Friday, February 7, 2014

Obama signs farm bill

United States President Barrack Obama has signed a deal to spend almost $1 trillion on a new five-year farm bill.

About 80 per cent of that is not for farmers, but for food stamps and other subsidies under the Supplemental Nutrition Assistance Program (SNAP).

The farmer portion of the legislation takes away “direct payments” that went to farmers on a per-acre basis, regardless of what they did or did not grow on the land, but increased subsidies for crop insurance and price-support levels for rice and peanuts.

The “direct payments” program was initiated seven years ago to comply with a World Trade Organization requirement that subsidies not encourage over-production of a specific commodity.

At the time there was global concern that U.S. farm subsidies led to over-production which was dumped into global markets at depressed prices, making it difficult for farmers in other countries to realize a reasonable return for their farming efforts.

The U.S. is among a number of wealthy countries that is standing in the way of a new world trade agreement that would improve the global market for poor farmers in poor countries.

The U.S. wants improved access to markets for its financial services and manufactured goods. Others, such as India, are resisting that pressure which comes not only from the U.S., but also others.