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The US Congress has passed a $290 billion farm bill, which will increase subsidies to US farmers and cut international aid programs.

George Bush has threatened to veto the bill, however, but there is still a good chance it will be passed into law. Interestingly, the presidential candidates response to the bill were contrasting with John McCain critical, Hilary Clinton supportive and Barack Obama labelling it as “far from perfect”.

“It does not target help for the farmers who really need it, and it increases the size and cost of government while jeopardizing the future of legitimate farm programs by damaging the credibility of farm bills in general,” Agriculture Secretary Ed Schafer stated. “At a time of record setting income for farmers, it sends the wrong message to the rest of the country who are not experiencing the boom of the agriculture sector. This bill is loaded with taxpayer funded pet projects at a time when Americans are struggling to buy groceries and afford gas to get to work.”

“Eight months behind schedule, Congress will send a bill to the President that is trade distorting and fails to provide meaningful reform to the adjusted gross income limit, beneficial interest or the international food aid program,” he added.

Raymond Offenheiser, President of Oxfam America, was also strong in his criticism of the bill. “Faced with a mounting food crisis at home and abroad, Congress had the opportunity through the Farm Bill to shift funds from wasteful agricultural subsidies for large scale farms to food aid to meet the needs of the poor,” Mr Offenheiser said. “But instead, Congressional leaders settled on a bill that will continue to be costly to taxpayers, undermine our rural economy, damage our trade relationships, and hurt the world’s poorest farmers.”

The slight decrease in tax credits to ethanol producers (by 5c per gallon) and increased conservation funding were welcomed, although many believe the cuts in tax credits do not go far enough.

With global food prices skyrocketing this year and global fears of a potential food shortage growing, the bill sends a disappointing message from the US to the rest of the world.

Tags: adjusted gross income, agricultural subsidies, agriculture secretary, agriculture sector, barack obama, beneficial interest, ed schafer, ethanol producers, farm bill, farm bills, Food, food aid program, food crisis, food price, food prices, ford, hilary clinton, international food aid, john mccain, meaningful reform, oxfam america, rural economy, target, trade relationships, us congress

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Their revulsion comes by way of the twin umbrellas protecting the $21 billion U.S. sweetener industry: an 18-cents per pound price support and government-managed domestic and import quotas. Separately they cause apoplexy; collectively, angina.

But American sugar growers and processors — overwhelmingly the same people — have beaten these slings and arrows into candy and cookies since 1981, when that year’s farm bill reinstituted a sugar support program. All farm bills thereafter, including both the House and Senate’s 2007 models, have retained it.

In this farm bill fight, however, the haters have two new ideas on which to whip up anti-sugar hysteria.

First, both the Senate and House farm bills bless the federal purchase, then resale to American ethanol producers, of once-NAFTA limited, now free flowing Mexican sugar into the United States.

None of the sugar-to-ethanol proponents know the cost of this new add-on, but best guesses are millions. All agree, though, the cost will be less than the taxpayer tab if Mexican imports drive domestic prices lower and cause U.S. producers to forfeit homegrown sugar to the government under the guaranteed 18-to-19-cents per pound USDA loan program.

Second, in early January and without any government involvement, Mexican and American sugar players agreed to regulate the sweetener trade between the two nations to avoid “market chaos” they predict will result from the now-open trade door between them.

At its core, the deal seeks to limit the impact of Mexican sugar on the USDA-managed American market while looking to jumpstart a Mexican ethanol industry to keep excess production south of the border.

Both ideas have reenergized sugar’s loud critics. Some farm groups even are talking against sugar’s “managed” trade proposal, worried it will deflate corn-based, U.S. fructose exports to Mexico. (These groups seem to have forgotten that without sugar’s government umbrellas, there wouldn’t be a fructose industry.)

As the reactionaries bray, however, serious people are seriously considering both ideas for the simple reason that the unrestrained trade now permitted under NAFTA — and soon through NAFTA’s baby, CAFTA — will wreak havoc (”a train wreck,” says the American Sugar Alliance) in both markets.

The main benefactors of this carnage won’t be U.S. consumers who, sugar haters falsely claim, now pay three times the world price for sweetener. No, the big winners will be the usual suspects — big sugar users who want the one penny they now spend on sugar to make a candy bar to drop to one-half penny.

In the meantime, the 146,000 sugar-related jobs in 19 states — the real reason for sugar’s almost bulletproof political support — will come under siege by global sugar subsidizers like Thailand, Brazil and other South American nations.

Is that a good enough reason to consider sugar’s two new ideas — at least until a more uniform, multilateral trade agreement, like Doha, is completed?

If not, let’s sweeten the pot.

Today’s sugar support program carries zero cost to U.S. taxpayers. In deflated dollars, today’s U.S. retail sugar price is one-half 1980’s. In 2008, you’ll spend more for 10 gallons of gas than for sugar. Also, America already is the world’s second largest sugar importer and ethanol, ag’s new darling, will cost taxpayers billions more in subsidies this year than sugar ever has or will.

So, as the free traders scream, American farmers, ranchers and consumers need to ask themselves: What’s costlier, a managed, continental sugar market or the loss of 150,000 jobs and a $21 billion industry?

Tags: ethanol producers, farm bill, farm bills, job, ups, whip

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