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The U.S. Farm Bill is set to expire in just over a year, but some senators are already

clamoring to extend its agricultural subsidies until after the Doha round of trade

negotiations is concluded.

Trade talks collapsed in Cancun three years ago, in large part because farm subsidies in the

U.S. and European Union blocked developing countries' access to lucrative agricultural markets.

Let's see what trade policy analyst Sally James has to say.

Arkansas Senator Blanche Lincoln insists that American farmers are at a severe disadvantage and need agricultural support to compete

fairly on the world market. Is this the case?

Certainly it's true that world agricultural markets are distorted, mainly as a consequence of the type of policies contained in the Farm Bill,

but US farmers on the whole are not struggling.

Net farm income was almost $83 billion in 2005, the second highest year on record after 2004.

And even if smaller family farms were struggling, the sorts of payments Senator Lincoln is proposing

would largely benefit the larger

agribusinesses that already receive subsidies. Many American industries

in and out of agriculture have proven to be remarkably adept at competing and prospering without subsidies and there's

no reason to think that supported industries couldn't do the same.

Removing distortions in the domestic market, we argue would would be good for the U.S. economy regardless

of the bad policies of other nations.

Do farm subsidies place any costs on the American consumer?

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