| Author (Person) | Bower, Helen |
|---|---|
| Publisher | ProQuest Information and Learning |
| Series Title | In Focus |
| Series Details | 15.7.02 |
| Publication Date | 15/07/2002 |
| Content Type | News, Overview, Topic Guide | In Focus |
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On 13 May 2002 President Bush signed the United States farm bill, officially called the Farm Security and Rural Investment Act of 2002. The farm bill is set to have broad implications on worldwide agriculture and it has been met with much criticism from other countries around the world. For the European Union, the decision by the US government to increase payments to US farmers over the next decade comes at a time when the European Commission is seeking to reform the EU's controversial Common Agricultural Policy and switch direct subsidies from production to food quality and environmental protection. Franz Fischler, European Commissioner for Agriculture and Rural Development, has widely criticised the move by the US, saying:
The 2002 US farm bill replaces the 'FAIR Act of 1996' and sets out various agricultural programmes under 10 titles, notably the commodity (farm subsidy) programmes, conservation and trade. The bill will last for six years, during that time the projected spending on commodities is expected to be around $15-20 billion per year for crops alone, which represents a 70% increase on the amount foreseen at the end of the FAIR Act. If, as many believe, the US Farm Bill has a price-depressing effect on world markets then the cost is likely to be higher because of the increased subsidies payments. The key provisions of the bill are as follows:
Conservation is also covered in the bill with the provision for two new environmental programmes, costing a total of $2.25 billion, aimed at increasing the environmental care for the land and improving the protection for grassland areas. Other conservation programmes such as the Environmental Quality Incentive Programme (which pays farmers who make environmental investments to their land), the Conservation Reserve (a long-term set-aside/retirement programme), the Wetlands Reserve and Farmland Protection are all expanded and continued. While the expansion of conservation programmes in the US farm bill is certainly a positive step, countries around the world are concerned about the increase in direct payments provided for in the bill. The United States exports as much as 25% of its farm production, rising to over 40% for some commodities, like wheat and the new counter-cyclical programmes could result in those exports being cheaper and thus subsidised onto the world market. Cheaper domestic prices in the US also make these markets more unattractive to potential importers, particularly those from developing countries while the in the US some industrial consumers will benefit from cheap raw materials, for example livestock producers have access to cheap feed, while industrial processors, such as ethanol and sweetener factories, have cheap raw materials. The EU, which is normally criticised for its farm subsides, argues that the US is moving in a different direction to the rest of the world when it comes to agricultural policy. While the number of EU export subsidies is falling (from 25% in 1992 to 5% in 2002), the US is set to increase these payments and these do not respect the World Trade Organisation agreement obliging members to agree disciplines for use of subsidised export credits. Australia, Canada and Brazil all share the EU's opinion of the farm bill, condemning it as trade distorting and likely to endanger WTO trade liberalisation talks on agriculture. All these countries also fear that developing countries, which depend on farm exports, will be hit particularly hard by the new bill. As Franz Fischler noted in his response to an article by the United States Department of Agriculture Secretary, Ann Veneman, in the Financial Times:
It is for reasons such as these that the EU has made it quite clear that it opposes the US farm bill. The European Commission will continue to press ahead with reform of the Common Agricultural Policy which will take the emphasis off production and move it onto food quality, environmental protection and animal welfare. Links: European Commission:
US House Committee on Agriculture: United States Department of Agriculture (USDA): European Sources Online: European Voice:
European Sources Online: Financial Times:
European Sources Online: Topic Guide:
Helen Bower The United States Farm Security and Rural Investment Act of 2002, unofficially known as the US Farm Bill, was signed by President Bush on 13 May 2002. |
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| Subject Categories | Business and Industry |
| Countries / Regions | United States |
