International developments continue to influence the domestic farm policy political environment this week.

Specifically, a Canadian federal agency has ruled that U.S. corn subsidies are harming some Canadian farmers.

Earlier this fall, some corn farmers from Ontario, Quebec and Manitoba, asked the Canadian government to investigate a claim regarding the dumping of American grain corn into the Canadian market.

As the Edmonton Journal reported back in September, “In what could become a costly trade war, the Canadian Corn Producers are alleging imported U.S. grain corn is selling below its cost of production and U.S. subsidies are depressing the price of corn here and hurting farmers.”

Last week, the Canadian International Trade Tribunal, the Canadian federal agency with jurisdiction in this matter, issued a report regarding the American corn dumping allegation, which noted that, “there is evidence that discloses a reasonable indication that the dumping and subsidizing of unprocessed grain corn have caused injury to the domestic industry.”

In a joint statement, U.S. Secretary of Agriculture Mike Johanns and U.S. Trade Representative Rob Portman expressed “disappointment” with the decision.

Meanwhile, Senate Agriculture Committee Chairman Saxby Chambliss saw the Canadian corn import decision as being “inextricably linked” to a separate U.S. Canadian trade dispute regarding softwood lumber.

U.S. agricultural groups have vowed to fight the ruling which could potentially have far reaching consequences.

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Domestic issues this week once again focused on the federal budget, where the House narrowly passed a $50 billion budget reconciliation measure.

Although this version did not include authorizing language to extend the Milk Income Loss Contract program (M.I.L.C.), Members did receive a promise from Speaker Hastert that a two-year extension of the program will be in the final conference report.

The $35 billion Senate budget measure, which had already been passed, included M.I.L.C. reauthorization.

A House / Senate conference will now hammer out a resolution between the differing budget resolutions.

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. For more information, go to www.FarmPolicy.com