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Chicago task force to tout end of distorting subsidies
Illinois Correspondent

CHICAGO, Ill. — A Chicago think tank’s report says the 2007 Farm Bill should be consistent with market-oriented global trading objectives and should advance urgent public health and environmental objectives.

The bill should also provide a formula for economic prosperity for America’s farmers, according to the Chicago Council on Global Affairs (CCGA).

“The farm bill budget will likely be a smaller, zero-sum game in 2007,” said Robert Thompson, task force co-chair and former USDA assistant secretary for economics.

“Now more than ever, spending decisions must be driven by investments in the future of U.S. agriculture, the real needs of rural America, the national economy, public health and the environment.”

The CCGA report recommends ending “trade-distorting” farm subsidies, such as countercyclical payments, loan deficiency payments and marketing loans. The task force recommends replacing them with potentially less-costly programs to help agricultural producers weather price and yield fluctuations.

“If the European Union and the United States don’t take the lead in ending trade-distorting subsidies, developing countries and the WTO legal system will do it for both of us,” remarked Gus Schumacher, task force co-chair and former USDA undersecretary in charge of farm subsidy programs.

At least 20 percent of funds currently used for trade-distorting supports could be re-directed to rural public goods, such as infrastructure and agricultural research, the report says.

The report’s recommendations include revenue insurance covering all commodities, land stewardship rewards that pay producers according to the kind and amount of environmental goods and services they provide, and farmer savings accounts similar to 401(k) accounts that would be backed by government matching contributions.

“Ending subsidies that conflict with our trade obligations doesn’t have to mean an end to the farm safety net,” Thompson said. “Traditional subsidies can be replaced by programs recommended in this report that help farmers cope with business risks, while complying with our trade obligations and advancing future trade objectives.”

To read the report, Modernizing America’s Farm and Food Policy: Vision for a New Direction, visit the think tank’s website at

This farm news was published in the Oct. 11, 2006 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.