Veneman defends U.S. farm policy

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Agriculture Secretary Ann Veneman on Tuesday defended massive new U.S. farm subsidies and dismissed a growing wave of complaints by foreign countries as inaccurate and politically motivated.

President Bush signed a six-year Farm Bill into law earlier this month, boosting aid for certain crops and dairy products by 67 percent, or about $6.4 billion annually.

Foreign leaders have protested the increased subsidies, claiming the lavish spending contradicts Bush's campaign for freer trade. Australia, Brazil, Canada and the European Union have all hinted they may lodge complaints before the World Trade Organization.

Brazil's Agriculture, Minister Marcus Vinicius Pratini de Moraes, was scheduled to meet with Veneman later on Tuesday and was expected to press his concerns.

“The complaints we are hearing, we think, are just unjust,” said Veneman. "And some (countries) for their own political purposes are distorting the facts."

"Some are saying that the new farm bill provides a 70% boost in farm program support and that support has ballooned out of control," said Veneman. "Well, that's not the whole truth. People are comparing apples and oranges. When examining the support we provide for our farm sector, it's important to add in the emergency supplemental support that's been provided during the last four years into those figures, to be accurate. That's roughly an additional $7.5 billion each year for the last four years. The new farm bill provides roughly $7.4 billion each year in new spending for farm programs."

She noted the new law makes significant changes in farm program structure and funding. It will bring "much needed stability to our farmers and ranchers as they conduct their business." It continues direct payments based on historical plantings and yields. It creates a new system of countercyclical payments based on market prices in relation to target prices.

It revises and rebalances loan rates for the marketing loan program for major grains and oilseeds. It provides a record level of support for conservation, an 80% increase, 85% of which will be used for programs on working farmlands, and it adds new programs to preserve wetlands and improve soil and water quality.

According to USDA figures, direct subsidies to farmers during the 1998-2001 totaled $67 billion, including $30.5 billion in extra payments. This compares to spending levels of $68.8 billion for 2002-2005.

"While some of our trading partners want to point fingers," Veneman said, "I think their criticism is in large part to deflect attention from some of the realities."

The Bush administration claims U.S. agricultural subsidies were still considerably less than the hand-outs given to Japanese and EU farmers.

According to the latest available Organization for Economic Cooperation and Development figures, EU support for farmers in 2000 totaled $90 billion, equivalent to 38 percent of gross farm revenue, compared to $49 billion or 22 percent for the United States. The OECD average is 34 percent and the total amount spent by its member countries on farm support in 2000 was $245 billion.

Reuters, www.agriculturelaw.com



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