Passage of Farm Bill Illustrates WTO's Inability to Address All Agricultural Issues

On May 22, after over a year of debates, both houses of the U.S. Congress definitively passed the Food Conservation and Energy Act of 2008, despite President George W. Bush's veto. The new Farm Bill totals almost 300 billion dollars1 over the next five years. While the upcoming elections played in favor of maintaining support measures for farmers, the passage of the new Farm Bill nevertheless clearly illustrates that the WTO negotiations are entirely disconnected from reality and consequently have no effect on the policies of the world's leading agricultural power

The new bill maintains and increases subsidies for farmers, favoring regulation over free market operations. The U.S. Congress justifies this by pointing to the risks of falling agricultural prices coupled with rising prices for inputs. The bill also includes some new elements. One is the creation of a permanent agriculture disaster relief fund providing aid to farmers in the event of droughts or flooding. The 2008 Farm Bill also offers new protectionary measures against imports that will be applied to products such as sugar and milk. The U.S. cotton subsidies that brought WTO sanctions against the country have, for the most part, been maintained by Congress; this will inevitably affect the competitiveness of producers in developing countries, particularly in Africa.

The new Farm Bill is already drawing negative reactions from a "reluctant" George W. Bush, who criticizes its cost and, more importantly, from the WTO, which sees its own uselessness demonstrated by the bill's passage. For Crawford Falconer, agriculture negotiations chairperson, the Farm Bill is "another factor which complicates everybody's life." It will contribute to prolonging the current WTO deadlock since the actions taken by the U.S. Congress differ so greatly from its recommendations.

We therefore find ourselves today in a paradoxical situation in which the two leading world powers the United States and the European Union are following two opposing strategies: the former favors the maintenance of regulation and support mechanisms with no concern for WTO objectives, while the latter seeks to bring the Common Agricultural Policy in line with the complete liberalization of agricultural markets advocated by the WTO as demonstrated by recent European Commission proposals with no concern for food security or regulation.

The growing gulf between the Farm Bill, on the one hand, and the main lines of the future Common Agricultural Policy, on the other, confirm what momagri was already predicting in January 2008.2 It also raises a question that may at first glance seem naive but is actually quite troubling: who will be right in the end, the United States or Europe? The response is just as troubling. Neither of the strategies is completely convincing because each neglects an essential element: development and international cooperation for the Farm Bill, and food security and market regulation for the CAP.

That is why it is necessary to establish an International Agricultural Policy that would reconcile the food security of nations with free trade. Rising to this challenge is one of the objectives sought by momagri, which will soon publish its proposals regarding the principles of governance for this future international agricultural policy.