A weakening dollar promises a boost to export sales. The dollar is now at a two year low against the Euro, and has weakened considerably against the YEN. A weaker dollar effectively subsidizes foreign sales – much to the annoyance of export competitors, who are already complaining about an American farm policy they charge subsidizes over production.
This weak neighboring Canada, announced some subsidies of its own.
World leaders have criticized the U.S. for increasing farm subsidies by 67% percent over current levels. The new Canadian measure represents an increase of more than 400% over the modest supports currently offered by Ottawa.
The package will look strangely familiar to U.S. farmers as it contains provisions for taking environmentally sensitive land out of production, giving farmers income insurance subsidies and providing money for agricultural R & D.
Chretien (kreh-TyEN') is expected to reemphasize his views on U.S. farm policy when the G-Eight nations convene for talks next week in Canada.