Baby corn grown at Green Produce Farm in St Ann. A group of 20 emerging economies says a new US farm bill that increases subsidies for farmers is unfair competition to growers in developing countries. - File

Brazil, India and other developing countries said the new United States farm bill will be an obstacle to global trade talks aimed at lifting millions worldwide out of poverty.

A group of 20 developing nations, including China, Mexico and Argentina, echoed criticism by World Trade Organization (WTO) chief Pascal Lamy, who last week said the new US farm bill sent a bad signal to the world while talks on a new global trade deal were continuing.

The emerging countries said the "new bill heads agriculture policies in the wrong direction at a decisive juncture of the WTO Doha Round," referring to the trade talks, which started seven years ago in the Qatari capital of Doha.

New, bigger subsidies

The US Congress last month passed a bill that provides new and bigger subsidies to US farmers and more food stamps to help the poor buy food as grocery prices rise.

The 20 countries, in a joint statement, said the trade talks should bring significant reductions in trade-distorting subsidies in developed countries to boost agricultural trade and promote development.

By allowing higher subsidy payments for certain commodities, the farm bill contradicts the purpose of the talks, it said.

"The 2008 Farm Bill not only runs counter (to) the long-term process of reform in agriculture," it said, adding that it intensifies competition between rich nations and farmers in poor developing countries.

"The unfair competition, brought by subsidies, hinders the process of market liberalisation by developed and developing countries alike," it said.

Trade officials, after a meeting in Geneva said the US delegation assured that if it becomes necessary to amend the bill once the trade talks are concluded, the administration of President George W Bush would work with Congress to bring it in line with the new agreement.

"The US position has been clear, the Farm Bill is not our Doha offer," said Sean Spicer, spokes-man for the US Trade Representative.

Lamy told EU parliamentarians last week in Brussels that the bill "was not sending a great signal" that the US is serious about reducing subsidies.

Slash subsidies

Other countries say they are looking to the United States as well as the European Union to slash agricultural subsidies before they take big steps to open their own markets.

The US administration has been pushing for a breakthrough in the trade talks, but the passage of the new farm bill signals that reduction in US subsidies will be difficult to achieve.

The group of emerging economies said it "urges the USA to show leadership in the multilateral process of agriculture reform by committing to substantial and effective cuts in subsidies and to renew its purpose to conclude the Doha Round."