Rep. Ron Kind (D-WI) and Rep. Earl Blumenauer (D-OR) are promoting legislation that would force the US to be a scofflaw. Last week, two members introduced legislation that would prohibit the US from making an annual payment of $147 million to Brazil.  They’re outraged that the US makes this payment – a sort of hush-money – to induce Brazil from punishing the US with more painful penalties under a WTO ruling against US cotton subsidies.

A cotton field in North Carolina. Photo: Liliana Rodriguez / Oxfam America

Kind and Blumenauer think it’s absurd to be paying off Brazil when we have a budget crisis, and want to bring pressure on Congress to reform the cotton subsidies rather than make this annual payment.  This would happen through the Farm Bill, which Congress was unable—or unwilling—to pass last year.  The House Agriculture Committee will restart the process on May 15 with a “markup” in the committee.

Even if Congress does pass a new Farm Bill, it’s not clear that it will reform cotton subsidies.  Last year’s draft versions of the Farm Bill didn’t come close, and Brazil could still retaliate.

Strangely, Brazil has been very gentle with the US and has refrained from harsher penalties for years.  When Congress failed to pass a Farm Bill and reform cotton subsidies last year, Brazil meekly agreed to keep the current payment.  They might not get their full payment this year, actually, as US Agriculture Secretary Vilsack may think the budget sequester, which shaves spending all over the government, will apply to the Brazil payment.

Perhaps, Brazil’s patience with the US over cotton subsidies can be explained by the fact that the Brazilian Ambassador to the WTO, Roberto Azevedo, is vying for a new job as head of the WTO. It certainly wouldn’t help his campaign to alienate one of the biggest member states. I’ve met Minister Azevedo and respect and like him a lot, so I don’t mean to impugn him or imply anything unethical.

At some point, the WTO job will be filled and then, perhaps, the US will have run out of leverage and exhausted Brazil’s patience.

Politico yesterday reported a rumor that US food aid programs could see major changes in the next budget. The article frames this move as putting aid “on the chopping block,” but it is not at all clear what is really going on.  Enacting major cuts to food aid programs would be a terrible idea that would cost lives without making a dent in our debt.

But there is another, more hopeful possibility that the administration is about to push for long overdue reforms that would make US aid programs more effective and cost efficient. This could be a very, very good thing.

Let me explain. The US reaches millions of people each year with life-saving aid. From the Horn of Africa to the Sahel to the most recent humanitarian crisis in Syria, US assistance to address hunger and food insecurity is crucial. The US is the most generous donor of food assistance in the world and gets a lot of credit for this.  Cutting aid doesn’t make sense, but why might the Administration seek to fundamentally change this program?

A child in Dire Dawa, Ethiopia stands near a wall made of USAID food aid containers in the flood-destroyed area of Bahere Tsege in 2006. Photo: Liz Lucas/Oxfam America

The reason is that current US food aid programs are excruciatingly inefficient and in some instances counter-productive to helping people build sustainable agricultural livelihoods. Oxfam has been outspoken in its criticism of the way in which the US runs its food aid program. And we’ve offered common sense reforms to make the programs more efficient—reforms that would allow US assistance to reach millions of more people without costing a single extra penny. We applauded Chairwoman Stabenow and Ranking Member Roberts of the Senate Agriculture Committee for their leadership and steps to reform the food aid program as they wrote a new Farm Bill last year.  The bill passed the Senate on a broad bipartisan basis, but floundered in the House.

If the Obama Administration puts forward a proposal to pursue these kinds of reforms, it would mark an effort to break the stranglehold of special interests in the US who profit from the current rules, regulations, and red-tape governing food aid programs. It would be a bold and important step.

Real reforms would give aid humanitarian agencies greater flexibility, including the ability to purchase food from the cheapest, most efficient source. This would in turn reduce costs and speed delivery. It would bring our programs into the 21^st century, in line with most other countries. This is precisely what a recent USDA study of local and regional procurement projects demonstrated. For almost every commodity examined, buying from local or regional sources was cheaper and uniformly faster than shipping it from the US. Many aid groups already do this with their own money and through other emergency aid accounts such as the Emergency Food Security Program out of the International Development Account.  But the primary food assistance program remains essentially outdated, lumbering, and wasteful.

Such a change would also clean up the jurisdictional mess created by current configuration of food aid programs, which are authorized in the Farm Bill, funded through the Agriculture Appropriations bill, but implemented by USAID. Not only would reform rationalize the system, but it would help create a more cohesive approach to the current patchwork of programs to deal with global hunger.

Oxfam America campaigned last year saying that Washington should “stop playing with food aid.” Thousands of people supported us in sending a message to their lawmakers to enact this reform.  If the rumor pans out and the Obama Administration is serious about food aid reform, it would seem the message got through.  Good on President Obama!

I doubt members of the Agriculture Committee thought the eleventh-hour Farm Bill extension would be the conclusion of their year-plus efforts to negotiate a new and improved five-year Farm Bill.

The last-minute inclusion of a one-year extension of the commodity groups’ favorite farm subsidies and rural programs were tucked into the final fiscal cliff bill this week. This means that the debate about the future of US food and farm policy and efforts for real reform will have to continue in 2013.

The fiscal cliff bill does the bare minimum of providing continuing authority for life-saving food aid programs, avoiding most of what could be termed the “food aid cliff”.  The US provides roughly half of all food aid globally. If food aid programs had not been re-authorized, a true cliff would have emerged for tens of millions of people displaced by conflict or whose crops are decimated by floods or rain, and who depend on food aid from the US.

Although the extension of the food aid programs is obviously a relief, it’s a program in desperate need of improvement. Unfortunately the extension was not applied to reauthorization of one of the most promising and successful programs of the 2008 Farm Bill, the USDA Local and Regional Procurement Pilot Program (LRP). LRP ensures the most bang for the food aid buck, because it allows the US Government to purchase food aid from the most affordable and efficient sellers. The LRP pilot has proven to be a highly-effective and efficient way to spend scarce aid dollars to help save lives and build self-sufficiency for vulnerable communities.  As has been well documented, LPR can save time and money, allowing crucial aid to reach more people in need of food assistance. It also invests in communities so they can feed themselves, instead of becoming dependent on food aid in the future.

It is the epitome of irony that a deal designed to tackle some of the looming challenges of government spending allows LRP to lapse, thereby doubling down on the more expensive, inefficient, and outdated models of food aid.  It is a wasted opportunity for Congress, not to mention a waste of money for taxpayers. LPR is the kind of program you would prioritize if your aim was really to make federal spending more efficient and effective.

But that’s not what Congress chose to do, a depressing start to the new year. The National Sustainable Agriculture Coalition issued a press release referring to the Farm Bill extension as “anti-reform” and “a disaster for farmers and the America people.”

Congress must extend authority for LRP, and adopt a host of other reforms to US food aid programs when it reauthorizes the Farm Bill in 2013. The Senate version of the Farm Bill, after much work and compromise, included good provisions on food aid reform that must be the starting point for continued discussions.

We may not have totally fallen off the food aid cliff, but we still have a mountain to climb.

Every now and then, I get a call from a colleague in Geneva, asking me about the Farm Bill. Although colleagues in Geneva often find Farm Bill politics confusing, they are quite interested in Farm Bill policy. That’s because US agriculture policy is, effectively, trade policy, since the USA is such a large exporter of agriculture products. And Geneva is the global capital of trade policy, home to the World Trade Organization.

A useful analysis of the next Farm Bill comes from the Geneva-based ICTSD. The authors question whether the new Farm Bill will distort trade more or less than the old one. To do this, they dig through the House and Senate versions of the Farm Bill and try to understand the dazzling complexity of both the existing and new proposed farm programs. Of course, the new Farm Bill is not a finished product, and the House of Representatives has not even passed a bill yet. But the authors do their best.

Central to the new Farm Bill policy is eliminating “direct payments” and using the savings to create or enhance a variety of price and revenue guarantees. Direct payments don’t vary at all based on behavior, weather or prices—they are just automatic payments to farmers. Trade purists like direct payments because they don’t influence farmers’ planting decisions (because they are paid no matter what) and don’t distort trade. But everyone else hates them because they seem like a ridiculous government payout to farmers for doing almost nothing.

The paper concludes that:

“The overall thrust of the new farm bill is that decoupled direct payments that have minimal impact on planting decisions will be replaced by coupled safety net programs that potentially have a large impact on planting decisions.”

The authors project the impact of the new Farm Bill programs, and find rather modest changes; this is because current high crop prices mean government subsidy programs don’t have to pay out. But if prices decline in the future, the new Farm Bill could be more expensive to taxpayers and more influential on farmer’s business decisions.

The paper argues that the new Farm Bill will be more likely to distort trade and harm foreign producers of agriculture products than the status quo. The authors do us a favor and identify which countries’ farmers might be most bothered by the new Farm Bill:

The new Farm Bill will shift the balance of support among commodities. The study finds that projected subsidies for cotton are about three times higher than for other  commodities, which could induce farmers to shift to cotton from other crops—something Brazil is likely to be unhappy about.  And rice producers get a pretty sweet deal in the new Farm Bill, which could induce farmers to produce more rice, something Haitian rice producers might not be excited about. 

Why are cotton and rice winning the Farm Bill? Two maps tell the story.

This map shows where different commodities are grown—notice cotton and rice in orange and black:

And this map shows where farmers are more dependent on government direct payments for their crops in blue and orange :

You can see a rough correlation between farmers who depend more on government direct payments (first map) and areas where cotton and rice (and peanuts) are grown (second map).

In the insular and circular logic of the Farm Bill, commodities that lose subsidies in one area demand—and expect—those subsidies to be made up somewhere else. Since direct payments are being eliminated, the lobbyists for cotton, rice and peanuts have pushed hard—and successfully—for a bigger share of the new Farm Bill subsidies.

But more trade-distorting subsidies for cotton and rice and peanuts is the wrong direction for US farm policy. A better farm policy would be supporting a robust, diverse, and resilient agriculture that is more flexible, less tied to government policy. We need farmers to respond to changing markets and changing weather, rather than Farm Bill dictates. They should invest in creative farming rather than lobbyists. Rigging subsidies and markets only makes the system more rigid, more vulnerable to corruption, to disaster, to bad behavior. Government policy should not be picking one crop over another, one sort of farmer over another.

Rice distributed and sold in Liberia. Photo: Ruby Wright/Oxfam International

With Farm Bill negotiations simmering on the back burner and an all-consuming Congressional focus on dealing with the fiscal cliff, the Alliance for Global Food Security, a group of Private Voluntary Organizations who have opposed common sense reforms to food aid programs, took the opportunity to launch a new study on the use of food aid monetization—essentially the sale of agricultural commodities in developing countries—to generate revenues for use in development programs. The Value of Food Aid Monetization: benefits, Risks and Best Practices sets out to provide additional information and evidence on one of the thornier issues in food aid programs authorized through the Farm Bill.

The problem: As the report rightly notes, the Government Accountability Office (GAO) has, on more than one occasion criticized the practice of monetization as a wasteful and inefficient use of US assistance. In their most recent accounting, the GAO found that over a recent three year period, monetization resulted in a loss of $219 million. The reason? It’s difficult to recoup the full cost of purchase, shipment, and delivery of food aid in competitive transactions in developing countries. Cost recovery for monetization activities for USAID administered programs averaged 76 percent. Activities managed by USDA fared slightly worse.

Then there is the question of market impact. Concerns have long been raised (including in the GAO report) that monetized food aid can compete with locally produced goods (or more relevantly, goods produced by smallholder farmers in the same market/country), disrupting lives and livelihoods.

How the Alliance responds: The study produced by the Alliance admits that on a pure cost recovery basis, monetization programs score poorly. But fixating on how much money is lost in monetization only tells part of the story and ignores all the good that can come from selling food aid. To elaborate this point, the study looks at five monetization activities in Gambia, Guatemala, Uganda, Liberia and Mozambique.

So, what exactly does the report tell us?

• In the cases under review, monetization did not disrupt domestic production or marketing. A positive finding, though I suspect there would have been resistance to publishing cases in which monetization did disrupt markets;

• Even if not explicit, it’s pretty clear that monetization serves as an export promotion program and an export subsidy to US producers. Take this language from the Liberia case study in which rice is the monetized commodity: “The six importers [which dominate rice imports] would not import as much [US] parboiled rice commercially because it would be cost-prohibitive, which is overcome by selling in smaller lots and allowing incremental payments.” Is this why we have food aid programs, to promote US agriculture products abroad?

• Program results achieved from the monetization process (as opposed to the ones achieved with the resulting funds generated through monetization) demonstrate benefits in terms of improving food markets, though not necessarily agriculture markets. For instance, one of the key benefits of wheat sales in Uganda has been the contribution to a stronger milling sector. But no data is presented to demonstrate that the improved capacity of millers has resulted in stronger linkages with farmers, particularly smallholder farmers who are the subject of much focus in Feed the Future and other development programs.

And what does the report not tell us?

West Point Market in Monrovia, Liberia.Photo: Aubrey Wade/Oxfam GB

Whether the positive outcomes associated with the monetization program could be achieved through other means. The crux of the issue is not whether monetization proceeds fund good programs that benefit producers or consumers. It is whether monetization is really the only or the optimal means of achieving positive results. For example, several of the case studies note instances of increased market participation by small vendors because of favorable credit or financing provisions accompanying monetization schemes. But these outcomes could also be achieved through strengthening commercial financial services and other assistance provided directly to traders.

And finally, even if one agrees that this study presents compelling evidence that the practice of monetization should continue to be part of US food aid programs, it does not mean having to accept the status quo. If organizations continue to insist on monetization—and if by law a minimum amount of food aid must continue to be sold on markets—we need smart policies and strong guidance and indicators regarding outcomes and acceptable levels of loss in the program.  Provisions in the Senate-passed Farm Bill take a step in this direction by directing agencies practicing monetization to achieve at least 70 percent cost recovery (though USAID and USDA would have discretion to authorize monetization even in instances where this could not be achieved). Of the cases reviewed in this study, this level is met or exceeded in all but one instance. The Senate provisions would not have precluded any of the positive outcomes these activities appear to have achieved.

From the outside, losing 24 percent of aid resources on average in the process of monetization seems like a terrible waste of scarce resources. But what’s worse is that some aid groups that regularly practice monetization seem to be ok with this cost of doing business and are opposed to the Senate reforms. Shame on them. We should strive to do better.

US cotton field. The WTO granted Brazil the right to retaliate for unfair US cotton subsidies. Liliana Rodriguez/Oxfam America.

What do ketchup, shaving cream, and Viagra have in common?

They all could be targeted for retaliation by Brazil if Congress doesn’t reform the Farm Bill. US exporters of these products, and hundreds more, could pay higher tariffs or lose their patent rights if the Brazilian government imposes trade retaliation against the USA for violating WTO rules on farm subsidies. Brazil brought a legal case to the WTO complaining about US cotton subsidies in 2002. They won the case, proving that US cotton subsidies were huge and unfair. The USA never fully reformed the subsidies, so Brazil asked for, and was granted, the right to retaliate. Hence, the list of products (English version here).

It’s interesting to think about the political calculations underneath the products chosen. Creating a retaliation list is an exercise in practical political economy. How do you create enough economic and political pain on the United States to force a reform of cotton subsidies? Which industries or companies do you target? Do you try to target specific politicians by hitting products and companies that are from their constituency? Or do you try to gain some economic advantage by raising tariffs on some products? Certainly, there are domestic businesses in Brazil that are eager to hurt their foreign competition and lobby for tariffs in their sector.

The thing about raising tariffs is that it hurts the exporting producer, but it also hurts the importing consumer by raising prices and reducing choice. In order to hurt the US, Brazil also has to hurt some Brazilian consumers of US products.

According to the rules, Brazil can impose more than $800 million in retaliation. But $800m in new tariffs is painful for Brazilians also. So Brazil asked for permission from the WTO to retaliate in a different way. Brazil can suspend intellectual property rights on certain products. This is where the retaliation gets really interesting. Brazil hasn’t published a list, but has identified categories for intellectual property rights retaliation. Products could include patents and copyrights on medicines, agrochemicals, music, videos, and software. These products won’t face new tariffs, but Brazilian producers might be able to manufacture and sell these products without paying royalties or licenses.

Brazil was days away from imposing this kind of retaliation in 2010 when officials from the US Trade Representative’s office flew down to hurriedly negotiate a compromise. The agreement was that Brazil would postpone retaliation and the US would pay Brazil $147.3 million annually until a new Farm Bill was enacted.

So far, no new Farm Bill. Not even close. This week Congress will decide whether to extend the current Farm Bill by three months or by a year. Either way, Brazil will have to decide what the next step is. Brazil is once again preparing to retaliate. Brazil may alter the retaliation list and has convened a technical committee to review the list.

In Congress, a game of bluff and bluster is playing out around the Farm Bill. The issue is whether the leaders of the House Agriculture Committee can cajole or coerce the House Republican leaders to bring the Farm Bill to the floor of the House for approval. Time is running out before Congress goes on vacation, and as the calendar gets short, the chance of passing a new Farm Bill into law gets smaller and smaller.

 The Senate, having passed a version of the new Farm Bill, is waiting. The House Agriculture Committee passed a Farm Bill out, but it is stuck in limbo before it reaches the full House of Representatives. The Committee Chair, Frank Lucas of Oklahoma, and the senior Democrat, Collin Peterson of Minnesota are pleading and pushing to get time on the calendar. But House Speaker John Boehner of Ohio has been coy. And the clock is ticking.

Speaker Boehner once sat on the House Agriculture Committee, but he’s no aggie. In the past, he’s taken on agriculture interests in the name of free-market principles and small-government budget thrift. He recently said, “we have a Soviet-style dairy program in America today” and has a record of voting against Farm Bills in the past.

The author sits on a pile of organic cotton produced in Mali with an Oxfam colleague. Cotton producers around the world complain about the US Farm Bill subsidies for cotton. Credit: Oxfam America

There’s a real question as to whether the Farm Bill has the votes to pass. The bill is unpopular among liberals, mainly because it cuts US food assistance programs for poor people. But the bill causes heartburn for many conservatives because it’s anything but a “free market” solution. A conservative think-tank says about the Farm Bill, “the conservative movement has united against these trillion dollar takeover bills that seek to expand the federal government’s role into nearly every sector of American life.”

With opposition across the spectrum, it may be hard to forge the 218 votes needed to get the Farm Bill over the line in the House. Even then, it will have to be negotiated and merged with the Senate version and then re-voted by the House and Senate. All before January, and with very few working days on the Congressional calendar.

A quiet presence on the Farm Bill has been Brazil. For years, Brazil has been waiting for Congress to pass a new Farm Bill, with the expectation that the new legislation will bring the US into compliance with WTO agreements. Brazil won a legal challenge against US cotton subsidies and has the right to retaliate against the US. The US pays Brazil for their patience to the tune of $147m annually, which is a lot of money, but still less than the $800m+ Brazil is entitled to inflict on the US under the WTO rules.

Seeing that Congress likely won’t pass a Farm Bill this year, US trade and agriculture officials flew down to Brazil last week to make sure Brazil doesn’t rush into trade retaliation. They agreed to extend the current agreement for a few more months or until a new Farm Bill is passed.  

But Brazil is sharpening its sword. Because even when a new Farm Bill is finalized, there’s little chance that it will satisfy them and remove unfair subsidies for US cotton production. In June, Brazil reactivated a technical group to decide which US export products would be taxed if they retaliate and products for which US intellectual property rights would be waived. It would be interesting to be a fly on the wall to listen in to the discussion of that group.

This blog post by GROW campaign manager Vicky Rateau is cross posted from Good.

Married young and a mother at 17, Etta Brahim Senussi tries to enjoy the simple pleasures her children bring to her life in parched Andrabad in northern Chad—even as trouble looms. “When my kids are having fun, when they’re not hungry, when they jump left, right, and center, that’s the most pleasure I get,” she said.

But with rain in short supply, Etta worries for the future. Across the Sahel region of West Africa, where Etta lives, 18 million people are at risk of hunger. Low rainfall and water levels, poor harvests, lack of pasture, and high food prices are all contributing to a food crisis. This phenomenon is far from new. In fact, this particular crisis is more challenging because people in Etta’s community are still recovering from the last food crisis, which hit just two years ago and affected 10 million people across the region.

Sometimes it’s hard to know what the word crisis even means. In a “normal” year in the Sahel about 300,000 children—the population of Pittsburgh—die as a result of malnutrition. Lack of investment in small farmers in the region, unfair trade policies, political instability, and an increasingly unpredictable climate leave communities highly vulnerable to even minor weather disruptions. This crisis is a symptom of the broader challenges facing our global food system.

Many of these challenges stem from the $300 billion behemoth U.S. Farm Bill written by Congress every five years. The Farm Bill shapes our food system and affects practically everything grown and eaten here in the United States, but it also has global ramifications. Farm Bill policies can help put food on Etta’s plate or leave her family hungry.

In this year’s Farm Bill there is a crucial opportunity to reform how the United States handles international food aid programs. Simple reforms would enable aid agencies to reach millions more people when crises like the one emerging in the Sahel occur and they would not cost taxpayers a dime. In fact, reform could save taxpayers up to $500 million per year.

Wasteful regulations, written into law to protect special interests, prevent food aid from being purchased locally and regionally, even when it is a more affordable and effective way to save lives. Purchasing food aid this way can meet immediate needs while helping to build long-term sustainable local food systems in communities like Etta’s so they will not need aid in the future. Simple reforms to remove the restrictions could help reach up to 17 million more people with life-saving aid, at no additional cost. Frankly, it’s a no-brainer.

For Etta and the nearly one billion people who go hungry around the world, the food system—manipulated by big agribusiness and special interests—simply doesn’t function. As with any policy, big moneyed backers are fighting to maintain their interests in the Farm Bill. The voices of people like Etta who feel the brunt of our policies, but have little recourse to change them, are barely heard.

Changing food aid rules will not fix our Farm Bill overnight. But achieving the big, structural changes our food system desperately needs will require active and engaged citizens who are willing to stand up for what’s right. Reforming food aid is a good place to start.

Oxfam is aiming to help 1.2 million people across seven countries with programs that include cash transfers and cash-for-work initiatives, veterinary care for the livestock on which many families depend, and access to clean water and sanitation. We are also campaigning to change the root causes of this crisis. Find out how you can support our efforts.

Sometimes a quote says more, much more, than the person saying it intended. Today an article in POLITICO looks into how potential reforms to international food aid programs in the US farm bill could impact the shipping industry.

In defending the wasteful and inefficient practice of mandating that virtually all US food aid is grown by preferred growers and then shipped by preferred shippers from the US to countries-in-need, Clint Eisenhauer, vice president for governmental relations for Maersk, a Danish-based shipping company, said, “but if you could grow the grain in Somalia, people wouldn’t be starving.”

Well, yes. Exactly. Let’s leave aside for a second the irony of an executive of a Danish shipping company lecturing anyone on why Congress should double down on regulations supposedly set up to promote American interests. The real issue is that Eisenhauer’s quote displays a fundamental misunderstanding of why people end up struggling to find enough food in the first place. In many food emergencies, food availability is not the challenge. The challenge is that people are too poor to afford to buy it, or they are displaced by conflict or crises. There is ample food available, often very close to where the hungry people are, but because of economic, political or other shocks, many people just cannot access or afford enough of it to support their families.

But more important than those basic facts is that even in many of the countries that most often require emergency assistance, countries like Sudan, Niger, Ethiopia, and yes Somalia, there is vast, untapped potential to grow food.  Lots and lots of food that could sustainably support the livelihoods of millions of people.  Suggesting that it is impossible to grow food in these countries is not just offensive, it’s factually wrong. Transforming how aid is delivered so that more can be invested in building self-sufficiency and resilience is exactly what we should be doing with our scarce foreign aid dollars.

Oxfam has long argued that US cotton subsidies damage lives and livelihoods of smallholder farmers in developing countries at a high cost to American taxpayers(see also this study). Unfortunately, subsidies for US cotton producers included in the Senate Farm Bill proposal continues this trend rather than reverses it.

In 2002, Brazil, joined by Chad, Burkina Faso, Benin, Mali, and Senegal  (C4+1), brought actions against US cotton subsidies in the WTO. These nations claimed that as a result of cotton programs in the United States, especially programs that paid American cotton farmers to increase production as market prices went down, the market was rigged against producers in other nations that counted on an unbiased market. In 2009, Brazil won a case in the WTO equivalent of trial against US cotton subsidies. As a result, the US government—taxpayers—now make annual payments to subsidize the Brazilian cotton industry at a level of almost $150M per year. The payments are intended to be made until US cotton subsidies are removed.

Fanta Diarra next to her cotton crop in Mali. Macina Film/Oxfam.

In 2011 and 2012, National Cotton Council worked with Congress to draft a cotton subsidy program for the industry that they claim will resolve the distortion that led to losing the WTO case in the first place. Their proposal is called the Stacked Income Protection Plan (STAX). In general, STAX provides insurance against even modest losses of revenue resulting from poor harvests or low prices. With highly subsidized producer premiums, it is taxpayers who are on the hook.

Will this readjustment of the cotton program satisfy the complaints of Brazil and the West African cotton producers? Not according to Brazil: In a recent letter to Congress, Robert Azevedo, Brazil’s Representative to the WTO, wrote, “From the data we analyzed… the STAX proposal would likely result in the highest level of trade distortion of all the proposals examined by us. … In our view, no farm program can be WTO-compliant and cover ‘shallow losses’—thereby insulating farmers from market forces—to the extent foreseen in the aforementioned NCC proposal.”

Making matters worse, in a sleight of hand that may seem innocuous, the STAX program will fall under a section of the Farm Bill that will shield cotton from payment limitations, conservation compliance rules, and the individual producer transparency that is required for farmers growing corn, soybeans, or any of the other “program” crops supported through Farm Bill spending. Shielded from these requirements and safeguards, cotton producers basically get a free pass from the oversight and responsibility that comes with other subsidies.

At the House Agriculture field hearing held in Dodge City on April 20, Little River, KS farmer Kendall Hodgson said that he “would ask the Committee to be mindful of WTO compliance. We like to think of ourselves as a nation that follows the law. We stand to lose more by noncompliance than to gain. I understand the realities of the Brazilian threat of a WTO suit concerning our cotton program and our subsequent payments to Brazil to keep that suit from happening but this is something of a black eye for our farm programs that only invite criticism from our detractors.” Hodgson, a diversified farmer, reminded legislators that when cotton violates trade agreements, it jeopardizes markets for all producers.

The proposal put forth by the National Cotton Council—and adopted by the Senate Agriculture Committee—has no intention of correcting the wrongs created by earlier cotton programs. In fact, on top of shunning any kind of accountability to resource protection and to taxpayers, the current proposal makes no modification to the worst component of trade distortion: the marketing loan program. And farmers like Kendall Hodgson in Kansas, and cotton farmers in West Africa will continue to be at risk because the cotton industry refuses to play fair.