FARM BILL’S CASH CROP

Any bill that spends $286 billion over five years ought to make a lot of constituents happy, and the House version of the 2007 Farm Bill hands out enough commodity and income subsidies to keep most from complaining. But as generous as the bill is, it still doesn’t fully reform the system by which it hands out subsidies, how these federal transfer payments meet global trade rules and what effect these payments have on poor countries. The Senate, expected to take up its version of the bill next month, has plenty of work to do.

For instance, President Bush proposed providing benefits only to those farmers with adjusted gross incomes of under $200,000, to lessen the current concentration of payments to the wealthiest farms. But that would have affected about 38,000 farmers currently receiving subsidies, so House Democrats raised the cap to $1 million. This distribution to wealthy farmers hurts those with lower incomes because it limits how much they might receive and provides incentive for large-scale owners to further consolidate farms.

The bill does contain some measures that are valuable – fruits and vegetables are now recognized and the Milk Income Loss Contract program is continued; land conservation is included and food stamps gained support. And no one should assume that putting together such a large and heavily lobbied bill that makes sense is an easy undertaking. The House Agriculture Committee could have done worse.

But it also could have taken steps to head off disputes at the World Trade Organization, where Canada and Brazil argue that the level of U.S. subsidies through direct payments, loan deficiency payments and counter-cyclical payments distort trade and harm farmers in their countries. These are not new complaints, and the United States has lost these battles before, such as the question of cotton subsidies in 2005.

Maine Reps. Tom Allen and Mike Michaud voted in favor of the Farm Bill, and given the bill’s increased spending on Maine farmers, its conservation and forestry provisions and several administrative improvements, that’s understandable. But the bill is only a half step in the right direction.

The Senate has a chance to take it further – and avoid a Bush veto – by, at minimum, addressing the qualifying income levels for subsidies and the total subsidies directed toward specific crops that are affecting trade. Accomplishing that would at least give Congress reason to say it had included reform in the bill among all those tax dollars.