“Farm good exporter Australia…threatened to challenge U.S. Farm Bill in the World Trade Organizations (WTO)…

“EU Blasts U.S. Farm Subsidy Proposal.”

America's new federal farm bill is not too popular with some of its competitors.

In diplomatic term, “Tough!”

There are a myriad of confusing trade agreements and formulas governing world agricultural commodity trading. There is quite an international industry in “scoring” actions by various governments to see if actions made to support farming and ranching conform to WTO formulas. It's takes someone with a doctorate in economics just to figure out the formulas.

The idea is to keep everyone on a “level playing field,” a buzz phrase that seems meaningless with each trade agreement. Every time a trade agreement is signed, everyone is all smiles and happy — until it is explained. Then reality sets in. It usually comes down to America giving away the ranch and getting in return at best token agricultural trade concessions, all in the name of keeping peace in the world. And, if a country does not like the rules of the treaty, they can slap a phytosanitary restrictions or two on American imports to keep them out.

Australia's opposition is no surprise. That nation's cotton growers are enjoying the benefits of a strong American dollar. The American dollar has increased in value 40 percent or more against the Australian dollar, giving Australians a huge economic advantage in the world marketplace. Subsidizing American farmers could cut into a good deal for Australians.

The EU system of agricultural subsidization is far reaching. Last fall at a huge agricultural equipment show in Northern Italy hundreds of thousands of farmers were eager to buy and manufacturers eager to sell were doing well. It was truly amazing having come from the U.S. where there was only agricultural doom and gloom. I asked what's the difference. The response was unanimous: “subsidies.”

Never did get a full explanation of what those were, but in discussions with people it became obvious that European governments use incentives to keep people on farms and out of the major cities. However, Europeans are quick to say that maintaining farms is not an agricultural issue — it is a social issue — it is a lifestyle issue.

Okay.

Then there was the announcement that the Italian government was banning the use of older tractors and giving growers incentives to replace them. The reason? To bolster a faltering ag equipment industry. Is that a lifestyle issue?

American farmers and politicians prefer an open market world agricultural economy. However, that seems an impossible dream. No one wanted this farm bill. It is expensive and a political nightmare. However, it became absolutely necessary if American agriculture expects to survive in a playing field that likely never will be level.

Lost in all the debate is the absolute necessity to maintain a viable food and fiber industry in America. Without it, this nation would become so vulnerable it is impossible to imagine, even in this post 9-11 era.

e-mail: hcline@primediabusiness.com