Trade

U.S. Subsidies For Brazilian Farmers (Cont'd)

Thanks to Planet Money listener Aliza W. for flagging this amendment to the House Appropriations bill:

Amendment No. 89—Rep. Kind (D-WI): The amendment would prevent any funds made available in this Act from used to provide payments to the Brazil Cotton Institute.

She thought we'd be interested because we did a podcast on an eight-year trade battle between Brazil and the U.S. over U.S. cotton subsidies. The Brazil Cotton Institute was the strange result of that battle.

Quick recap: Brazil said U.S. cotton subsidy programs are illegal under the rules of the World Trade Organization. The WTO agreed. But the U.S., for the most part, has not changed its subsidy programs.

Instead, the U.S. is paying Brazilian cotton farmers $147 million a year through the newly formed Brazil Cotton Institute.

"It speaks to the lunacy of our current farm programs," Rep. Ron Kind told me.

"Brazil successfully challenged our program in the U.S.," he said. "You would think our normal, reasonable response would be to fix our programs. Instead, a new program was created to buy off Brazilian cotton farmers."

The amendment is unlikely to survive the legislative process. Under the current agreement, payments to the Brazilian Cotton Institute will continue for at least another year, until Congress passes the next farm bill.

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