U.S. Farm Bills tend to have little direct impact on the pork industry, because historically the attention and money goes to crop farmers and dairymen. However, there are always indirect affects that spillover to pork production.

Among the bigger surprises in the 2002 Farm Security and Rural Investment Act is the fact that Congress finished the bill this spring. But, Congress seems to have decided that a generous Farm Bill could help secure the ag vote this fall. President Bush quickly signed the bill, ignoring his USDA Secretary’s advice.

Critics stepped forward quickly, even from within the congressional ranks. Sen. Richard Lugar (R-Ind.) made no bones about his opinion that the new crop payments will only encourage increased grain production, and push prices lower, requiring more government payments.

The Congressional Budget Office says the bill will cost as much as $180 billion over 10 years. That’s more than a 70 percent increase over current levels, and many analysts think the estimate is conservative. What’s more, this comes at a time when the United States is paying for a military campaign. Where will the money come from?

U.S. taxpayers will have to foot the bill, which will make agriculture even less popular with an urban population who doesn’t have the same down-home attitude toward farmers as they used to.

Most of the money will subsidize crop prices regardless of the market’s supply and demand needs. The United States has led the battle against subsidies for several years. Canada and Australia been supportive, and in 1994 the Uruguay Round world trade agreement placed limits on ag subsidies that distort global trade. Now, the United States could exceed those limits.

This Farm Bill has and will raise trade tensions, especially with Canada and Australia, but also with Brazil and the European Union. One or several countries will likely file a World Trade Organization grievance.

Subsidy reduction is a hot topic for the next round of trade negotiations. The United States’ credibility is certainly damaged. It’s no secret that when it comes to trade issues, actions in one area can affect unrelated products, so pork exports could feel the negative fallout from the new U.S. subsidies

The new country-of-origin labeling requirements only add to the problems.

There are some funds allocated for foreign market development and U.S. agriculture will certainly need it in the years ahead.

The pork industry did receive some money, but it’s mostly to assistance with things like disease eradication and research. There’s $6.6 billion identified for the livestock industry to help with environmental upgrades. But that’s in response to the Environmental Protection Agency’s Confined Animal Feeding Operation requirements that begin in January for pork producers. Those regulations will cost every pork producer money. Still, those funds are significantly different than price supports.

This new Farm Bill will result in more grain, which means cheap grain, which tends to mean cheap hogs.

Early signs also point to the fact that the new policies will raise farm-land values and rental rates, which mean higher costs for pork producers looking to expand their manure-application land base or to increase herd size.

Intentions may have been good, but expect the long-term impact of this Farm Bill to be disappointing.