June 15, 2007 11:43AM # You Mean It Could Get Worse? By [Sallie James](https://www.cato.org/people/sallie-james) --- SHARE The House Agriculture Committee yesterday released its [preliminary discussion draft](http://agriculture.house.gov/inside/Legislation/110/Commodities_001.pdf) of the commodity section of the Farm Bill (the section that deals with the subsidy programs). But the changes proposed by Rep. Colin Peterson (D, Minn.), House Agriculture Committee chairman, are precisely the wrong sort of changes needed to avoid legal challenges to its farm programs and inject life into the Doha round of global trade talks. Chairman Peterson has suggested increasing most of the price-linked subsidies, and paying for the increase out of the money currently allocated for direct subsidies that farmers receive regardless of production or market prices. When farmers are paid according to the amount they produce, this encourages overproduction and depresses world market prices. That infuriates our trade partners, and we can expect more of the type of legal challenge to U.S. farm programs as the cotton case (more [here](http://www.freetrade.org/node/23)) and the new case against U.S. farm subsidies brought by Canada (background [here](http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds357_e.htm)). While paying farmers “money for nothing” may be fiscally irresponsible, it is less market distorting than the types of subsidies that Chairman Peterson is proposing to increase. It makes no sense to increase the types of payments that are causing legal trouble. And if commodity prices fall from the current historic highs, then these subsidies would have a necessarily higher budgetary impact than the current setup. My colleage Dan Griswold and I have [proposed](http://www.freetrade.org/node/609) bribing farmers to let us scrap the whole thing altogether. ##### Related Tags [Tax and Budget Policy](https://www.cato.org/tax-budget-policy), [Trade Policy](https://www.cato.org/trade-policy), [Herbert A. Stiefel Center for Trade Policy Studies](https://www.cato.org/herbert-stiefel-center-trade-policy-studies) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).