GARY ADAMS right shares the podium with PCG President Shawn Holladay at the recent PCG annual meeting in Lubbock

GARY ADAMS, right, shares the podium with PCG President Shawn Holladay at the recent PCG annual meeting in Lubbock.

Brazil WTO case behind changes in cotton policy

World Trade Organization dispute brought by Brazil made cotton a target in farm bill debates.

The bus many in the cotton industry believe they were thrown under in the Agriculture Act of 2014 was not driven by the National Cotton Council, various state or regional cotton organizations or even the Senate and House Agriculture Committees.

It was Brazil behind the wheel.

Budget constraints also played a role, said Gary Adams, National Cotton Council president and CEO.

Adams, in answer to a question following his presentation to the Plains Cotton Growers annual meeting last week, said the decade-long World Trade Organization dispute brought by Brazil made cotton a target in farm bill debates.

“Brazil won the dispute on several points,” Adams explained to the questioner who was asking how to justify the loss of covered commodity status to gin customers.

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Price protection, Adams said, was a key target in the cotton program and one where Brazil prevailed before the WTO. With the victory, Brazil was given retaliatory options that would have involved products other than cotton and other than agriculture. Intellectual property rights would have been on the table as well as pharmaceuticals and products from other key U.S. industries.

“That brought more attention to the farm bill debate and more entities, including the Chamber of Commerce.”

Direct payments and crop insurance were not on the list of transgressions Brazil sought to eliminate, Adams said.

“But direct payments were off the table because of budget issues. So we had to look at insurance options and developed STAX. We maintained the marketing loan with some adjustments. “Without some resolution between the United States and Brazil and with many other interests at the table, we could have lost even more,” Adams said.

“We knew it was unpopular, especially in light of where prices are now. The Council will continue to work to improve the safety net. Some areas have not been implemented in the way they were intended.

“We also need to look at issues related to production costs.”

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