Ag Policy Blog
Chris Clayton DTN Ag Policy Editor

Wednesday 01/15/14

Cotton Council Concerned Over Views From Brazilian Counterparts

A statement released Wednesday by the National Cotton Council indicates Brazilian cotton producers aren't happy with provisions being worked out in the farm bill. The statement also indicates the Brazilians aren't sticking to a growers' agreement that had been worked out in a series of meetings between the U.S. and Brazil.

According to the NCC, Brazilian growers want the U.S. government to reinstate the $147 million-a-year payments the U.S. has been sending since 2010. The Obama administration cut off the payments last fall, partially to spark Congress to complete its work on a new farm bill. It was understood that the new insurance program in the new farm bill would end the need for payments to the Brazilian Cotton Institute. The Brazilian government has staved off retaliatory measures against the U.S. because of an understanding that the new farm bill was coming.

NCC stated the Brazilian growers don't think a new farm bill settles everything. "The comments by the Brazilian growers that they would support retaliation are deeply disappointing to U.S. growers who have delivered significant policy reform, supported further modifications to the cotton provisions, supported the request to expand authority to use the nearly $500 million already transferred to the BCI, and supported maintaining the Framework Agreement. Although their comments were couched in politically correct terms like “single undertaking,” it is clear the Brazilian growers simply want more money in addition to the policy reforms. It is also clear that they are willing to misrepresent the insurance program to achieve their objective."

The Cotton Council also noted the market conditions globally are significantly different than the 1999-2005 time frame under which Brazil brought its WTO case against the U.S. Cotton acres in the U.S. are down 21% over the last five years while Brazilian cotton acres are up 27%. World cotton prices also are 88% higher than the time frame of the WTO challenge.

NCC noted the switch to solely a crop insurance program in the new farm bill is a major reform for U.S. policy. "It is time to put this matter behind us, but the reported comments by the Brazilian delegation are not a step in the right direction," NCC stated.

Earlier this week in San Antonio, Agriculture Secretary Tom Vilsack indicated he was concerned about possible retaliatory tariffs and other moves Brazilian officials have stated could go into effect if they aren't satisfied with the new legislation.

But He Promised ...

Environmental Working Group is spearheading a press conference Thurday in DC. With a handful of Democratic lawmakers, the Center for Food Safety and the president of Stonyfield Farm to complain that President Barack Obama hasn't kept a 2007 campaign pledge to label foods containing ingredients from biotech crops.

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Posted at 8:55PM CST 01/15/14 by Chris Clayton
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