FarmPolicy

November 28, 2014

Farm Bill; Budget; Biofuels; Immigration; and, Ag Economy

Farm Bill

Brian Beary reported on Friday at Europolitics Online that, “Farm subsidies may be less divisive an issue today for EU-US relations than they were in the past, but they still feature on the radar. While from the 1990s, the EU and US converged somewhat in how they chose to subsidise their farmers, the latest US Farm Bill proposal, which will set farm supports for 2013-2017, reverses that trend. Some EU officials are watching with concern as the US prepares to abandon the so-called ‘direct payment’ model of subsidy that the US itself pioneered in the 1990s and which today is a key part of the EU’s Common Agricultural Policy (CAP). Direct payments have gained a bad reputation in the US, seen by some as giving public money to farmers for doing nothing, so Congress is set to jettison them, replacing them with more crop insurance subsidies. This could eventually set the EU and US on a collision course at the World Trade Organisation (WTO), which sets ceilings on subsidies that it deems to be trade-distorting. The crop insurance subsidies that Congress looks set to embrace would be classified as trade-distorting under WTO rules. So, if the US increases their use, it could be at risk of overshooting its subsidy ceiling should food prices rise.”

(more…)