The Bush administration put forth its farm bill proposal last week. Alan Beattie reports:

But as far as Doha was concerned, as one experienced agricultural policymaker in Washington put it: “There is less to this than meets the eye”.

The headline totals were compatible with, but did not go beyond, the cut in annual allowable trade-distorting farm subsidies from around $22bn to around $17bn (€13bn, £8.6bn) that the Bush administration has already informally offered in the Doha round.

Subsidy programmes that support prices, because they encourage farmers to produce more and hence push down world prices, are classified as “trade-distorting” under WTO rules and are subject to stricter limits. Despite the administration’s rhetoric that it was moving from supporting farmgate prices to protecting farmers’ incomes – the so-called “revenue assurance” principle – the proposed move was modest. The “marketing loan” programme, which subsidises farmers when the prices of their produce fall below a set level, altered the calculation of the price a little to take account of actual market prices, but the change will not be dramatic.

Similarly, a controversial programme called “counter-cyclical payments”, which compensates farmers when prices are low, was adjusted to take account of national crop yields as well as prices, but the change was incremental. The US has sought to classify the counter-cyclical payments as being only somewhat distorting of trade and hence enable them to continue under a Doha deal.

Mr Johanns has repeatedly warned US farmers that the alternative to agreeing reform is to see US agricultural subsidies litigated away piece by piece under the WTO’s dispute resolution mechanism. The US is seeking a renewal of the so-called “peace clause”, under which countries agree not to bring cases against each other over farm subsidies, in the Doha negotiations, but has run into stiff opposition from Brazil, which won a landmark victory against the US cotton subsidy programme in 2005.