January 20, 2020

Farm Bill: Budget & Trade Issues

I. Farm Bill Budget, Spending
II. Doha
III. Canadian (Brazilian?) Corn Case
IV. Johanns on the Farm Bill

I. Farm Bill Budget, Spending

Alexei Barrionuevo, writing in today’s New York Times, reported that, “With a costly war in Iraq, mounting budget deficits and record-high crop prices, administration officials said this week that farmers should expect to receive smaller agricultural payments in this year’s Farm Bill.

“But wait, say some Congressional leaders, who are clamoring for more dollars for farmers. More money is needed to accelerate research into biofuels like ethanol, which is considered crucial to reducing the country’s reliance on imported oil and for buttressing the Midwest economy.”

Photo by The New York Times

The Times article went on to explain that, “Amid soaring crop prices, fueled in part by global droughts and rising demand for corn-based ethanol, subsidies are expected to drop by $7 billion this year, to about $13.5 billion. Agriculture officials expect demand for corn in particular to continue to be strong as dozens of ethanol plants come online this year. That will mean farm payments are expected to be lower for at least a few years.

“In this new environment, some trade specialists see an opportunity for Congress to cement those savings by lowering the financing structure. That could give the United States greater leverage in negotiations at the World Trade Organization, which remain stalled over agriculture payments. Whether Congress will vote to lower those ‘baseline’ levels ‘is the question that a lot of discussion and debate will be devoted to over the next 30 to 60 days,’ Agriculture Secretary Mike Johanns said.”