|By TIM ALEXANDER
WASHINGTON, D.C. — Testifying before Congress Sept. 20, AFBF president Bob Stallman said a World Trade Organization agreement is essential before the organization would consider changing parts of the farm bill. Stallman told Congress that the outcome of world trade talks must be known before a new farm bill can be considered.
“This approach provides U.S. trade representatives the strongest negotiating leverage,” Stallman said. “If we reduce our domestic supports in an upcoming farm bill debate, we have less leverage to use to convince other countries to reduce their tariffs and export subsidies. Our strongest negotiating leverage is to maintain our current programs until we agree to a WTO round that is beneficial for agriculture.”
AFBF said foreign tariffs are around five times higher, or 62 percent, on U.S. agricultural exports than the average imposed U.S. tariff of 12 percent. The European Union uses 87 percent of the world’s export subsidies, causing a severe disadvantage for U.S. exporters, while the U.S. uses only three percent. The rest of the world uses the remaining ten percent.
“Farmers and ranchers are willing to lower farm program payments via WTO negotiations if- and only if - they can secure increased opportunities to sell their products overseas. However, we are not willing to unilaterally disarm,” Stallman told Congress.
He went on to say that beyond the international trade implications and the loss of negotiating leverage, other factors exist that call for extending the current farm bill.
“The 2002 farm bill was carefully constructed to provide support for commodity, conservation, nutrition and export promotion programs. Congress struck a balance in funding each of those programs and it works,” Stallman said, noting the farm bill provides an adequate safety net when commodity prices are low and helps further the goal of producing a safe, abundant domestic food supply.
Stallman said AFBF members should take into account production expenses, such as fuel and fertilizer, which are expected to continue to rise in cost during the span of the next farm bill.
“There is no question the existing farm bill is popular with farmers and ranchers throughout the country. Continued maintenance of its structure and funding is a high priority,” he said.
On Sept. 21, the House Agriculture Subcommittee on General Farm Commodities and Risk Management convened a hearing to continue to review federal farm policy in anticipation of reauthorizing the 2002 Farm Bill in 2007. They heard from five university agricultural economists on the role farm economics play in shaping the new farm bill. The witnesses did not recommend a simple extension of the current farm policy, citing greater potential for de-coupled payments, the influence of trade talks, payment limitations and the relationship between commodity supports and crop insurance.
“If what we want is a simple program that provides a safety net under farm income with minimal market distortion, the answer isn’t rocket science- a de-coupled direct fixed payment. This, I will submit, is what the Doha Round is all about, and that failure of those talks will lead to more, rather than less, market distortion, more, rather than less, need for commodity programs,” one university ag economist told the panel.
On Sept. 26, the House Subcommittee on Livestock and Horticulture met with representatives from the U.S. specialty crop industry over a variety of issues facing the industry including the need for research, the role of the crops in renewable fuels, nutrition, risk management tools, and conservation and market access.
“I would like to commend the specialty crop industry for building a coalition and working together on farm bill initiatives,” said Subcommittee Chairman Rep. Robin Hayes. “Given the diverse nature of this industry, I appreciate your efforts to come together and agree on some consensus policy recommendations.”
Subcommittee Ranking Member Ed Case pointed out that specialty crop growers produce about half of the total value of U.S. agriculture, yet receive a fraction of the support received by program crop growers.
“While most specialty crop producers aren’t looking for subsidies, they do need assistance with agricultural research, pests and diseases, marketing and infrastructure development. It is critical that we insert some equity for specialty crop producers in the next farm bill,” Case said.
This farm news was published in the Oct. 11, 2006 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.