In particular, Brazil said it wanted modifications to countercyclical and marketing loan programs for cotton. WTO ruled that payments under both programs violated trade commitments. The WTO also ruled against guarantees issued for credit that U.S. banks or exporters extend to approved foreign banks for purchases of cotton and other U.S. agricultural exports. Brazil is in discussions with the United States to make adjustments.
The Senate passed a farm bill (S 3240) in June, and the House Agriculture Committee approved its version in July. The House has not voted on the committee bill because of differences within the Republican caucus over the level of cuts to the nation’s largest domestic food aid program, the Supplemental Nutrition Assistance Program. At a Sept. 21 news conference, Speaker John A. Boehner told reporters that the House “would take up the issue of the farm bill,” but said he did not say in what fashion.
News reports indicate that Brazilian officials don’t believe either bill fully addresses their concerns. Both bills replace the cotton countercyclical program with versions of the Stacked Income Protection Program — known as STAX — proposed by the National Cotton Council. That plan would create a revenue protection insurance program to apply to small losses by cotton farmers not covered by crop insurance.
The House bill includes a reference price or a minimum price level and keeps the current cap of $5.5 billion for export guarantees from fiscal 2013 to 2017. The Senate version of the cotton proposal has no reference price and sets a cap of $4.5 billion over the same period for the export credit program.
Vilsack said it might be difficult to convince the Brazilian government that lawmakers will act in the lame duck or early in the next Congress.
“It’s going to be complicated. We’re basically counting on people who haven’t been able to solve these significant problems in two years being able to do it in three to four weeks,” Vilsack said.