U.S. Rep. Ron Kind today with his colleagues Rep. Jeff Flake (R-AZ) and Rep. Earl Blumenauer (D-OR) introduced legislation to put an end to the $147 million in taxpayer dollars going to the Brazilian cotton agribusiness each year.
"Failing to reform our own domestic cotton program has resulted in millions of taxpayer dollars unnecessarily subsidizing Brazil's cotton industry," said Rep. Kind. "This has got to stop. It's clear that the Agriculture Committees aren't going to make the commonsense reforms we need to eliminate these payouts -- which is why I've authored this bill. We've got to get our priorities straight to ensure a fiscally responsible, smart food and farm bill for the 21st century."
Kind's legislation simply stops all payments to the Brazilian Cotton Institute. The bill also puts pressure on the House and Senate Agriculture Committees to make the necessary reforms to be World Trade Organization (WTO) compliant, ensuring American goods, services, and intellectual property aren't subject to trade retaliations.
"It's absurd that U.S. taxpayers have been on the hook for millions to Brazil cotton farmers for years because of Congress' unwillingness to reform our cotton subsidy programs," said Rep. Flake. "Eliminating this penalty funding will put much-needed pressure on Congress to actually rein in our cotton subsidies so they're WTO-compliant."
"The current model of paying off Brazilian cotton farmers only serves to coddle corporate agribusiness here in the U.S.," said Rep. Blumenauer. "Rather than continuing to spend millions of taxpayer dollars in this way, American cotton farmers need to get their own house in order. This legislation is an important step in reducing the cost of the cotton program to the American taxpayer, while simultaneously encouraging reform."
In 2008, Brazil successfully argued before the WTO that U.S. agriculture subsidies to cotton producers violated WTO agreements. Following the WTO's ruling, instead of reforming the cotton program, when facing retaliatory tariffs and sanctions from Brazil, Congress and the Administration agreed to pay the Brazilian cotton industry $147.3 million a year -- the amount determined as the losses Brazilians incur as a result of U.S. cotton subsidies.
The Senate Agriculture Committee had an opportunity to put an end to the subsidies going to the Brazilian Cotton Institute in their markup of the farm bill this week. Unfortunately, they instead created an entirely new, heavily subsidized "insurance" program for American cotton producers, which covers shallow revenue losses, and costs $3.2 billion over 10 years.
"Adding a new shallow revenue loss program with unlimited payments will only burden taxpayers more and will surely be challenged again by Brazil at the WTO, risking another loss and even more costly, unnecessary payouts to foreign producers," said Rep. Kind.