Farm Aid

An opportunity to reform subsidies and boost trade

CONGRESS IS gearing up for one of its twice-a-decade fights over a farm bill. Past battles have not produced sensible policy, and this year's debate already is off to a troubling start.

President Bush has submitted a farm bill that contains a number of desirable reforms. He proposes to eliminate commodity subsidies for farmers with annual incomes of $200,000 or more. He offers a series of common-sense changes to the way the government calculates and distributes farm payouts, alterations that backers say address international concerns over anti-competitive American subsidies that have held up global trade talks. Commendably, he also would shift money to conservation efforts.

In the House, the Agriculture Committee will battle over the particulars. But first the Budget Committee must set the total amount that the Agriculture Committee can appropriate to particular programs, and that figure is significant, in two ways. Too much generosity will enable lawmakers to siphon money into all sorts of pet projects while declining to trim subsidies; a smaller total will give Congress less opportunity to expand wasteful programs and more incentive to consider many of Mr. Bush's proposals.

Many want a large increase, justifying it by dubious logic. High commodity prices mean the government has been paying farmers less in income support than it has had to until recently. Pressure groups, counting on this trend of lower payouts to continue, are lobbying Congress to capture these "savings" for their favored projects. But their projections assume that commodity prices will remain high, which is far from certain and apt to be impossible if corn-based ethanol fails to take off. Congress should not budget on the assumption that these projections will materialize.

Moreover, if the extra money is spent unwisely, it could complicate international trade talks, indirectly costing Americans even more. The Doha round of global trade negotiations has foundered on U.S. and European subsidies for domestic farmers, which lower world agricultural prices and so prevent farmers in the developing world from earning a living. If Doha is to be revived, the United States has to show leadership by cutting such subsidies. The House Budget Committee should approve no more than the president's relatively modest increase.