OTTAWA (Staff) – When U.S. president Bill Clinton rejected Republican budget proposals just before Christmas, one of his complaints was aimed at efforts to curb farm export subsidies.
The Republican Congress, while proposing to keep the Export Enhancement Program machinery intact, suggested funding be cut in 1996 to $350 million (U.S.).
Clinton, in a list of 82 reasons to reject Republican plans, noted world trade rules would allow spending of almost $1 billion in fiscal year 1996 – $633 million more than proposed.
“Should our producers need the EEP in future years, lack of funding could hinder U.S. farm export efforts,” wrote the president.
Read Also
First annual Ag in Motion Junior Cattle Show kicks off with a bang
Ag in Motion 2025 had its first annual junior cattle show on July 15. The show hosted more than 20…
Republicans have been assuring farm lobbyists that if there is a need in future years, they would increase spending.
Affects Canadian prices
This EEP dance has been watched with anxious bemusement in Canada. American export subsidies in markets where Canada competes are considered the most potent price-eroding factors.
And the irony, said Agriculture Canada trade specialist Terry Norman, is that with high commodity prices now dominating markets and grain in short supply, the Americans have not used EEP subsidies for months and probably will not need them this year.
“But they have fallen in love with the darned thing, now that they have it,” he said.
The result is that no matter how much budget-cutting is planned in Washington, neither political party is willing to take away their ability to subsidize exports.
The farm lobby would not want it any other way.
Tax cuts promoted
John Keeling, a Capitol Hill lobbyist for the American Farm Bureau, said his organization supports sharp cuts in farm spending in return for domestic tax cuts which will help farmers.
It supports a more “market-oriented” farm policy.
It also draws the line at gutting the EEP.
The 1993 General Agreement on Tariffs and Trade called for a gradual reduction in export subsidies, allowing the Americans to spend up to $983 million in the fiscal year which started Oct. 1.
“We would like it funded at GATT-maximum levels,” said Keeling. “It is an important program.”
