Posted January 17, 2014
The National Cotton Council (NCC) recently released a statement responding to a Brazilian Cotton Grower delegation’s statements on the farm bill and the retaliatory measures a under ruling from the World Trade Organization (WTO). The statement is available here.
A Brazilian cotton delegation recently visited Washington to discuss the farm bill and the U.S.-Brazil agreement which calls for the U.S. to pay Brazil $147 million per year, beginning in 2010. The U.S.-Brazil Framework Agreement was created to hold off Brazil from retaliating against the U.S. for violating the WTO rules regarding cotton subsidies while Congress worked on a farm bill to fix the problem-causing cotton program. Brazil won the right to impose $830 million in retaliatory tariffs at the WTO on U.S. goods ranging from cars to milk powder, according to a Reuters article available here.
After recent meetings, the Brazilian cotton delegation told the press they were “pessimistic” that Congress would finish the farm bill and they were also unsure that the legislation would comply with WTO rules against trade-distorting subsidies.
“In visits to Congress we have not yet seen sufficient effort to make the new farm bill comply,” said Gilson Pinesso, president of the Brazilian Cotton Growers Association (ABRAPA).
“We are in the position where there are no options left but retaliation,” said Welber Oliveria Barral, former Brazilian secretary of development, industry and trade, who was part of the delegation.
Brazil’s foreign trade commission (Camex) said it will hold public consultations in January and plans to finalize retaliatory measures by Feb. 28.
The NCC stated that it was “deeply disappointed and disturbed by the statements to the press made by representatives of the Brazilian cotton industry.” The NCC also said the “Brazilian cotton delegation misrepresented the carefully negotiated agreement between the U.S. and Brazilian grower organizations and wrongly portrayed the reformed cotton provisions in the farm legislation.”
Under the new insurance option in the farm bill, cotton growers “could purchase supplemental insurance that includes a significant deductible.” The insurance product “covers a narrow band of lost income in the event that actual revenue does not meet a percentage of projected revenue”; “does not cover all losses”; and “is not an incentive to over-produce.”
For more information on agricultural trade issues, please visit the National Agricultural Law Center’s website here.
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