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EU Says Wanted US Farm Bill To Cut More Subsidies February 1, 2007

Posted by notapundit in World News.
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BRUSSELS (Dow Jones)–The European Commission expressed disappointment Thursday at a U.S. plan to overhaul subsidies to its farmers, saying “more ambitious cuts” are required to relaunch a stalled round of global trade talks.

An initial White House proposal to Congress on how to reform the U.S. Farm Bill will make “extremely modest” cuts to loan deficiency payments and will allow payments to dairy and sugar farmers “virtually untouched,” said E.U. farm spokesman Michael Mann.

He warned a drop in farm prices will see trade-distorting farm support rise once again.

“The U.S. will need to propose more ambitious cuts and disciplines,” Mann said.

“We had hoped the Administrations’ proposal for the new Farm Bill would signal this more clearly,” he added.

The U.S. initiative would put total farm spending over the next five years at $87 billion, down $18 billion from the total spent by the U.S. on basic programs and disaster assistance over the last five years.

It would increase spending on conservation initiatives – a method of cutting direct production subsidies also employed by the E.U. in its own farm-payment cuts. It would also put more emphasis on making payments to farmers that aren’t tied to production.

Trade and development advocacy group Oxfam Wednesday praised the Bush administration for attempting to steer U.S. farm policy “in a new direction.”

The farm plan also foresees allowing farmers to grow fruit and vegetables on land eligible for subsidies. The plan, which underlines a growing desire in Washington to cut U.S. dependence on fossil fuels and simultaneously guarantee farmer income, reserves $2.1 billion in loan guarantees for plants that make ethanol fuel from wood chips, grasses and feed stocks other than corn and provides $1.6 billion to research non-corn sources of ethanol.

By Juliane von Reppert-Bismarck, Dow Jones Newswires

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