A senior American agricultural official says the United States administration’s proposals for a new U.S. farm bill are far more positive than they have been given credit for by countries like Canada.
U.S. reaction to the proposals has generally been positive, Gary Groves, agricultural minister-counselor at the American embassy in Ottawa, told the Canadian Federation of Agriculture annual meeting March 1.
“Internationally, (reaction) has been lukewarm at best and we had been hoping for something better,” he said. “You really have to look closer and give it another review. I think there are some directional switches in there that will take us in ways the international community wants us to go.”
Read Also
Geopolitics can change trade routes
WHISTLER, B.C. — Today’s geopolitical tensions could have dire long-term consequences, says the director of international policy at the University…
He said Canada’s decision to challenge American corn support at the World Trade Organization is one reason new proposals are for a less production and trade-distorting farm bill.
“That very much has gotten our attention,” Groves told CFA delegates. “The U.S. depends on exports and we have to live by our international obligations.”
He said the new bill, if passed, would reduce the level of guaranteed prices set through loan rates and change the system to reduce the chance that in years of higher crop yields and revenues, payments would be higher. It would tie loan rates to historic averages rather than current costs, expand the number of crops available for supports to reduce the concentration on a few commodities and spend more on conservation.
It would reduce farm bill spending by $10 billion US over five years compared to the current bill, he said.
“All that hopefully will make the farm bill a safety net rather than a market driving force,” said Groves.
However, he was in a room that included farm bill skeptics.
“We would be among those who are lukewarm,” said Ontario Federation of Agriculture past-president Ron Bonnett.
Representatives of the European Union and Australia also said their countries consider proposals for the 2007-12 farm bill too subsidy rich and production distorting.
Groves said international critics look at the total estimate of support rather than looking deeper to see how spending patterns and goals are being shifted from production help to support for energy crops, market signals and conservation.
He said that if a WTO deal is struck after the farm bill is written this summer, the bill can be opened up to reflect the requirements of the WTO.
During the discussion, deputy Australian high commissioner in Ottawa Tony Huber also praised Canada for influencing U.S. policy by challenging corn subsidies at the WTO.
In some ways, the corn subsidy arguments will parallel arguments made by Brazil against U.S. cotton supports. The Americans lost that case.
Huber said Canadian politicians and lobbyists should “swarm Capitol Hill” in Washington to encourage Congress to write a new farm bill that does not distort production and markets.
