Hurricane's Harm to Crops Could Influence Farm Subsidies Debate | AccountingWEB

Hurricane's Harm to Crops Could Influence Farm Subsidies Debate

Farmers across the country are racing against time to save at least part of a devastating harvest season.

In the gulf states that were directly impacted by the fury of Hurricane Katrina, farmers are rushing to save dying cattle, restore electricity and find scarce, and expensive, diesel fuel. Farmers in the breadbasket states need to move their corn, soybeans and wheat to export markets, but the just-opened Port of New Orleans is a transportation bottleneck.

The American Farm Bureau Federation predicts $2 billion in damage to farmers nationwide, the New York Times reported. The federation figured the Hurricane would force losses of 2 million tons, or 20 percent, of Louisiana's sugar cane crop. In addition, about 25 million pounds of milk at plants in Louisiana, Alabama and Mississippi could be lost over the next month if the plants don't start operating soon, Michael Danna, a spokesman for the Louisiana Farm Bureau Federation, told the newspaper.

In Indiana, agricultural economists from Purdue University are urging corn and soybean farmers to postpone their harvests to buy time for Mississippi River grain shipments to return to normal.

Sugar cane farmers are also waiting. Their fields must be dry enough to apply an agent that ripens sugar cane, but waiting too long could mean encountering winter frost, Danna said.

With serious troubles mounting for American farmers, the Times suggested that the Bush administration may have a harder time pushing through its plan to trim farm subsidies in response to pressure from the World Trade Organization.

"Without question, this makes the reforms that a lot of the rest of the world would like to see happen here in the U.S. a lot more difficult," said Clayton Yeutter, a former secretary of agriculture and United States trade representative. Trade talks are set for a meeting in December of the World Trade Organization.

In addition, the House and Senate Agriculture Committees are looking for ways to cut $3 billion in Agriculture Department programs from the federal budget.

In recent weeks, Agriculture Secretary Mike Johanns has been talking to farmers across the nation about reducing farm subsidies for two reasons: to open more export markets to American farmers and to comply with international free trade agreements. "There is a real conditioning going on here," said Keith Bolin, a corn and hog farmer and president of the American Corn Growers Association, who attended a session last week in Decatur, Ill., three days after the hurricane. "Get used to less, get used to less. That's the message."

The World Trade Organization wants to remove $280 billion in subsidies among the world's richest countries. American taxpayers and consumers paid $47 billion of that total to farmers last year.

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