Brazil is preparing to challenge new U.S. cotton subsidies at the World Trade Organization, the country’s Agriculture Minister Blairo Maggi told Agri-Pulse in an interview published Wednesday.
The WTO ruled in favor of Brazil in its last challenge to U.S. support for the cotton industry, including direct payments to farmers, exporters and millers. The two countries in 2014 settled the decade-long dispute, with the U.S. agreeing to pay a final $300 million contribution to the Brazilian cotton sector – after also having made monthly contributions beginning 2010 – as well as change cotton support programs in the 2014 farm bill by creating a new crop insurance program.
But Congress in the Bipartisan Budget Act of 2018 authorized seed cotton to be eligible for traditional commodity support programs like Price Loss Coverage, after the industry waged a years-long lobbying campaign contending the crop insurance program didn’t offer enough protection. The Congressional Budget Office estimates the new cotton subsidies will cost about $400 million a year.