Brazilian Bad Acts Receiving Unwanted Attention
Brazil. We tend to associate it with some of our favorite pastimes—coffee, chocolate, soccer… But what most Americans don't know is that Brazil has taken up a pastime of its own—criticizing U.S. farm policy and American agriculture, as we know it.
With the largest national economy on the continent and now ranked the world's leading exporter of agricultural goods, Brazil's boom has made it the crown jewel of South America.
And yet, the Brazilian government claims that U.S. farm policy prohibits their agriculture industry from being able to compete with ours.
Something didn't add up here, so we took a look at Brazil's agricultural empire and its practices. As it turns out, we weren't the only ones looking.
DTB Associates, a Washington, DC-based law firm, recently released a landmark study that showed Brazil and other developing countries to be in gross violation of World Trade Organization (WTO) subsidy limits.
The WTO measures subsidies and price supports to the farm sector through a calculation known as the Aggregate Measure of Support (AMS) and its member countries are required to maintain subsidization within that AMS cap.
The United States and the European Union—long the focus of WTO negotiations—are both well under their respective caps, while Brazil has greatly exceeded WTO limits—by a couple billion dollars.
Among the most egregious subsidy examples included in the eight-page profile of Brazil:
- $64 billion in subsidized or mandated agricultural credits for the 2010/11 crop—this was up from $7.5 billion 10 years earlier.
- Legislation under consideration to provide $14 billion in direct farm subsidies and the rescheduling of $50 billion in farm debt.
- A complex web of support programs that guarantee minimum commodity prices—in 2010, these programs resulted in a $785 million benefit for wheat producers, $1.1 billion for corn growers, $908 million for rice farmers, and $276 million for cotton producers.
And these calculations don't even include the impact of the substantial credit subsidies provided, or the fact that $43 billion of these credits are estimated to be overdue.
And it didn't stop there.
Texas Tech University recently published a handbook of agricultural subsidies to aid lawmakers and trade negotiators in pinpointing hard-to-track, trade-distorting policies in global commodity markets.
The outcome? Let's just say, if it had been a student handbook, Brazil would have been expelled from school.
Texas Tech found programs supporting Brazil's massive ethanol industry, including usage mandates, preferential tax treatment, and storage credits. It also found enough price supports and credit subsidies to make the American farm budget look like petty cash.
But it seemed that financial immorality was just the tip of the iceberg. Just weeks after these studies surfaced, Brazilian sugar producers made headlines (again) for the inhumane treatment of workers.
Nearly 300 Brazilian employers submit workers to slave-like conditions, the country's Labor Ministry said on January 2. The government's "dirty list" of offenders increased by 52 companies since it was last updated.
And just two weeks ago, a brand new $2.2 billion subsidy for sugarcane and ethanol producers was unveiled—helping to boost production and undercut world competitors.
U.S. agriculture on the other hand, backs more than 20 million good-paying U.S. jobs, from farm to table, and operates at less than one percent of the federal budget. Considering their track record, it might be time for Brazil to focus on its own policies, rather than worrying about ours.
 
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