Local and Global Perspectives on the New U.S. Farm Policy

The reaction of U.S. farm groups and our trading partners to the new farm bill has been surprisingly frank and sometimes harsh. Many farm groups have given up the argument that farm subsidies are temporary measures needed until good times return. For example, Mississippi Delta cotton farmer Kenneth Hood (who is also chairman of the National Cotton Council) was recently quoted in the Wall Street Journal as saying, “The Delta needs cotton farmers, and they cannot exist without subsidies.” Five years ago, no farm organization leader would have used the subsidy word, and never would he or she have admitted publicly such a dependency on public assistance. The international reaction has been more predictable and harshly negative. Typical comments from world leaders are that the new farm bill is protectionist, that it violates the World Trade Organization (WTO) agreement, and that it is a big setback to the world trading system. Because we are entering a new round of WTO agricultural negotiations, it will be useful to examine each of these charges. Are they true? And if so, what impact might they have on our ability to come to a new WTO agreement?