Fed: Government claims small victory over US farm bill

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Fed: Government claims small victory over US farm bill

By Max Blenkin

CANBERRA, Feb 15 AAP - The Australian government today claimed a small victory overthe United States farm lobby with the latest US farm bill lasting five years rather thanthe feared 10.

Trade Minister Mark Vaile said he was pleased the US Senate, which passed the billovernight, had taken note of Australia's objections.

Mr Vaile said he had lobbied senior US officials during his visit to Washington lastmonth and would continue to do so in future to head off any moves to extend subsidiesto additional commodities.

As originally proposed by the US House of Representatives, the bill would have run for a decade.

"A five-year farm bill would be consistent with the timeframe for the World Trade Organisation(WTO) trade negotiations launched in Doha last November," Mr Vaile said in a statement.

But that was about the only ray of light for Australian farmers.

Passed over White House objections, the bill is bad news for Australian primary producersand could still violate WTO rules for its excessive subsidies to US farmers.

Under the bill, grain, cotton and soybean subsidy spending will rise by $US5 billion($A9.72 billion) a year.

Mr Vaile said the government remained seriously concerned about the costly protectionistand trade distorting measures in the US legislation.

"The federal government does not want the new farm bill to adversely impact on exportopportunities for Australian farmers including by reducing global prices," he said.

"The provisions affecting our dairy and sugar sectors are of particular concern.

"The government is also concerned the new farm bill could also limit the flexibilityof the US to show strong leadership on agricultural reform in the WTO."

National Farmers' Federation deputy chief executive Lyall Howard said the White Househad objected to the bill and there remained hope for Australian farmers that a compromisebetween the Senate and House of Representatives versions would be less costly.

Mr Howard said the politics behind the bill was the mid-term Congressional electionsand the need for the Republicans to win back key farm states.

He said the US was adopting contradictory positions, advocating agriculture liberalisationthrough the WTO but doing the exact opposite at home.

"We need American leadership in this global trade round. In 36 months time we are goingto come out the other end with a deal on agriculture," he said.

"It has to be liberalising for agriculture because there can be no other progress unlessagriculture is dealt with.

"When they (the US) get a liberalising outcome from the Doha round, they have got tomake the adjustment back home.

"Heading off in the opposite direction now is only going to make it harder."

AAP mb/daw/cjh/sb

KEYWORD: US FARM AUST