Reuters  



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