The people of the First District of Minnesota, I think, can probably lay claim to one of the richest agricultural pieces of land in the entire world . . . I had 14 hearings throughout my district with universal acceptance of making sure the safety net is maintained . . . When I need advice on the farm bill, I go to a couple of good farmers in my district, Kevin Papp, president of the Minnesota Farm Bureau, and Doug Peterson, president of Minnesota’s Farmers Union. I don’t need to go to the ideologues at the Cato Institute or Club for Growth to know what’s good for rural America. [Tim Walz (D-MN)]

The result?

The House Farm Bill allocates $286 billion over five years to agricultural programs—that’s an even bigger price tag than the one attached to the bloated 2002 Farm Bill, which increased agriculture spending by 80 percent over 1996’s Freedom to Farm Act, itself a huge bill.

It continues the tradition of giving huge subsidies to wealthier farmers, though on a more limited basis than the 2002 Bill. Where the 2002 Bill dished out subsidies to farmers earning up to $2.5 million annually, this bill establishes an annual income threshold of $1 million, or $2 million if a husband and wife each claims subsidies. A slight improvement, at best.

I think the House successfully avoided the Cato Institute’s contaminating influence.

The people of the First District of Minnesota, I think, can probably lay claim to one of the richest agricultural pieces of land in the entire world . . . I had 14 hearings throughout my district with universal acceptance of making sure the safety net is maintained . . . When I need advice on the farm bill, I go to a couple of good farmers in my district, Kevin Papp, president of the Minnesota Farm Bureau, and Doug Peterson, president of Minnesota’s Farmers Union. I don’t need to go to the ideologues at the Cato Institute or Club for Growth to know what’s good for rural America. [Tim Walz (D-MN)]

The result?

The House Farm Bill allocates $286 billion over five years to agricultural programs—that’s an even bigger price tag than the one attached to the bloated 2002 Farm Bill, which increased agriculture spending by 80 percent over 1996’s Freedom to Farm Act, itself a huge bill.

It continues the tradition of giving huge subsidies to wealthier farmers, though on a more limited basis than the 2002 Bill. Where the 2002 Bill dished out subsidies to farmers earning up to $2.5 million annually, this bill establishes an annual income threshold of $1 million, or $2 million if a husband and wife each claims subsidies. A slight improvement, at best.

I think the House successfully avoided the Cato Institute’s contaminating influence.

CGD’s Kimberly Elliott attacks the farm bill that passed the House on Friday:

From an international perspective, the majority in the House did not just miss an opportunity for reform, they thumbed their nose at our trading partners, especially the poorest. The House farm bill provides increased support to cotton and sugar, two products of particular interest to African exporters, and it blithely ignores a World Trade Organization ruling that certain subsidies violate U.S. commitments. Such cavalier treatment of legally binding international obligations undermines the already dim prospect for completing the Doha Round. It also invites new challenges to U.S. policies in the WTO, which could result in retaliation against U.S. exporters. Brazil and Canada have already filed new WTO complaints against U.S. farm policies and final passage of the House would invite even more, while making the U.S. case even harder to defend. It is now up to the Senate to salvage both common sense for American farmers and taxpayers, and what is left of America’s reputation in the world.

I’m filing this under non-tariff barriers:

All cargo going into the US on ships would have to undergo thorough screening at foreign ports under new legislation agreed by key congressional committees, in a move attacked on Wednesday by the shipping industry as a recipe for chaos…

Erik Autor, vice-president for international trade at the National Retail Federation, said there would be significant technical challenges in meeting the bill’s requirements…

He questioned, for example, whether the Department of Homeland Security had the resources to examine promptly the millions of images that would be created annually of containers scanned at overseas ports.

“We still say that there are potentially a great deal of challenges in order to implement this mandate – and challenges that are not going to be overcome any time soon,” he said

Mr Autor warned the time taken to scan containers would slow down handling at many ports in a system already prone to congestion. [FT]

Is 100% screening feasible? See this really long article for details of the debate. I don’t see a definitive answer.

Dan Griswold describes the latest from the House Agriculture Committee:

Sadly, the new 2007 farm bill looks a lot like the old 2002 farm bill that is due to expire on September 30. No real changes were made in the Title 1 commodity programs that lavish production subsidies on farmers who grow corn, wheat, cotton, and other program crops. Trade barriers remain against imports of lower-priced sugar, rice, and dairy products.

I haven’t read the paper, but the abstract is interesting:

Brazil is found to account for nearly one-half of all the benefits to developing countries deriving from global agricultural trade reform. These gains are associated with improvements in the welfare of each group and a lower incidence of poverty. Large-scale producers gain more than smallholders as they tend to be relatively specialised in export products, but there are important gains to agricultural employees, who are relatively poor, and to urban households, who benefit from the expansion of the agro-food sector. Overall, there is no discernible impact on income inequality, and no evidence that the gains to commercial farmers occur at the expense of poorer households.

The WTO’s DSM is going to heat up a bit:

Brazil lodged its broadest attack against U.S. farm spending with a complaint at the World Trade Organization that may signal the start of a raft of litigation as hopes for an international accord dissolve…

The U.S. stayed below the $19.1 billion a year spending ceiling until 2001. Since then, the U.S. hasn’t provided spending figures to the WTO, Brazil says.

“Available public information indicates that the domestic support that the U.S. provided exceeded its commitment levels,” Brazil’s WTO ambassador, Clodoaldo Hugueney, wrote to his U.S. counterpart, Peter Allgeier.

I’ve seen scholarly work on this subject indicating that US payments have been below the allowed cap, so I do not know if Brazil has a strong case here.

Update: AP reports that the “United States spent only $11 billion on trade-distorting subsidies last year.”

Cotton subsidization is one of the West’s most egregious protectionist offenses, but John Baffes of the World Bank provides some important contextualization:

Cotton subsidies have received considerable attention during the past four years… four cotton-producing countries in West and Central Africa—Benin, Burkina Faso, Mali, and Chad—have requested that the Doha round of negotiations on trade liberalization contain financial compensation for WCA countries for as long as those Western subsidies remain in place. Brazil also brought a case to the World Trade Organization…

Western cotton subsidies should be abolished, but not much attention has been paid to another, perhaps more important, issue. Many African cotton-producing countries, especially in WCA, must reform their cotton sector…

[E]ven if cotton prices increase either as a result of elimination of subsidies or as a result of market forces, it will do no good to poor producers if such an increase is absorbed by bankrupt parastatals, debt-ridden cooperatives, or corrupt public officials unwilling to engage in serious reform efforts… the positive impact of the end of cotton subsidies on the welfare of West African cotton farmers will be limited unless it is accompanied by domestic reforms that should include privatization of the state-owned cotton companies and liberalization of the cotton trade.

Check out the short article, which is Cato’s latest Economic Development Bulletin (pdf), for discussion of six problems in the cotton sector that reformers need to address.

State censorship as a non-tariff barrier to trade?!? Oh boy.

[HT: Muse]

State censorship as a non-tariff barrier to trade?!? Oh boy.

[HT: Muse]