USDA chief wants Congress to reshape farm supports

Lawmakers rewriting US farm policy next year cannot ignore international legal challenges to the $20 billion-a-year farm support program, the government's top agriculture official said on Tuesday.
US Agriculture Secretary Mike Johanns said he would not advocate dramatic cuts in farm subsidies, but would push for reshaping of current payments to meet World Trade Organisation (WTO) rules.
"We're not going to have the WTO write our farm policy," Johanns told reporters. But any farm legislation passed next year "needs to be predictable, it needs to be equitable, it needs to be beyond challenge," he said. "We certainly don't want to do something that pulls the rug out from underneath cotton growers and rice growers," said Johanns, who is expected to make farm bill recommendations early next year.
Subsidies should be a hot topic as the US Congress - under Democratic control come January - gears up for a new farm bill. Johanns said he was encouraged that some Democratic leaders have come out in favour of writing a new farm bill, rather than simply extending the current law.
A successful WTO challenge of US cotton subsidies from Brazil, a major agricultural exporter, has shaken the US farm community. The 2004 verdict prompted the United States to reduce some supports for cotton producers, and was seen as opening the door to other, similar challenges.
The WTO is examining whether the United States has done enough to comply with its ruling. Developing countries say their farmers get squeezed out of lucrative US and European markets by government subsidies to domestic growers. This complaint was a major reason that the WTO suspended the Doha Round of world trade talks in July.
Johanns said the United States would work to fend off legal challenges, but said they were "not going to go away." Options could include perhaps increasing direct payments, conservation programs, even some trade-distorting subsidies. But if the United States fails to heed the precedent set by the Brazil case, Johanns said, it risks more legal challenges, which could decimate some agricultural sectors.
He pointed to the US cotton industry, which sells 80 percent of its crop overseas, and to the rice industry, which exports 50 percent of its production. Johanns said he did not expect Democrats, who took control of both houses of Congress in midterm elections last week, to propose radical changes in farm policy.
"I don't think we are anticipating that because Democrats are now chairing the relevant committees that somehow farm policy changed overnight. Farm policy tends to be more evolutionary than anything," he said.