Bush to Seek Global Farm Subsidy Cuts

The Bush Administration is expected to unveil a formal proposal this week for a “substantial, progressive reduction” of farm subsidies worldwide over the next several years as part of the global trade liberalization talks under way in Geneva.

Essentially, it calls for all agriculture-producing countries to convert their quotas and other trade barriers into numerical tariffs--which are easier to compare--and phase out entirely within five years those that distort world trade.

The United States also wants to muster support for revamping existing farm subsidies so that payments to farmers are made independently of the size of the crop that these farmers produce. U.S. officials charge that the links in place encourage overproduction.

And finally, the Administration wants trading countries to eliminate export subsidies, which they say enable inefficient producers to export--and often underprice efficient growers--in global markets. The plan calls for phasing out export subsidies within five years.

The plan, which codifies earlier suggestions that the Administration has made in the agricultural trade field, is unchanged in scope and substance from the revised proposals outlined in early February by U.S. Trade Representative Carla A. Hills.

The measure would also allow countries to re-impose current tariffs or quotas in cases where surprise surges of imports threatened to jeopardize their domestic farming industries. And it would prohibit governments from blocking food exports in case of shortages at home.

The proposals, which U.S. strategists will present formally in Geneva on Wednesday, are designed to speed up the negotiations on writing rules for trade in agriculture, which is not covered by global trade rules.

The United States, which has been the major force behind the talks, has urged all countries to submit formal proposals on agriculture and other issues by year-end, so that a consensus is reached by the time the current talks end, in December, 1990.

U.S. officials have said Washington is willing to reduce or phase out America’s farm subsidies and trade barriers if other countries agree to trim theirs as well.

However, Washington’s proposals on agricultural trade are expected to receive a cool reception--particularly from European countries, whose governments face strong pressures from thousands of small, relatively inefficient farmers.

U.S. farm groups are split over the Administration plan. John C. Baize, Washington director for the American Soybean Assn., said those organizations that represent large-scale crops such as corn and soybeans “strongly support” the proposal.

But those representing heavily subsidized U.S. crops--such as peanuts, cotton and sugar--are skeptical. Eiler C. Ravnholt, vice president of the Hawaiian Sugar Planters’ Assn., said sugar growers have “concerns” about the plan, particularly converting quotas to tariffs.

“We question whether that would allow continuation of the (current sugar subsidy) program without instability,” Ravnholt said.

All sides agree that the Administration faces an uphill battle in its fight to reduce farm subsidies worldwide. Even if other countries were to agree to go along, paring U.S. farm subsidies would require approval from Congress.

Moreover, Congress will write a new farm bill next year, whether or not the United States is successful at the talks in Geneva. Congressional leaders have served notice that they do not intend to wait until the talks are over before starting work on the legislation.

The U.S. increased its own agricultural export-subsidy program in 1983, largely in retaliation for those maintained by European countries. Both sides have complained that they are spending too much for farm programs--as much as $30 billion a year each.

Washington’s reasoning behind the new effort is that although no country can “disarm” unilaterally and forgo its farm subsidies, both the industrial countries and developing nations can cut farm subsidies if all sides do so simultaneously.