BBC News Online: Business

US farm subsidy sparks fresh row

The Republican bill was backed by the White House

Two bills - one Democratic and one Republican - have both become bogged down in the US Senate.

Farm groups fear that if a law isn't put in place before Christmas, it will be dropped as the money is spent elsewhere.

Both bills increase spending on farm programmes and offer some form of subsidy.

Hypocritical

Late on Tuesday, the US Senate rejected a Republican farm bill that would have created subsidised savings accounts for farmers.

The Republican bill was an alternative to a Democratic bill, which raised crop subsidies linked to falling commodity prices.

The two bills would increase spending on farm programs by nearly 80% over the next years and authorise farm and nutrition programme until 2006.

Mike Espy, secretary for agriculture when the US pledged to roll back subsidies in the 1990s, said: "It is a bit hypocritical, in light of the US position advocated over the past few years in the WTO and it is quite embarrassing, I believe, to the administration....President Bush has not offered its support formally for this effort."

"You have a clash domestically here between the executive branch, which is generally more tuned to international mandates...against more domestic emphasis."