It is also being taken as a very dismal sign for coming World Trade Organisation (WTO) talks on freeing agricultural trade.

"They (the US authorities) seem to be bending over backwards to offer support to their farmers in a way that is really going to distort world trade," Ian Donges, president of Australia's main farm lobby the National Farmers Federation (NFF) commented.

With the US presidential election campaign getting into gear, the package is viewed cynically across Australia's farm sector. This is heightened by the bill closely following the US' abandonment of its own free trade principles by restricting Australian and New Zealand lamb imports. Through encouraging over-production in the US, the proposed US$7.6 billion bailout package had the potential to boost US inroads into traditional Australian grains exportmarkets in Asia -- beyond that which has already occurred through wheat give-aways to Indonesia in 1999, grains industry sources said.

The bailout plan seemed typical of present directions in the US administration, Donges said. The package, clearly a bad sign for agricultural trade liberalisation, was seen as part of the decision-making process before WTO talks began in November, he said.

Decisions such as these were very similar to events before the Uruguay GATT round in the late 1980s, when a grain subsidy war was in progress between Europe and the U.S. and various financial packages were put before U.S. farmers, he pointed out.

"Obviously those became negotiating factors and I think (present events are) part of that positioning and brinksmanship."

Donges added, however, that the Uruguay Round still produced substantial improvements in agricultural trade, with a commitment to reduce subsidies and a range of other liberalisation measures.

"(But) there seems to be a lot of pressure on the U.S.administration, given you've got a presidential election campaign basically started now, (and to) really warm up soon for the next 12 months," he said.

Australia's monopoly wheat exporter AWB Ltd is another strong critic of the US farm bill.