Vilsack Says Farm Bill Stalemate Might Worsen Trade Problems with Brazil

By Philip Brasher, CQ Roll Call

Agriculture Secretary Tom Vilsack is turning up the pressure on lawmakers to finish a farm bill this year, suggesting that a continued stalemate over the legislation could lead Brazil to retaliate against U.S. exports.

The United States has been paying Brazil $147 million a year to temporarily settle a trade challenge the Brazilians won against U.S. cotton subsidies. The payments are supposed to continue until Congress replaces the subsidies, but Vilsack told key officials in Brazil this week that the monthly installment in September would be cut in half due to the budget sequester and that he had no authority to make further payments after the federal fiscal year ends Sept. 30.

“They expressed some concern that without a payment and an adequate payment in September and no farm bill, we leave them very little wiggle room or option in terms of how to deal with this situation,” Vilsack said in a telephone interview as he prepared to return to Washington.

The Brazilians in turn “very pointedly” reminded two senators who accompanied him, Agriculture Chairwoman Debbie Stabenow, D-Mich., and Roy Blunt, R-Mo., of the retaliatory measures authorized by the World Trade Organization case won by Brazil, Vilsack said.

Both the Senate-passed farm bill (S 954) and the House version (HR 2642) would create a new insurance program for cotton to replace the existing subsidies. Brazilian officials recently wrote lawmakers outlining some concerns with the legislation, including a provision in the House bill that would continue direct payments to cotton farmers for two years, Vilsack said. The continued payments are intended as a bridge while the insurance program is being established.

The U.S. delegation met separately Monday with Brazilian Agriculture Minister Antonio Andrade and Foreign Minister Eduardo dos Santos.

Chris Gallegos, a spokesman for Republican Sen. Thad Cochran of Mississippi, ranking member of the Senate Agriculture Committee, said the situation with Brazil demonstrates why another farm bill needs to be passed as soon as possible. “Cotton growers in the United States and Brazil have worked to address problems identified by the World Trade Organization and the cotton program in the Senate’s farm bill deals with those concerns,” said Gallegos.

House Republican leaders have delayed starting negotiations with the Senate on a final farm bill until the House takes up a separate measure that would slash spending on food stamps by $40 billion over 10 years, 10 times as much as the nutrition cut contained in the Senate farm bill.

The House Agriculture Committee’s ranking Democrat, Collin C. Peterson of Minnesota, has warned that a $40 billion cut could make it impossible to reach a compromise with the Senate, dooming the farm bill for this year. Vilsack would not go that far.

“I’m not going to say that I’m pessimistic about this,” he said. “What I’m focused on here is that there are real consequences of not getting this done.”

Congress is likely to pass a continuing resolution to keep the government operating after Oct. 1, but Vilsack said it would be difficult for Congress to use that measure to authorize continuing the payments to Brazil because they would require a spending offset.

A congressional aide disputed Vilsack’s claim that he lacked authority to continue the payments in 2014. Vilsack said the payments are made out of his agency’s Commodity Credit Corp. and that it would need to be repaid.

Source: CQ News
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