ABRAPA Has Evaluated The New Farm Bill

The Brazilian Association of Cotton Producers (ABRAPA) has evaluated the new Farm Bill, which ends the subsidies given by the US Government to cotton growers.

According to the market estimates and the first analysis made by advisors of ABRAPA and technicians of the Government of Brazil, the new Farm Bill and insurance programs offered by it tend to cause even greater distortions in prices and cotton production than in the past, ABRAPA president Gilson Pinesso said in a press release.

Although the new Farm Bill eliminates the direct payments to US producers, it creates a new mechanism that is complementary to the existing one. In addition, the new Bill allows the US Government to pay up to 80 percent of insurance premium, the release said.

On February 20, Brazil’s Chamber of Foreign Trade (CAMEX) will be meeting to decide on next action against the US companies in view of the violation of the WTO decision by the US, and the Brazilian cotton growers will support CAMEX, Mr. Pinesso said.

In 2010, Brazil had challenged US cotton subsidies at the World Trade Organization (WTO) and won authorization to receive US$ 831 million per year, with US$ 591 million in products and about US$ 240 million in intellectual property.

Through a memorandum of understanding (MoU), the US Government agreed to make an annual payment of US$ 147.3 million, in monthly installments to the IBA, until the Farm Bill was passed, which would eliminate the long-standing subsidies that caused the dispute.

The last farm bill expired on September 30, 2013, and the US Government stopped paying its monthly installments to the IBA since September 2013.