All of this will be highly problematic for America's trade negotiators. Brazil has already won a World Trade Organization complaint against the U.S. for providing illegal subsidies to cotton farmers. That ruling allows Brazil to apply $4 billion in retaliatory tariffs on American goods. Several similar suits are pending against the U.S., and these complaints were filed before any of these latest hikes in price supports.

The giveaways are so large that the House version is the first farm bill ever that would raise taxes to pay for it -- by $14 billion, mostly on the U.S. subsidiaries of foreign companies. This only discourages new foreign investment in the U.S. at a time when the weak dollar is already chasing it away. It's a sign of how insidious these welfare programs are that the Farm Bureau, traditionally an antitax outfit, recently signed off on the tax hikes in return for the subsidies.

Both bills also allow farmers to keep exploiting a loophole that lets them cash in twice. First, they can lock in loan subsidies at the lowest possible price for their crops; then later they can sell those same crops at a higher market price. The government pays the farmer the difference between the two prices, and the farmer gets the maximum price at market. Hence, when corn prices plunged in 2005 after a bumper crop and Gulf Coast supply disruptions after Hurricane Katrina, many farmers locked in an estimated $3.8 billion in subsidy payments at low prices. But they also cashed in when they sold the crops later after prices rebounded.

And speaking of cashing in, Congress has also spurned the Bush Administration's sensible proposal to establish a $200,000 income ceiling in order to receive subsidies. Instead, full-time farmers will be able to earn up to $1 million per farm ($2 million for a married couple) and still be eligible for a USDA handout. That means you can be in the top 0.2% in income in the U.S. and still get a subsidy check from Uncle Sam. Yet Robert Goodlatte of Virginia, the Republican who helped craft the House bill, says with a straight face that the bill is "real reform and a real safety net for the farmer." Yes, thank heavens for that millionaire safety net.

The only good news is that President Bush is threatening to veto this budget buster over its taxes, trade distortions and subsidies for the rich. The veto threat is at least causing the Members to think twice, and may actually improve the bill. But the best outcome would be if this monster died of its own, greedy weight.  Source

Write comment
Name:
Email:
Subject:
	Please input the anti-spam code that you can read in the image.

3.26 Copyright (C) 2008 Compojoom.com / Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved."