ANNOUNCEMENT 13 May 2013

In May 2013, the US Congress considered a new farm bill.

NUMBER OF INTERVENTIONS

1

  • 0 harmful
  • 1 neutral
  • 0 liberalising

SOURCE



The Washington Trade Report.

Inception date: No inception date

Production subsidy

The agriculture committees in both the U.S. House of Representatives and the Senate are developing new farm bills to replace the previous (2008) farm bill. Each of them approved their versions in the week of May 13, 2013. The two bills are very similar although not identical, and the differences between them - after they each have been further modified on the floors of their respective chambers - will need to be reconciled in a House-Senate conference committee before being approved by Congress as a whole and sent to the president for his signature.
Several items in these bills are trade-related, some of them restrictive and others liberalizing. Chief among these in the Senate version of the bill are as follows:

  • The bill replaces two dairy price-support programs, the Dairy Product Price Support Program (DPPSP) and the Milk Income Loss Contract Program (MILC), with differently structured programs. The Dairy Production Market Protection Program (DPMPP) is a voluntary program that protects producer margins equal to the difference between the all-milk price and a national feed cost. For small and medium-sized farms, additional margin protection is offered on the first four million pounds of milk marketed (the annual production of approximately 200 cows). The Dairy Market Stabilization Program (DMSP) promotes growth while encouraging producers who participate in DPMPP to scale down production when the market is oversupplied.
  • The bill continues the protectionist sugar program through 2017 without any changes.
  • The bill seeks to bring the United States into a measure of compliance with the WTO finding on the US upland cotton marketing loan program. Brazil, the victorious complainant in the dispute, agreed to accept annual payments to its cotton farmers from the United States as a temporary measure until the United States came into compliance with the ruling. The ruling found that the Export Credit Guarantee Program (GSM-102), a program that guarantees export finance credits for exports of US agricultural products to countries where financing might not be available, is an illegal export subsidy. In order to come into compliance with the ruling, the bill would reduce current levels of export credit guarantees from $5.5 billion to $4.5 billion.
  •  Other export trade programs are continued. The bill continues the Market Access Program, which provides matching funds to promote US agricultural products in overseas markets. It also continues funding the Foreign Market Development Program, which provides matching funds to commodity or trade associations to help promote foreign demand or expand export markets for US agricultural products. It also continues to fund the Emerging Markets and Facility Guarantee Loan Program. The bill also continues and amends the Technical Assistance for Specialty Crops program, providing financial assistance to producers and exporters of specialty crops to overcome barriers to trade for their products abroad. The bill amends the purpose of the program to ensure specifically that funds can be used to help overcome technical barriers to trade, including regulatory requirements.
  • The bill would establish within the Agriculture Department of the position of Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs. The position would require Senate confirmation; all international trade functions for imports and exports of agricultural products under the purview of the Agriculture Department would be the responsibility of the new Under Secretary.

The version of the bill approved by the House Agriculture Committee likewise includes trade-related provisions. It retains the current sugar program with no changes, adopts similar language to the Senate bill on dairy programs, and continues marketing loan programs. Like the Senate bill, it specifically reduces marketing loans for cotton to bring the United States into compliance with the WTO ruling. The bill also includes a provision to repeal the US Department of Agriculture (USDA) catfish inspection program. This program was originally established in the last farm bill as an oblique way of impeding imports of catfish from Vietnam. Most seafood inspection is conducted by the Food and Drug Administration, which is part of the Department of Health and Human Services. The special catfish inspection program to be administered by the USDA's Food Safety and Inspection Service (FSIS) requires setting up a new bureau; the agency is still in the process of doing so.
 

AFFECTED PRODUCTS

 
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