America's agriculture policies have trapped farmers in a vicious cycle. Crop subsidies lead to overproduction, overproduction leads to low crop prices, and low crop prices elicit still more compensation for farmers.

If the United States continues its existing agricultural subsidy programs for the next five years, as some advocate, it would cost U.S. taxpayers $61.4 billion. Locking in this program would continue this downward spiral — distorting food costs, wasting billions of taxpayer dollars, and subsidizing a handful of large farming operations that raise a few selected crops. The majority of the money flows to only six states, and two-thirds of the handouts go to just 10 percent of farms. Worst of all, this system actually hurts most of the small producers it was supposed to protect. In short, crop subsidies are a 1930s relic that should have been scrapped long ago.

This system not only affects the American economy, it has critical international implications, too. By dumping its excess production on world markets at an unfairly low cost, the United States cheats many poor countries out of the chance to strengthen their own farming industries. Thus, absurdly, the Agriculture Department gives out money that hurts struggling economies while the State Department seeks to bolster the same countries to promote regional stability and attack the roots of terrorism.

Moreover, parts of this protectionist scheme violate world trading rules and represent a key issue in the troubled Doha round of global trade talks, which recently faltered again in Potsdam, Germany. The Doha agenda is specifically aimed to help the least developed nations get more benefit from trade liberalization.

America is not the only, or even the worst, protectionist culprit. The European Union and Japan also lavish subsidies on their farmers, protect them with quotas and high tariffs, and depress world market prices to the detriment of lesser-developed countries.

This charade must stop. With the Farm Bill now up for renewal by Congress, we have proposed a new system that ends trade-distorting commodity payments, saves taxpayers billions of dollars and treats farmers like entrepreneurs instead of supplicants. Called FARM 21, the legislation would end incentives to overproduce and bring America into compliance with world trading rules.

It would replace direct payments to farmers with "risk management accounts," government-backed and, initially, government-funded accounts which farmers could use to smooth over the normal cycles of farming life, make investments and buy subsidized crop and revenue insurance to protect themselves from extraordinary loss. It would give farmers the responsibility, and the means, to manage their own assets.

The savings — $20 billion over five years — would be used to cut the U.S. deficit and fund programs for nutrition, conservation and bio-energy. Analyses show that most farmers would do as well or better under the proposal. It would be a clear win for consumers, taxpayers, the environment, America's poor and America's national security.

Yet, FARM 21's opponents are already massing. On one side are lobbyists representing large producers of specific crops, while on the other side, too few of those who are hurt by the current program, or would benefit from these changes, devote their voices and their votes to reform. Simply put, most Americans don't understand that agriculture policy has impacts far beyond the farm.

Take America's cotton program. If the current system continued, the United States would subsidize cotton production to the tune of $8 billion over the next five years. We keep cotton cheap and export 75 percent of it. But in doing so, we hurt millions of poor African cotton farmers. Moreover, after Brazil filed a complaint, the World Trade Organization declared U.S. cotton payments illegal, allowing Brazil, and likely other countries in the future, to place retaliatory tariffs on any U.S. products they choose. This could include industrial or high-tech goods, penalizing American manufacturing workers for farm program excesses.

Likewise, completion of the Doha talks promises major gains for the American economy by lowering the steep 40 percent average tariff faced by U.S. exports. The Business Roundtable, CEOs from leading companies, estimates a one-third cut in global trade barriers would mean $2,500 in extra annual income for the average U.S. family. Transitioning U.S. crop subsidies to a trade compliant system would put great pressure on other countries at the negotiations and is the surest way to revive Doha.

The time for reform is now. The National Foreign Trade Council, which represents America's major exporters, has declared that "there is an urgent need to move forward swiftly on both the Farm Bill and Doha."

Just as war is too important to be left to the generals, the Farm Bill shouldn't be dictated by the farm lobbyists for large producers. We need a bill based on the national interest, not special interests.

Sen. Richard Lugar, R-Ind., is a senior member of the Senate Agriculture Committee and a corn and soybean farmer. Rep. Ron Kind, D-Wis., is a member of the House Ways and Means Committee, which oversees trade and tax issues. They wrote this commentary for McClatchy-Tribune News Service subscribers.