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US Farm Bill – EU Critical

  • February 2nd, 2007
  • Posted by 7thmin

us-flag-reduced.gifA proposed new American Farm Bill offering reductions in some areas of agricultural support has drawn a negative first response from the European Union.

A spokesperson said (1.2.07) a reading of the 183-page document had not provided a clear view of what the Unites States might put forward, in efforts to re-start the Doha Round trade negotiations – suspended last July.

Points later released by the European Commission:

• We note a modest shift towards more “green” direct payments. We are examining the proposals on Counter-Cyclical payments to see if they offer any genuine improvement.

• Cuts in Loan Deficiency Payments – the basic safety net of the 2002 Farm Bill – are extremely modest.

• Key trade distorting programs for dairy and sugar remain virtually untouched.

• The proposals assume that commodity prices will remain at their current high levels. If so, US farm support will be lower. But if price trends change, trade distorting farm support would rise again under these proposals.

The spokesperson said:

“If we are to have a successful outcome to the Doha Round, the US will need to propose more ambitious cuts and disciplines in trade-distorting domestic farm subsidies.

“We had hoped the Administration’s proposal for the new Farm Bill would signal this more clearly; but this is not the end of the story: further steps are not precluded by these initial proposals.

“We in the EU are already going through a painful process of reform, which allows us to offer to cut our trade-distorting domestic farm subsidies by 70 percent.

“There is a clear obligation on all of us in the developed world to move decisively in this direction.”

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