The Fight Over Farm Subsidies

This is the VOA Special English AGRICULTURE REPORT.

Two words are enough to start a debate: farm subsidies.

Farmers who are subsidized by their governments usually receive direct payments or loans. Domestic subsidies provide support within a farmer's own country. Export subsidies help them sell their products in other countries, often at a lower price.

Developing nations criticize export subsidies in the United States and other wealthy countries. They say the result is that their own farmers are often unable to compete on the world market.

The dispute over subsidies is one of the major barriers to a new agreement for the World Trade Organization. Negotiators will meet again next month in Geneva to discuss compromise proposals for agricultural and industrial goods.

One version written last month calls for the United States to lower its subsidies. In return, big developing countries like China, India and Brazil would make larger reductions in taxes on industries.

But in Washington, the House of Representatives recently passed a farm bill that would continue high-paying subsidies. These go mostly to farmers in the Midwest and South who grow corn, wheat, cotton, rice and soybeans. The bill would also add money for growers of fruits and vegetables.

The bill now goes to the Senate. President Bush has threatened to veto it. He opposes subsidies for farmers currently receiving high prices for crops like corn and soybeans.

Today's farm subsidies have roots in the Great Depression.

In nineteen thirty-three, Congress passed a law that paid farmers not to plant on some of their land. The idea was to control crop supplies and support prices, while protecting the soil.

Since nineteen thirty-three, legislation known as the farm bill has come before Congress about every five years for renewal.

After the nineteen sixties, aid to farmers increased. In nineteen ninety-six, Congress passed the Freedom to Farm Act. This law removed the requirement to leave areas of land unplanted in order to receive government money.

Economist and author James Weaver thinks political pressure on Congress will make big cuts in subsidies unlikely anytime soon. He says most farmers with high subsidies like the system the way it is. The amount received is based on production area. So the wealthiest farmers with the most land often receive the most money.

And that's the VOA Special English AGRICULTURE REPORT, written by Jerilyn Watson. I'm Steve Ember.