As the 2006 farm policy picture develops, observers see three key issues on the horizon.

According to DTN, “This sets the stage for three farm policy debates next year — one beginning early in the year on proposed budget cuts, a second continuing debate on trade policy that could peak next spring and a third beginning late in the year on replacement farm legislation.”

While Administration federal budget proposals are set to be released next month, recall that last year, the President Bush sought to curtail farm spending by $9 billion over five years. Nonetheless, the current budget reconciliation measure that is set to pass Congress contains only $2.7 billion in cuts.

The second two issues, trade policy and the 2007 Farm Bill debate, are more intertwined.

Last week, the Senate narrowly passed the federal budget reconciliation bill.

In its final form, the budget measure will trim $2.7 billion from federal agricultural programs, while adding an additional $998 million spending to extend the Milk Income Loss Contract Program.

For the measure’s full details on agriculture, see this summary which was prepared by Jerry Hagstrom.

Concrete achievements made at the latest round of W.T.O. trade talks in Hong Kong were modest.

Most notable was an agreement that sets a deadline for wiping out subsidies of agricultural exports by 2013.

And reaction to the talks from newspaper editorial boards was mostly negative.

Yesterday’s Wall Street Journal indicated that, “The negotiators signed a substantially weakened deal that includes a commitment to eliminate farm subsidies by 2013, modest cuts in tariffs, and an April 30, 2006 deadline for agreeing on how to liberalize farm and non-farm trade.”

Today, the sixth annual W.T.O. Ministerial meeting gets underway in Hong Kong. On the agenda: The Doha Developmental round of trade negotiations.

This is a good time to briefly discuss some of the technical issues associated with the talks, and what these specific rules could mean for future U.S. domestic farm policy.

Although it’s easy to speak generically about “farm subsidies,” it’s very important to remember that the W.T.O. classifies subsidies into three specific categories- or “boxes.”

The long awaited sixth W.T.O. Ministerial Conference will be held in Hong Kong, China, next week (Dec. 13–18).

According to the W.T.O. webpage, “This sixth conference will be vital for enabling the four-year-old Doha Development Agenda (D.D.A.) negotiations forward sufficiently to conclude the round in 2006.”

Embedded within the trade talks is the increasingly controversial issue of American and European farm subsidies.

Biotechnology continues to be an issue that generates a high level of passion among farm policy observers as well as citizen voters both internationally and domestically.

The biotech issue has tremendous implications for agricultural trade and development.

This month, two separate votes on biotech ballot initiatives provide an interesting snap shot into the current nature of the debate.

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 on-going W.T.O. Doha trade talks sputter, U.S. Trade Representative Rob Portman was busy this past week working towards progress in trips to both India and China.

While promoting stronger bi-lateral U.S. relationships, as well as seeking progress in the W.T.O. talks in both countries, Ambassador Portman’s trip to China provided more interesting news coverage.

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.