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U.S. farm programs overhaul may be delayed


Tue Jul 25, 3:40 AM ET

WASHINGTON - The prospect of overhauling U.S. farm programs next year dimmed with the collapse of global trade talks in Geneva.

Unable to find agreement on farm supports and trade barriers, WTO members on Monday suspended talks aimed at liberalizing trade and lifting millions of people out of poverty.

Farm programs in the U.S. are due for renewal next year, and as negotiations dragged on in the Swiss city, the idea of simply keeping the current programs in place had picked up steam.

The alternative would be to reduce support under the current system, which overwhelmingly benefits growers of five major crops — corn, soybeans, wheat, rice and cotton.

With other countries refusing to significantly lower trade barriers or cut supports to their farmers, U.S. lawmakers have been reluctant to make any changes that would put agricultural producers here at a competitive disadvantage.

"You have to look at the negotiating leverage that could be lost if we go ahead and write a farm bill that cuts back on commodity supports," said Mary Kay Thatcher, a lobbyist for American Farm Bureau Federation.

More than two dozen lawmakers have proposed a one-year delay in changing farm programs. Farm Bureau hasn't taken a position yet, but Thatcher said: "I think this will probably cause a lot of groups to look at that extension for a second time."

The suspension in talks — with no new deadlines for negotiators to meet — makes it tough for the Bush administration to talk lawmakers out of simply extending farm programs, said Gary Hufbauer, a trade expert at the Institute for International Economics, a Washington think tank.

"Actually, an extension into 2008 was very likely, anyway," Hufbauer said. "What it means more definitely now than previously is that a phaseout or modification of subsidies won't really start taking place until 2009 or 2010."

The Bush administration wants farm programs changed to distribute dollars more fairly. Officials frequently mention, for example, that fruit and vegetable growers don't get subsidy checks even though their crops are worth as much as the subsidized crops.

The lion's share of subsidies go to a small percentage of farmers, and most American farmers don't get subsidies at all, Agriculture Secretary Mike Johanns told reporters on a conference call Monday from Geneva.

"It seems to me we should avail ourselves of the opportunity to look at farm policy, and the opportunity will be before us next year," Johanns said.

U.S. farm programs have already come under fire within the WTO, which last year ruled some cotton subsidies illegal in a case filed by Brazil. More disputes are expected.

Even so, Congress has resisted the administration's ideas about change. Lawmakers last year rebuffed an attempt to limit payments by closing loopholes that allow some growers to collect millions of dollars in subsidy payments.

"If I read the tea leaves, I think we're going to end up with a (farm) bill that looks a lot like what we have now," said Rep. Collin Peterson (news, bio, voting record) of Minnesota, senior Democrat on the House Agriculture Committee.

Peterson is backing a one-year extension. "We've heard from farmers all over the country; I can't see any real good reason to significantly change it," he said.

Georgia Sen. Saxby Chambliss (news, bio, voting record), chairman of the Senate Agriculture Committee, said he would prefer to give farmers more certainty about their finances than a one-year extension would bring. But he is open to an extension.

"However, we think it is possible to write a farm bill that would include the possibility of extending the current farm bill, or at least some portions of the current farm bill, for some period of time if there is no agreement coming out of the WTO," Chambliss told reporters Monday in Iowa, where his committee held a forum on the next farm bill.

Those who want major change said the breakdown in trade talks was not good.

"It probably makes it a little harder on the margins," said Cal Dooley, a Democratic former congressman from California who now heads the Food Products Association, an industry group.

Food manufacturers are part of a developing coalition that includes fruit and vegetable growers, livestock producers, conservation groups, nutrition groups and others.

"It's obvious we have to put together a coalition that can overcome the entrenched politics of our farm programs," Dooley said.

___

EDITOR'S NOTE: Associated Press writer Amy Lorentzen in Des Moines, Iowa, contributed to this report. Libby Quaid covers food and agriculture for the AP.




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