When U.S. Trade Representative, Rob Portman, in an article for the Financial Times earlier this month, promised farm program cuts, he sparked a flurry of statements from farm spokespeople around the world – predictable statements about the Doha Round of trade talks. The new U.S. plan calls for a 60 per cent reduction in U.S. domestic farm subsidies labelled trade distorting. He hinted that a cut of this size would require significant reforms in U.S. farm programs, including marketing loan programs and counter-cyclical payment programs.

Well, the ink was barely dry and the chairman of the U.S. Senate Agricultural Committee, one Saxby Chambliss, was calling for "No net reduction in the farm safety net." The Senator’s staff issued a further statement: "Let me reiterate that Congress will be writing the next farm bill in 2007 and U.S. agriculture will not disarm unilaterally."

U.S. Agriculture Secretary Johanns maintained that it is possible to reach a WTO agreement (World Trade Organization agreement) without undermining U.S. support for agriculture: "I will always advocate we should support agriculture. I just think it’s good federal policy. And we can continue to do that, notwithstanding what happens at the WTO."

The Congress of European Farmers urged their governments to defend the 2003 reform of the Common Agriculture Policy saying "no concessions must be made on market access which jeopardizes the 2003 reform."

A new system of decoupled direct payments to EU farmers started by the EU CAP reform of 2003 claims to avoid distortion of agricultural trade. France was vigorous in its defence of the EU farmer position. The French Foreign Minister said: "We will not accept WTO talks that go back on [2003’s] unanimous decision of Europe."

The Canadian Federation of Agriculture pointed out that the U.S. proposal represents no real concession on the part of one of the world’s largest agricultural subsidizers: "The U.S. offer may sound generous, but in terms of real subsidy dollars they haven’t given up a penny." The CFA analysis shows that the U.S. does not currently spend its maximum allowed under WTO rules. In fact, the U.S. would have to reduce its maximum by over 66 percent before it would even begin to cut a single real dollar from the billions it spends on trade-distorting subsidies today.

Days after the U.S. offer of subsidy cuts, talks between American officials and leaders of the European Union had shut down without much result. There’s no breakthrough in the WTO negotiations – probably because the real issues are not being debated.

On the surface, agricultural trade talks are about subsidies, tariffs and access quotas. Get rid of these distortions of trade and farmers will experience better world prices. Not likely. Low prices are the result of overproduction. Better prices are linked to production cuts. Trade talks are really about which country will agree to take farmland out of production, pour less investment into farm technology and let many of its farmers go bankrupt.