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House Moves Could Cause Trade Issues

House Moves Could Cause Trade Issues

Shifting payments from Brazil to domestic programs could create trade issues.

The House Appropriations Committee approved amendments that have implications for international trade during its consideration of the fiscal 2012 agricultural spending bill on May 31. In addition, an amendment that would tighten the eligibility rule for U.S. farmers to qualify for direct payments under the 2008 farm bill passed easily on a voice vote.

An amendment sought by Rep. Rosa DeLauro (D., Conn.) to re-route the $147 million the U.S. now pays to the Brazilian cotton industry to U.S. domestic feeding program for women, infants, and children, easily succeeded on a voice vote with bipartisan support. Explaining the list that USDA had made about how needy women and children would be prioritized to lose WIC benefits if the program is cut, DeLauro cried, “$147 million to Brazilian farmers – where is our sense of justice to women and children in the United States?” Her amendment would restore some of the WIC funding cuts by paying for them with the $147 million.

Even before DeLauro’s amendment, an attack on the payments to Brazilian cotton payments came from Rep. Jeff Flake (R., Ariz.), a congressman who has long sought to reform U.S. farm program payments. He, too, won an easy voice vote for an amendment that would have taken the $147 million in payments to Brazilian cotton farmers out of the approximately $3 billion the federal government pays to U.S. cotton farmers in farm program benefits.

The payments to Brazil came as part of a 2010 negotiated agreement between the two countries, after Brazil won a long-sought World Trade Organization ruling and an appeal against aspects of the U.S. cotton program. The payments help forestall Brazil’s right to retaliate with punitive duties against some $829 million worth of U.S. exports to that country and are paid to the Brazilian Cotton Institute, set up to help build capacity and technical assistance to Brazil’s cotton industry.

In a separate amendment, a second amendment from Rep. Flake that would tighten eligibility for farmers for direct payments under the 2008 farm bill was approved on an easy voice vote. Flake reported that under the current rules, a farm couple with adjusted gross income of $1.5 million would be eligible for direct payments. “I don’t think anyone, outside of this town, could justify that a farm couple could have an adjusted gross income of $1.5 million and still get subsidized,” Flake said.


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