April 24, 2006

US senator backs extending farm bill, trade power

WASHINGTON (Reuters) - A top United States legislator said
on Monday he supported ideas circulating in Congress to extend
for one more year current U.S. farm program payments and trade
promotion authority, which lets the White House put trade
agreements to a straight yes or no vote.

Congress reworks U.S. farm legislation roughly every five
years. The 2002 bill is now up for debate, but world trade
talks on reforming agricultural subsidies -- which could shape
the new U.S. law -- have stalled.

Trade promotion authority is due to expire in July 2007.
Without it, any negotiated trade agreement put to Congress by
President George W. Bush would be open to amendments which
could change it materially or effectively kill it.

"There's been a bit of talk on the (Capitol) Hill of
combining a one-year extension of the farm bill with a one-year
extension of trade promotion authority. I think that would be a
very good thing to do," Sen. Charles Grassley, an Iowa
Republican, told commodity groups at a business lunch address.

"Do I think we're better off with a one-year extension? If
we could get trade promotion authority and get a (World Trade
Organization) agreement the answer is yes," said Grassley, who
is chairman of the Senate Finance Committee.

Washington's so-called farm bills update U.S. farm supports
and export programs. The 2002 bill boosted crop and dairy
subsidies by 67 percent to around $20 billion. However, parts
of it have been challenged at the WTO by other countries on the
grounds that the payments unfairly distort trade, and some U.S.
lawmakers are concerned that unless it is overhauled the United
States will remain vulnerable to legal challenges.

Grassley said there was broad support, however, for a
short-term extension of the bill.

"There's some bipartisan support related to the farm bill.
I think it's ... to protect the present level of expenditure
... not necessarily a policy," he said.

"The chances of getting it done this year? We've got five
months of session but there's not going to be much done in
those five months. It seemed to me as probably something that
would come up early in 2007," Grassley added.