The World Trade Organization should be given the opportunity to finalize a new trade agreement before Congress begins the arduous task of writing the next farm bill, the president of the American Farm Bureau Federation said today.
Bob Stallman, a rice and cattle producer from Texas when he’s not speaking for Farm Bureau, said that because Congress should know the outcome of the Doha Round of world trade talks before beginning a new farm bill, it should first extend the current legislation.
“This approach provides U.S. trade representatives the strongest negotiating leverage,” Stallman told members of the House Agriculture Committee. He was one of several farm organization leaders who testified at a hearing on the new farm bill.
“The outcome of the negotiations, particularly as they relate to domestic support commitments, must be known and taken into account before we begin crafting a new farm bill,” Stallman said in remarks prepared for delivery to the committee.
If Congress reduces domestic supports – as the Bush administration has proposed – “we have less leverage to use to convince other countries to reduce their tariffs and export subsidies,” he said. “Our strongest negotiating leverage is to maintain our current programs until we agree to a WTO round that is beneficial for agriculture.”
Referring to the dispute over tariffs – the issue which led to the collapse of the Doha Round in July – Stallman noted that U.S. agricultural exports face an average foreign tariff of 62 percent in the world’s markets. The figure is more than five times higher than the average U.S. imposed agriculture tariff of 12 percent.
Additionally, the European Union uses 87 percent of the world’s export subsidies, which severely disadvantages U.S. exports. The U.S. utilizes only 3 percent and the rest of the world uses the remaining 10 percent.
“Farmers and ranchers are willing to lower farm program payments via WTO negotiations if—and only if—they can secure increased opportunities to sell their products overseas,” said Stallman. “However, we are not willing to unilaterally disarm.”
Beyond the international trade implications and the loss of negotiating leverage, Stallman said farmers have other reasons to seek an extension of the current farm bill.
“The 2002 farm bill was carefully constructed to provide support for commodity, conservation, nutrition and export promotion programs. Congress struck a balance in funding each of those programs and it works,” he said.
He also noted that the farm bill provides an adequate safety net to farmers and ranchers when commodity prices are low, and it continues to address the goal of producing a safe, abundant, domestic food supply.
Stallman encouraged Ag Committee members to take into account production expenses, such as fuel and fertilizer, which are expected to be much higher for the upcoming farm bill period. “With a significantly higher cost structure, and at a time when farmers are making investments to help secure our nation’s energy future, changing the farm bill would be detrimental,” he said.
“There is no question the existing farm bill is popular with farmers and ranchers throughout the country,” said Stallman. “Continued maintenance of its structure and funding is a high priority for Farm Bureau.”