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Agricultural News

Rep. Ron Kind Slams Brazil Cotton Deal Costing Taxpayers $300 Million

Wed, 01 Oct 2014 17:30:45 CDT

Rep. Ron Kind Slams Brazil Cotton Deal Costing Taxpayers $300 Million

U.S. Rep. Ron Kind (D-WI) harshly criticized the deal reached between the United States and Brazil regarding World Trade Organization (WTO) compliance in the cotton industry. The end result is a $300 million payout made to Brazilian cotton farmers.

"This outrageous waste of taxpayer dollars continues. Our annual payoffs to Brazilian cotton farmers should have been eliminated long ago, but we're sending them a $300 million payment instead," said Rep. Kind.   "I pushed to resolve this mess when Congress was debating the last Farm Bill, but Congress didn't act and now we are left with a bad deal that's paid for by American taxpayers."

The terms of the deal include a one-time payment of $300 million to the Brazilian cotton industry, a requirement that Brazil consult with the U.S. before moving to the WTO in the future, and a promise of no further WTO litigation through 2018 (when the current Farm Bill expires). But the agreement is only operational for the duration of the current Farm Bill, and leaves the U.S. open to claims made from outside the cotton industry.

Payments to the Brazilian cotton industry have been occurring for years. In 2008, Brazil successfully argued to 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.

Rep. Kind has been a longstanding advocate for eliminating payments to Brazilian cotton farmers, and has repeatedly pushed for legislation to end the practice of sending $147 million in taxpayer dollars to the Brazilian cotton industry each year. The deal announced today is the result of Congressional failure to adopt comprehensive subsidy reform.

"We need to get our house in order and reform our subsidies programs in their entirety. Sending a huge payoff to Brazil is not the answer," concluded Rep. Kind. "If my old boss, the late Senator Bill Proxmire, were still giving out his famous Golden Fleece Awards our policy on Brazilian cotton would be a guaranteed winner."



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