Thanks to the efforts of a few hundred zealous rock stars, throngs of Generations X-ers and President Bush--food aid and the future of farm program payments in the United States are the subject of international news media as a result of the recent G8 meetings in Gleaneagles, Scotland.

Because of the hubbub surrounding the G8 meeting, international media coverage and festival-style concerts helped the rest of America recognize what farm country has always known: that American agriculture is tremendously efficient and the impacts of this productivity is felt around the world. Furthermore, because of this wealth we have the fragile responsibility of sharing our wealth, most notably food, with those less fortunate.

But, in the whirlwind of interview and televisions appearances, President Bush made startling comments regarding the U.S. desire to eliminate farm subsidies. Calling it a challenge to the core of European Union (EU) agriculture--the Common Agriculture Policy (CAP)--President Bush said the U.S. would be willing to eliminate domestic farm program subsidies if the EU eliminates the CAP. These comments garnered support from poverty and international aid proponents--both of which are typically critical of the Administration. However, his comments have invited speculation regarding the future of our domestic farm programs.

Without clarifying his comments during the G8 meeting, President Bush has left it up to senior staff and spokesmen to clarify his desire to eliminate American farm programs. Further, it has left many commodity groups in Washington wondering just what 'eliminate' means as they begin efforts to mobilize folks for farm bill discussions. In particular, some have interpreted President Bush's comments as a shift in the U.S. position in the current round of agriculture negotiations in the World Trade Organization (WTO) negotiations.

Under the leadership of the WTO agriculture negotiations chair, Tim Grosser, members had hoped to solidify a proposal regarding the future of world agricultures subsidies, tariffs and export policy by the December meeting of the WTO Ministerial in Hong Kong.

The U.S. Trade Representative (USTR), which represents the U.S. in these WTO negotiations, has made it clear that President Bush's comments reinforce the position of American negotiators. Working to winnow down the areas of controversy, negotiators in the WTO are working to solidify an approach towards reducing inhibitors to export competition, decreasing tariffs and addressing domestic support programs in participating countries.

USTR supports that the U.S. position has always been to provide significant reform to international subsidies and tariff rates--but that these changes must be made in tandem with one another. While it is the goal of both the U.S. and the EU to move in this direction, the EU opposed American reform proposals. Understanding this dynamic seems to support USTR's interpretation for President Bush's comments.

However, disputes in the WTO negotiations are not limited to the EU and the U.S. Perhaps the most significant factor in determining the ability for the WTO to move forward is the so-called group of 20 (G20) developing countries, including Brazil, that oppose proposals from the developed nation proposals of the EU, Japan and the U.S. Without question the G20 entertained the possibility of eliminating American farm program payments, as they point to such programs as the cause of lower world market prices for commodities and argue these distortions perpetuate their reliance upon international food aid and domestic assistance. And while President Bush's comments were considered a challenge to the EU--it is quite possible that the G20 listened closely and when negotiators do not include a virtual elimination of our farm programs, they could accuse of the U.S. of making empty promises.

That in mind, the future of the WTO agriculture negotiations are cloudy. The only thing that is certain is that much debate and significant compromise is in order from both the developed and developing countries. After all, compromise involves both sides giving a little.

Date: 7/20/05