Andres Oppenheimer

writes for the Miami Herald

While most of us were looking elsewhere, Congress passed a 2008 farm bill that could hardly be worse: It subsidizes rich U.S. farmers, hurts most American consumers, poisons the environment, doesn't help alleviate world hunger, and harms Latin American and other world food-producers.

What's worse, the $290 billion bill does all these things - and more - at a time when many rich U.S. farmers who will benefit from it are making record profit, thanks to sky-high international commodity prices.

It would be hard to understand, if we weren't in an election year. But widespread support for the legislation within the Democratic majority - including from House Speaker Nancy Pelosi, who earlier opposed some of the subsidies - and 100 Republican House members helped the House override a White House veto. The Senate followed with an 82-13 vote.

In addition to $5 billion in direct payments to farmers who in many cases are doing very well, the new law provides a plethora of election-year handouts, including $170 million for the West Coast salmon industry, $93 million in special tax breaks for racehorse owners in Kentucky, $260 million in tax cuts for the timber industry, and $15 million for asparagus growers, who were not receiving this subsidy in the past.

"It's a national disgrace," says Gary C. Hufbauer, a former U.S. Treasury official now with the Peterson Institute for International Economics. "These are booming times for many U.S. farmers. If there ever was a time in which you could liberalize the farming business, one would think that this would be the time."

Farm-bill supporters note that the legislation provides $209 billion for nutrition programs, including a significant increase in funds for food stamps.

Likely Democratic presidential nominee Sen. Barack Obama supported the bill, saying it "will provide America's hard-working farmers and ranchers with more support and more predictability."

Presumptive Republican nominee Sen. John McCain criticized the bill, saying that, at a time of record commodity prices, "American agriculture has progressed to the point where we no longer need government-grown farms."

Among the farm bill's worst features:

It hurts most American consumers by continuing to subsidize corn-based ethanol, which is diverting 25 percent of the U.S. corn production into subsidized ethanol production. As a result, corn prices at the supermarket are going up, and so are prices of meats from corn-fed cows and chickens.

It hurts the environment, among other things, because instead of lifting barriers to import sugar-based ethanol from Brazil and Central America, the new law maintains tariff barriers that protect U.S. corn-based-ethanol producers.

It hurts Latin America because it maintains tariff and non-tariff barriers to the region's agricultural goods. Instead of helping reduce U.S. sugar prices by importing cheaper sugar from Caribbean or Central American countries, the new farm law maintains import quotas to protect Florida sugar barons. As a result, Americans pay more than the world market price for the sugar they consume.

It makes a mockery of U.S. support for free trade in world-trade negotiations. Until now, Washington was telling agricultural producers in Latin America that it would reduce farm subsidies if the European Union did the same. Now, Congress is effectively telling the world that it will not allow any U.S. president to reduce farm subsidies.

My opinion: The damage is already done. Now, President Bush should do something really bold, which could help him leave office in a state of less-than-total disgrace.

As the Peterson Institute's Hufbauer suggested to me, Bush should announce after the U.S. elections in November the most far-reaching proposal ever to slash farm subsidies in exchange for reasonable concessions from U.S. trading partners.

It would have zero immediate results, but it would force the next U.S. president to address the issue and - perhaps - give the next administration an excuse to follow up on an inherited policy. The alternative, doing nothing, will be bad for America and bad for the world.