Push on, despite talks

The Doha round of the world trade talks has been suspended and the U.S. has become the fall guy.

"The United States, I regret to say, showed no flexibility at all in the end, on the issue of domestic subsidies in agriculture," said EU trade chief Peter Mandelson.

That's an interesting statement considering U.S. Ambassador Susan Schwab and U.S. Secretary of Agriculture Mike Johanns offered what they called "sufficient flexibilities" in both trade distorting subsidies and increased market access.

Mandelson then offered no statement to what concessions the EU was willing to make. Probably because there wasn't much to talk about. The EU has the most heavily subsidized agriculture programs in the world. Johanns pointed to the EU's current 80 percent tariff on high quality beef. The EU has made an offer to reduce their tariff to a whopping 61 percent but because they would designate the product as sensitive, the rest of the world would be able to divide up 160,000 metric tons. "That's about two percent of their marketplace. That is virtually no market access," said Johanns.

The suspension of the talks is disappointing. The world's problems, including the American farmer's problems, won't be solved by trade exclusively. But we are living in a global society. Whether we like it or not, doing business around the world is linked more than ever with doing business on Main Street.

Trade balance should be the goal. It takes a balance between protecting your own and offering access to gain access. It would be foolish to abandon U.S. industries, including agriculture, to extinction. Doing so would endanger the U.S. economically at the very least.

The most significant and immediate result of the suspension for agricultural producers in the U.S. is what it means for the 2007 farm bill.

The U.S. should not sit back and wait for the world to tell them what to do in regard to the 2007 farm bill. But we shouldn't thumb our nose at them either.

We should be cognizant of making our policy as far away from market distortion as possible. This means continuing to move away from the "old ways" of subsidizing farmers. Measures that encourage conservation are much more palatable to Congress and the general public than a subsidy check they view as being a welfare check.

Some producers have wished for a one-year extension in the current farm bill, but that will only prolong the uncertainty.

The U.S. should push on toward a farm bill that, regardless of the outcome of world trade talks, is a sound long term plan.

Holly Martin can be reached by phone at 1-800-452-7171 ext. 1806 or e-mail at hmartin@hpj.com.

Date: 7/27/06

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