July 27, 2006

Keep $20 bln subsidy law: largest US farm group

By Charles Abbott

WASHINGTON (Reuters) - The largest U.S. farm group, the 6
million-member American Farm Bureau Federation, said on
Thursday it backed an extension of the current farm subsidy law
for "at least one year" as a response to the collapse of world
trade talks.

The 2002 law boosted crop and dairy supports by 67 percent
and is due to expire in September 2007. AFBF said extension of
subsidies averaging $20 billion a year would give growers "the
support they need to survive in today's contentious global
trading environment."

AFBF President Bob Stallman said the group also supported
immediate extension of the law that guarantees a prompt vote in
Congress on trade pacts. That is vital for pursuit of
beneficial bilateral and regional trade pacts, he said, or a
World Trade Organization agreement if talks resume.

"The time has run out" for a WTO agreement before Congress
overhauls farm law, Stallman told Reuters in an interview. "So
what we're saying is, we need to extend the current farm bill
for at least a year, maybe longer."

An extension would include modifications to ensure U.S.
farm supports are in line with WTO limits, including a WTO
ruling that mandates lower U.S. cotton subsidies.

That ruling could affect the price support mechanism for
wheat, feed grains and soybeans. It also could touch the
long-standing ban on growing fruit and vegetables on land
eligible for crop subsidies.

World trade talks collapsed on Monday amid complaints that
nations were not offering sufficient cuts in domestic subsidies
or market access. No date was set for resumption.

Leaders of the Senate and House Agriculture committees have
said they prefer a long-term farm bill, rather than a
short-lived extension. Senate Agriculture Chairman Saxby
Chambliss, of Georgia, said on Wednesday he wanted a bill
running at least five years.

"We're not precluding that," said Stallman. "We're saying
at least one year."

Until now, AFBF said the farm program should remain in
place until WTO negotiations were complete. Stallman's comments
marked the first time AFBF suggested a time span for an

"The rationale is pretty simple. You don't go into these
negotiations without leverage," said Stallman, adding that
robust farm supports were the leverage for getting other
nations to agree to reduce their trade-distorting subsidies and
to remove barriers to farm imports.