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Harkin: WTO offer could affect 2008 farm bill programs if trade talks succeed

The Chairman of the Senate Agriculture Committee said Thursday that the Bush administration's offer to Doha Round trade negotiations earlier this week to cut farm subsidies to no more than $15 billion a year could affect some programs in the recently enacted farm bill.

On Tuesday, U.S. Trade Representative Susan Schwab announced the offer at World Trade Organization Headquarters in Geneva, Switzerland. It's a new low from a previous offer to cap farm payments at $17 billion.

The Ag Committee Chairman, Democrat Tom Harkin of Iowa, welcomed the possibility of progress in the stalled trade talks, but added that "In order to reach a successful Doha Round agreement, this proposal must be met with comparable initiatives on the part of other key WTO members in the areas of agricultural and industrial goods market access."

Harkin said that the $15 billion limit in possible payments would represent a cut from about $40 billion a year if all subsidies, including crop insurance, are included. If only the most trade-distorting "amber box" payments such as counter-cyclical payments and marketing loans are included, Schwab's offer would drop from the current cap of $19.1 billion a year cap to $7.6 billion.

Harkin said that with current high commodity prices, those traditional safety net programs might not be affected if the lower limits are accepted and a WTO agreement is reached.

However, others could be.

"Things like ACRE could be affected," Harkin said. "The MILC program could be affected and probably some others, too."

ACRE, or Average Crop Revenue Election, is a new program based on a combination of state revenue guarantees and individual farm revenue. The Bush administration cited its potential cost of up to $10 billion as one reason for opposing the farm bill. Payments are tied to specific crops.

MILC, or the Milk Income Loss Contract program, compensates dairy farmers when milk prices are low.

Harkin, who was a strong supporter of ACRE in the farm bill, said that the direction of the Doha Round negotiations shows why he favors so-called green payments, which aren't tied directly to crops and would not be affected by potential cuts in subsidies through trade negotiations or trade litigation.

"I think what it really shows is that we need to shift our support for agriculture into other areas," he told reporters Thursday. Such green payments include those for conservation programs such as the Conservation Stewardship Program (CSP) and the Environmental Quality Incentives Program (EQIP).

Harkin said that some countries involved in the Doha Round want even greater concessions from the U.S. on farm subsidies.

Even if the talks do go anywhere, a new agreement would have to be approved by Congress. Harkin said that he thought a new WTO agreement would have more support than trade agreements negotiated with individual countries such as Colombia. It could come up for a vote in September but Harkin said it's more likely to be an issue for the next administration.

The Chairman of the Senate Agriculture Committee said Thursday that the Bush administration's offer to Doha Round trade negotiations earlier this week to cut farm subsidies to no more than $15 billion a year could affect some programs in the recently enacted farm bill.

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