All eyes here have been on the “health check” of the Common Agricultural Policy, but over the Atlantic there are more dramatic events under way, writes Ewan Pate, farming editor.

The 2007 Farm Bill, which sets support mechanisms for the next five years, is already months late and has had a stormy passage. President George W. Bush hates it, and last week threatened a veto because he thought it was perpetuating an out-of-date subsidy system which was costing too much.

He is the first US president to attempt to veto a Farm Bill since Eisenhower in 1956.

Much to his frustration, President Bush looks very unlikely to succeed in his attempts to block the new legislation, with the Senate and House of Representatives voting to pass the bill with healthy majorities. Under the American political system a two-thirds majority in both houses can overthrow a presidential veto.

If the 2007 Farm Bill is passed it will represent something of a bonanza for US farmers. They will have a generous subsidy package worth $307 billion over the next five years, with no mention of decoupling support from production.

This is an increase of $20 billion over and above President Bush’s own proposals, which had earlier been rejected.

This settlement is bound to infuriate those seeking a World Trade Organisation deal on farm support. Not only are most of the subsidies linked to supporting 17 main crops, but other crops such as fruit and nuts have been brought under the subsidy umbrella at the behest of representatives and congressmen from the western states.

At the same time conservation programmes have been cut back, with more encouragement given to farmers to bring land back into production.

Not surprisingly, farm leaders are delighted.

“Against a backdrop of growing food security concerns, this carefully crafted legislation will enable America’s farmers and ranchers to continue serving as the world’s major food producer,” said Bob Stallman, president of the American Farm Bureau Federation.

US Agriculture Secretary Ed Schafer simply described it as “reckless.”

It is certainly protectionist, with a stipulation that only US-grown food can be used in US-funded food aid programmes.

President Bush seemed to be particularly infuriated by this, saying, “This bill does not include the requested authority to buy food in the developing world in order to save lives.”

It is certainly a protectionist Farm Bill, with US sugar producers guaranteed 85% of the domestic market, and heavy tariffs to keep out Brazilian sugar cane ethanol.

Mr Bush is also particularly annoyed that much of the aid will go to larger farmers.

In his own plan, payments would be capped to farmers with a turnover of $500,000. But now the suggestion is that the ceiling will be $750,000 for single farmers and $1.5 million for married farmers.

There is also concern at the open-ended nature of the proposed subsidy regime. The mainstay of the US system is counter-cyclical payments, which are not unlike the old deficiency payments scheme operational in the UK. If prices fall, the government steps in with a compensatory payment. The further the price falls the greater that payment will be.

Because the base will be taken as the value of the 2007 crop, the highest-priced in memory, the potential for lower prices in future years is greater. This could see the US Treasury forking out billions of extra dollars.

There are also subsidised crop insurance schemes and disaster aid mechanisms which are designed to take risk out of producing on more marginal areas.

It all seems in stark contrast to the CAP, where the health check proposals will push farmers further into the free market and the world of decoupled payments.

The EU still spends £25.3 billion annually on support for rural areas compared to the proposed US figure of £31 billion, but the support mechanisms are now very different.

Last week’s developments on both sides of the Atlantic should make for some interesting banter when the agriculture committee of the WTO meets in September.