010312 Bush Says U.S. Will Fight Unfair Farm Subsidies

Washington - The United States will challenge unfair farm subsidies of other nations to make sure American growers have access to other markets, President George W. Bush said.

"Markets must be open," Bush said at a White House ceremony to swear in Agriculture Secretary Ann Veneman. "The United States will not tolerate favoritism and unfair subsidies."

Veneman, a California attorney, served as the No. 2 official at the U.S. Agriculture Department during the previous Bush administration.

Later this month, members of the World Trade Organization are to meet in Geneva to discuss farm trade proposals and plan an agenda for global talks.

The United States and the Cairns Group of 18 farm exporting nations have made the elimination of agricultural export subsidies a top goal for world farm trade talks now underway in Geneva.

The European Union, the biggest user of farm export subsidies, has said it would agree to negotiations on reducing export subsidies only if Washington's farm export credit programs were included. The United States has resisted that approach, saying the loan guarantee program is far less distorting than the EU's export subsidies.

"For many farmers the greatest challenge today is finding new markets for their products," Bush said. "Americans represent just 4% of the world's population, but our farmers have the technology and skill to feed much of the world beyond."

A recent report by USDA economists found that eliminating trade-distorting agricultural tariffs, export subsidies and domestic support programs around the world would save consumers an estimated $56 billion over 15 years.

The USDA report said that the European Union accounts for about 38% of the world trade distortion in farm goods, followed by the United States with 16%.

Bush also said for the first time that his administration would support emergency financial aid for American farmers, if needed.

"In times of emergency they will get the assistance they need, when they need it," Bush said.

Earlier this week, when the White House unveiled its fiscal 2002 budget request to Congress, no money was earmarked for farm bailout payments. Veneman said at the time that farm relief was one of the areas that could be funded by the $1 trillion reserve in the budget.

With grain and livestock prices slumping, Congress has enacted more than $24 billion in farm bailouts since October 1998. Some major farm groups have already said growers will need $9 billion in emergency aid this year to stave off bankruptcies and keep rural America afloat.

Senate and House agriculture committees have launched a series of hearings to explore what changes are needed in the five-year farm bill, which expires next year. The last farm bill sought to phase out most domestic subsidies and support programs, but many farm groups contend that the safety net was reduced too sharply.

Veneman offered no specific comments on farm trade or support programs during the ceremony.

"We have tremendous opportunities ahead of us and any challenges will be tempered by the fact that you understand that agriculture is at the heart of the economy," she said, referring to Bush.

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