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US Senate passes farm bill boosting subsidies by $6.4b

REUTERS, Washington
The Senate sent President George W Bush Wednesday a bill boosting crop and dairy subsidies by $6.4 billion a year a plan that angers US trade partners and could tip control of Congress in the autumn elections.
The six-year farm bill, a retreat from free -- market reforms begun in 1985, was newly estimated to cost $51.7 billion. That was 15 per cent more than expected due to bleak commodity prices showing no sign of improvement.
Bush has promised to sign the bill so grain, cotton and soybean growers will see fatter subsidies this year. Senators passed it, 64-35. The House passed it last week, 280-141.
"This the economic stimulus package for rural America", said Senate Agriculture Committee chairman Tom Harkin.
The Iowa Democrat, one of the "prairie populist" Democrats who routinely oppose farm bills, voted for this one, which he helped write. Many of the Senate's farm-policy hands voted against it -- "a real
paradox," said Kansas Republican Pat Roberts, author of the 1996 law that deregulated agriculture.
While Harkin extolled the farm bill for strengthening the farm safety net, critics predicted price-crushing surpluses.
There was little reform of rules that allow virtually unlimited payments to large operators, although the limit was lowered to $360,000 a year, down $100,000.
Crop and dairy subsidy spending would climb by 67 per cent under the farm bill, which raises grain, cotton and soybean support prices. It also revives "target" prices, last used in 1995, to release extra money to farmers during hard times.
Spending on soil, water and land conservation would increase by nearly 80 per cent. Most of the increase goes to a programme that shares the cost of controlling manure and farmland run-off. Ranchers and feedlot operators say they will need $1 billion a year to satisfy clean-water rules.
For five years, legal immigrants in the United States would regain eligibility for food stamps, the major
US anti-hunger programme. Eligibility was cut off by a 1996 welfare reform law.
Canada, the European Union, Australia and Brazil say the flood of new money was a clear contradiction of US calls for the world to lower trade barriers and forsake unfair farm subsidies. Trade specialists say the bill will complicate ongoing talks for freer world trade in agriculture.
A University of Missouri think tank calculated the bill posed a one-in-five chance this year of violating world trade rules that limit US spending on trade-distorting farm subsidies to $19.1 billion a year.
Besides the increase in farm subsidies, US competitors were concerned by a provision to require country-of-origin labels in three years on meat and produce as well as creation of price supports for dry peas, lentils and garbanzos.
Indiana Sen. Richard Lugar, Republican leader on the Agriculture Committee, led a chorus of opponents in lamenting the farm bill as an election-year document.