A Farm Policy Battle continues to wage in the U.S. House of Representatives this week showcasing the escalating issue over how Congress must change current U.S. agricultural programs in the 2012 Farm Bill ruled as “trade distorting” by the World Trade Organization (WTO).
“Do NOT Pay the $147 Million…”
Passed By Voice Vote
During the U.S. House Appropriations (full) Committee hearing on May 31, Congressman Jeff Flake (R-AZ), (a member of the Tea Party Caucus that promotes fiscal responsibility) offered an amendment to the Agriculture Appropriations bill that reduces direct payments to U.S. cotton producers by $147 million, the amount equal to the Framework Agreement with Brazil. Congressman Flake’s amendment was adopted by a voice vote of the Appropriations Committee members.
In addition, Congresswoman Rosa DeLauro (D-CT), offered an amendment to the Agriculture Appropriations bill that eliminates funds available to pay Brazil cotton farmers, directing the funds to the U.S. domestic feeding program for women, infants and children (WIC). Congresswoman DeLauro’s amendment also passed the Committee by voice vote.
During upcoming deliberations Monday evening on establishing rules of debate on the Agriculture Appropriations bill, Rules Committee Chairman David Dreier (R-CA) may claim these amendments violate House Rule XXI as “legislating on appropriations bills,” and raise a point of order against their consideration. The hearing may prove interesting since 7 (4 Republicans and 3 Democrats) of the 13 committee members supported the Kind Amendment during floor debate of H.R. 1 back in mid-February. (See Background below for more information on the Kind Amendment).
Essentially the Flake and DeLauro amendments take paying Brazil the $147 million off the table, enabling Brazil to retaliate, putting hundreds of U.S. products and firms at risk. While these amendments are not likely to become law anytime soon, they are impacting the long-term farm policy debate, showcasing that Members of Congress continue to elevate the debate putting more pressure on the House and Senate Agriculture Committees to either alter farm policy to meet the WTO appellate decision or… put $800 million of U.S. products in the cross-hairs of a trade war with Brazil.
And the Alternatives are…?
Altering current policy may prove a tough chore as agricultural groups seem to have chosen more of a defensive strategy to protect (or only slightly modify) the besieged farm programs. To this point, they have offered little in substantive alternatives. The American Farm Bureau continues to support “the direct payment program, marketing assistance loans, the counter-cyclical program, a simplified ACRE program and risk management programs.” The National Corn Growers Association (NCGA) is seeking to improve the Average Crop Revenue Election (ACRE) program, the American Soybean Association (ASA), the National Association of Wheat Growers (NAWG) and NCGA are seeking modifications to the crop insurance program that will create broader appeal across the varying production regions of the country.
As background, in August 2009, the cotton case against the U.S. won by Brazil in the World Trade Organization (WTO) maintains a caveat that allows the Brazilian government to retaliate against the U.S. on more than $800 million of U.S. goods annually. As a last resort, Brazil may also restrict U.S. intellectual property (IP) rights (patents & copyrights). Brazil initiated and won the dispute over the current marketing assistance loan (MAL), counter cyclical payment (CCP), and export credit guarantee programs. Each program has been policy staples in the current and previous farm bills.
Under a Framework Agreement reached in June 2010, Brazil agreed not to proceed with retaliatory measures; the U.S. agreed to annual payments of $147.3 million to the Brazilian Cotton Institute, an organization recently defined by the International Center for Trade and Sustainable Development as “finalizing its operating structure.” U.S. trade negotiators are also continuing quarterly discussions on potential limits of trade-distorting U.S. farm subsidies. Both parties recognize that changes to the MAL and CCP programs must occur in the 2012 Farm Bill to avoid Brazilian retaliation.
On February 18, Congressman Ron Kind (D-WI) offered an amendment on the floor of the U.S. House of Representatives during open debate on HR 1, the full year Continuing Appropriations bill. The amendment would have prevented U.S. funds from being used to provide payments to the (inoperable) Brazil Cotton Institute. Congressman Kind argued that the US should be focusing on reforming farm policy rather than just compensating Brazil and ignoring the long-term problem.
Congressman Flake (R-AZ), spoke during debate on February 18 stating, “We cannot continue to send money to Brazil so that we can continue to subsidize agriculture here. It just makes no sense at all.” The Kind amendment failed 183-246. (To view our analysis of this vote contact Cansler Consulting.)
Should Your Organization Get Involved?
With debate already in progress on the 2012 Farm Bill and more business sectors having potential of being impacted by the outcome, now is NOT the time to sit on the sidelines. Companies whose products are on the list of goods subject to suspension of Brazil’s concessions in the WTO must be proactive in this debate to protect profits and jobs.
As an agricultural lobbying firm, Cansler Consulting is well versed in the intricacies of the 2012 Farm Bill and all the factors and agendas involved. If your organization needs its interests protected during this time of decision, please contact us today at (202) 714-2822 for a consultation today to see how we can help your organization build support where it needs it most.