Multilateral negotiations within the Doha Round, protests by Canada and Brazil addressed to the WTO (World Trade Organization), congressional debate in Washington…the agricultural policy of the United States, known as the Farm Bill, is making headlines in the national and international press.
The reduction of internal support for agriculture is in fact on the agenda of a series of meetings within the Doha Round and American agricultural policy is the main target of scrutiny along with the European CAP. While the United States policy is highly demanding in terms of access to European and third world markets, it offers few concessions in return concerning its system of internal aid, thus satisfying the needs of its export-oriented agriculture.
Canada has also announced on June 8th that it has called for the creation of a group of WTO experts to arbitrate on the Farm Bill. Ottawa believes the range of subsidies it deploys1 “distorts exchanges” and exceeds the levels agreed on concerning agriculture during the Uruguay Round by several billion dollars every year. This is not the first time Canada has denounced the American system of agricultural aid: already at the beginning of the year it requested the setting up of consultations at the WTO in order to file a complaint concerning the program of support for corn producers. Beforehand, Brazil had already successfully filed a complaint concerning cotton. And, over a year ago, the WTO ruled in favor of the European Union which had accused the United States of illegally subsidizing its export firms2 . Washington hurried to block the latest request by Canada on June 20th, asserting that there was “no basis” to claim that “almost every aspect of its agricultural program has distorting effects on international markets”…But Brazil is on the offensive again: the minister of foreign affairs in fact announced on July 11th that Brasilia has filed a new petition, parallel to the one sponsored by Canada, demanding the start of bilateral consultations with the United States.
On a national level, proposals for reform are pouring in, from the Department of Agriculture, the USDA, as well as from several congressmen. Each one reaches the same conclusion: the 2002 Farm Bill cannot be maintained in its current form. Among other points, the system for releasing and distributing aid is being questioned: the 16 billion dollars allocated to American farmers in 2006 only benefited a small percentage of farmers and major corn, soy, wheat, rice and cotton operations are privileged to the detriment of more modest family farms. Moreover, the system of traceability and identification of food products3 is still encountering serious operational problems, causing increased public concern since the outbreak of a health crisis involving Chinese products that has rocked the country over the last few months4. However, members of an 18-member congressional subcommittee in charge of agricultural issues voted unanimously, on June 19th, to extend the current Farm Bill for five more years and even to increase support for cotton by 4%…
In this light, an extreme overhaul of the system adopted by the American congress, and at the same time a favorable outcome for the Doha Round, seem unfortunately to be more and more of a pipe dream. 1 See the MOMA article devoted to the 2002 Farm Bill : X-Ray of US subsidies to agriculture, published on March 3rd 2006 in the section Learn and Understand
2 Foreign Sales Corporations (FSC)
3 Country-of-Origin-Labeling (C.O.O.L.), law voted in 2002 applying to fresh fruit and vegetables, red meat, fish, seafood and peanuts.
4 See the article Regulations to limit the export of health risks, published on May 11th 2007 in the section A look at the news |