House Cuts Subsidies to Brazilian Cotton Industry

Earlier this week, the U.S. House of Representatives voted to end subsidies to the Brazilian cotton industry. The payments were initiated in April 2010, in response to a series of rulings by the World Trade Organization. In 2008, the WTO ruled that American cotton policies were inconsistent with free trade agreements it had entered into. As a result of this ruling, Brazil announced it was planning to impose higher tariffs on over 200 exports to the U.S., countermeasures sanctioned by the WTO.

The payments to Brazil, part of an annual $147million fund, were orchestrated by the U.S. Trade Representative. The negotiation of these funds prevented the imposition of retaliatory Brazilian tariffs. If passed by the Senate, this amendment would, for all intents and purposes, undo the trade agreement with Brazil.

The Thursday votes also included a series of agricultural appropriations and amendments to bills funding the Department of Agriculture. Included in the vote were a series of amendments that blocked repayment of cotton loans at adjusted prices, and would have stopped cotton storage payments. All of these amendments failed, much to the satisfaction of the National Cotton Council.

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Written by: Justin Ellison / Farm Plus Staff Writer