US Farm Bill fails to provide genuine reform

22 Dec, 2008 09:09 AM
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THE 2008 US Farm Bill fails to provide genuine reform while strengthening agricultural protectionism for US farmers, according to the Australian Bureau of Agricultural and Resource Economics.

ABARE’s analysis of the 2008 US Farm Bill was detailed in a special report released on Monday, “The 2008 US Farm Bill: what is in it and what will it change?”

ABARE Executive Director Phillip Glyde said the new US Farm Bill represented a lost opportunity to bring meaningful and beneficial reform to US agricultural policies.

The new US Farm Bill was passed in May 2008, at a time of high market prices and record farm incomes for US farmers.

The Bill provides policy directives and sets down support prices and arrangements for the period from 2008 to 2012.

ABARE said the Bill strengthens US agricultural protectionism at a time when there was an opportunity for real reform.

The Bill contains increased support opportunities for most major crops, greater certainty for disaster relief, extension of payment thresholds for dairy, and sugar arrangements that minimise imports.

Mr Glyde said the changes in the Bill extended the opportunities for US farmers to receive government support, even in instances when market prices were well above historical support prices and the target prices set in the current Bill.

The buoyant market conditions when the Bill was developed might have been expected to provide an opportunity to reduce or eliminate the market distortionary effects of US farm protection with few adjustment costs, he said.

Mr Glyde said that in addition to being important for US farmers, the Bill was also important for farmers around the world including Australia, as US policies markedly affect world agricultural trade and prices.

“Most of the support under the Farm Bill is for the major grains, oilseeds, cotton, dairy products and sugar which together account for about 40pc of the total value of US agricultural production,” Mr Glyde said.

ABARE

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