Bush administration proposes cutting farm subsidies

Washington, Feb 1 (UNI) The Bush administration has proposed reduction in its farm support programme over the next five years by tying commodity subsidies to farmers' incomes.

The measure would allow the US Department of Agriculture (USDA) to continue to meet its World Trade Organization (WTO) commitments, officials said.

''The new farm bill which the administration has sent to Congress intends to make the farmers more competitive in the global agriculture marketplace while tightening spending,'' Agriculture Secretary Mike Johanns told newsmen here yesterday.

He said that the proposed farm bill would increase spending for some specialty crops, agricultural research and conservation programmes but overall it would result in a 10 billion dollar savings from the amount spent on farm programmes during the previous five years, excluding disaster aid funds.

Savings would be achieved, in part, by making farmers who earn more than a specified income ineligible for farm support payments.

Instead, farmers would receive some income protection during periods when crop yield is low by linking payments to revenue rather than price. In this way, farmers suffering from such calamities as drought or floods would get more payments than they currently do under those situations.

''These proposals recognise the dramatic changes in agriculture since 2002 (when the current farm bill went into effect) and present policy ideas that are reform-minded and fiscally responsible and that provide strong support of agriculture in a global economy,'' Mr Johanns said in a letter to the heads of the House of Representatives and Senate agriculture committees.

The current farm bill expires at the end of the 2007 crop year.

It was developed when commodity prices were low, exports had decreased for five years and the US farmers were dealing with significant debt problems, Mr Johanns said.

''Now prices are strong for most commodity crops and exports have increased to a record 68.7 billion dollars in 2006. They are expected to reach 77 billion dollars in 2007,'' he said.

UNI