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Karl's Column - Say it Ain't So

by Carolyn Binder

Yes, it IS so, although most of us will agree it should not be so..but then, we really don’t know the whole story, do we?  Well, here’s some of what we do know. We, as U.S. taxpayers are paying Brazil 147-million dollars each year, because of a disagreement over agriculture policy in this country.  In case you ever wonder why our government, no matter the dominant political party of the time, carefully avoids dealing with the World Court, and other such extra-national organizations, take note of this Brazil story - - continuing now - - the World Trade Organization determined the U.S. cotton program is a violation of international trade agreements and authorized Brazil to levy tariffs worth more than 800 billion dollars annually against U.S. products, both agricultural and nonagricultural.  Instead of the penalty, the U.S. agreed to pay Brazil 147 million dollars annually, while working to reform the cotton program during the 2013 Farm Bill negotiations.  The last we heard, by way of Michigan Farm Bureau, is that with the government shutdown the U.S. quit making payments to Brazil.  I guess we must assume that now that the shutdown has been reopened, we’re paying again.  But, we also know that Brazil is still not happy, because the Brazilian government is reportedly unsatisfied with the reforms made to the U.S. cotton program in the 2013 Farm Bill as it is now being considered in Washington.
Brazil, we are told, has several options at this point, including litigation, or trade sanctions against the U.S.
By now, maybe you’re wondering how much cotton is produced in Michigan.  More likely, you know very well, Michigan doesn’t grow cotton - - so, why do we care whether Brazil is or is not happy?  It’s the aforementioned trade sanctions, friends.  Michigan agricultural and nonagricultural products presently are traded to Brazil.  I don’t know the value of that particular trade issue, but I’m pretty sure it’s significant.
Brazil is obviously planning well ahead of current events, as it is already objecting to the adjustments to the U.S. cotton program included in the proposed  2013 Farm Bill.  For one thing, I think it’s highly unlikely there’ll be a 2013 Farm Bill - - although it may still be called that, even if it doesn’t pass until after the end of this year.
There are a few things other than the Brazilian Conniption that could interfere. SNAP is one of them.  The Senate version of the proposed Farm Bill cuts that program; The House version proposes to cut four times the Senate proposal.  Somewhere out there still lies the proposal to set that program - - Supplemental Nutrition Assistance Program - SNAP - out of the Farm Bill entirely and give it stand-alone legislative stature.  Even if the concept wins approval, you know there’ll be a terrible fight between the House and Senate on the SNAP budget