Developments in U.S. farm policy this week included important legislative action in Congress, as well as a trip to Latin America by President Bush.

The Senate on Thursday passed a five-year budget reduction bill by a vote of 52 to 47.

The legislation, which is slated to garner budget saving of $35 billion, contained approximately $3 billion in cuts to agricultural programs.

An amendment offered during the debate which sought to cap farm payments from $360,000 to $250,000, was defeated on a procedural motion by a vote of 53-46.

Meanwhile, the House is expected to bring their budget savings plan to a vote on Thursday. Due to stronger political pressure exerted by conservative Republicans, the House plan seeks a more ambitious overall budget savings of $53.9 billion, including a $3.7 billion reduction in agriculture spending.

In addition to differences over spending levels on the food stamp program, the Senate bill contains a provision to extend the Milk Income Contract Loss program while the House measure does not.

In international developments, late last week President Bush traveled to Argentina to participate in the Summit of the Americas and to meet with the President of Argentina.

President Bush set out to promote the Free Trade Area of the America’s (FTAA) Trade Agreement, which according to Saturday’s Los Angeles Times, “would create a unified trade bloc from Alaska to the southern tip of Argentina and Chile.”

However the issue of U.S. agricultural subsidies put a frosty chill on the talks.

On Sunday, the Los Angeles Times reported that, “Representatives of Argentina and Brazil, the continent’s major agricultural producers, insisted that they favored the concept of economic integration. But they said they feared that their products could not easily compete with heavily subsidized U.S. foodstuffs.”

And, according to Monday’s Wall Street Journal, repercussions could spread. “The failure of the Western Hemispheric summit could make it more difficult for the U.S. to gather support for the Doha Round, and could embolden other countries to make more demands in those talks.”

Keith Good writes The FarmPolicy.com News Summary, an Email newsletter containing a summary of news relating to U.S. farm policy which is published most weekdays. To sign up for this FREE publication, just send an Email to this address.