Agriculture Secretary Ann Veneman was not exactly overwhelmed with questions when she finished her keynote address to USDA's annual Agricultural Outlook Forum in Arlington, Va., Feb. 20.
As she looked around the audience of 1,100, someone finally asked her about obesity. Then she took a couple of relatively innocuous questions about disaster aid and the European Union's ban on biotechnology products before a young man asked for the microphone.
“My name is Antonio from Brazil,” he said. “We are hoping for the Free Trade Area of the Americas, if it is going to be free. Total support was made in 2001. It was $95 billion. In Brazil, it was a half-billion dollars. What means free trade?”
Although his numbers were more than a little exaggerated, Antonio was criticizing the different levels of government support provided to farmers in the United States vs. that for farmers in Brazil.
Something about the halls of power around Washington must turn normally warm, gracious Brazilians into the “junkyard dogs of agriculture” because Antonio was not the only questioner from Brazil at the Forum. Some were not as confrontational, but all challenged U.S. farm policy.
In the Forum's Sugar and Sweeteners session, Marcia Donner Abreu, an official with the Brazilian Embassy in Washington, took exception to an American Sugar Alliance speaker's statement that Brazil was subsidizing its ethanol production and that its frequent currency devaluations amounted to a subsidy for its farmers.
“We have not subsidized our ethanol production since the early 1990s, and a currency devaluation is not a subsidy,” she said. “We are competitive because the Brazilian farmer is the lowest cost producer in the world.”
“Our studies show there has been cross-subsidization of the ethanol industry in Brazil,” Don Phillips, trade advisor to the American Sugar Alliance, shot back. “The construction of the manufacturing plants was subsidized, and the government mandate of the national use of ethanol as a fuel may not be a subsidy, but it still is a factor in its cost.”
The belligerent foreign questioning is becoming all too common. Last year, a Brazilian bank executive, invited to speak about the prospects for the Brazilian soybean industry, practically boasted that Brazilian farmers eventually would put the United States out of the soybean business.
The day before the Forum, the Brazilian government requested a dispute settlement panel under the World Trade Organization to resolve the claims they began floating last summer that U.S. farm programs have harmed the Brazilian cotton industry to the tune of $600 million.
In a presentation during the Cotton Outlook portion of the Forum, Mechel S. Paggi of California State University in Fresno said the Brazilians' choice of targets, which include domestic support for the 1999-2002 marketing years; export subsidies for those years; all programs applicable under the 2002 farm bill; and export credit guarantee programs, are puzzling.
“We've been told they originally intended to go after the soybean programs,” said Paggi. “But we lowered the soybean loan rate, which confused them, and they decided to go after cotton instead. And while Brazil is dealing with past programs, we are focused on the future.”
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