US urged to give more, take less in farm talks

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Geneva, Jul 21: The United States should make deeper farm subsidy cuts than currently proposed in world trade talks and scale back demands on developing countries to open their markets, a leading development group said on Monday.

"This is the Doha Development Round, not the Doha tit-for-tat round. Rich countries must stop demanding harsh conditions from developing countries," Oxfam International said in a new report, which concluded that new US farm legislation had greatly complicated the task of negotiating a successful world trade agreement that curbs farm subsidies and tariffs.

Trade ministers representing around 30 key members of the World Trade Organisation are in Geneva this week to try for a long-awaited breakthrough in agriculture and manufactured goods talks at the heart of the nearly seven-year-old Doha round, named for the Qatari capital where they were launched.

"Unfortunately, the US Congress has undermined the Doha round at a critical point with its trade-distorting farm bill. It would take a major act of courage and decision to set the negotiations back on track," the Oxfam report said.

Congress passed the farm legislation last month over the veto of President George W Bush, who said the new law subsidised multimillionaire farmers at a time of rising food prices and takes steps, such as raising crop subsidy rates, contrary to calls for freer farm trade. Current Doha proposals call on the United States to cut its spending cap on "overall trade-distorting support" from the current ceiling of $48.2 billion to a range between $13.0 billion to $16.4 billion, well above what's actually spent because of current high farm prices. The draft text also requires Washington to cut its most trade-distorting farm programs by 60 percent, from a current cap of $19.1 billion down to a new ceiling of $7.6 billion.

Because of generous new provisions of the 2008 farm act, the United States could easily surpass that $7.6 billion limit if commodity prices fall, Oxfam said.

The US Agriculture Department has estimated a new revenue insurance program in the 2008 farm law could cost as much $16 billion per year if corn prices fell back to $3.25 per bushel and most farmers participated in the programme, Oxfam said. The best way to salvage the Doha negotiation was for the United States "to make a new offer to reform US farm programme and cut real spending. This must come first, before demanding concessions from developing countries," Oxfam said.

Washington should scale back demands on developing countries to open their markets in agriculture, manufacturing and services, "especially when rich countries are unwilling to make real reforms to their agricultural support programs," the development group said.

Oxfam's recommendation is one that would be very difficult politically for the Bush administration to meet.