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Letter of Support for Ending Payments to the Brazilian Cotton Institute, H.R.1644

April 26, 2013

Dear Representatives Kind and Blumenauer:

On behalf of more than two million Americans for Prosperity activists in all 50 states, I applaud you for reintroducing your bill to end payments to the Brazilian Cotton Institute (H.R.1644). Not only are we paying domestic farmers not to farm, we’re paying foreign farmers to look the other way. This practice is woefully out of touch with the current state of the economy, and it should not be a cornerstone of U.S. agricultural policy.

Federal subsidies for the domestic cotton industry are so high that they violate international trade rules, prompting Brazil to threaten to impose retaliatory tariffs. In 2004, the U.S. and Brazil found a compromise: Brazil would not levy tariffs on U.S. products coming into Brazil, and the U.S. federal government would send $147.3 million every year to the Brazilian cotton industry. Your bill will stop the federal government from sending these absurd payments.

Your legislation also includes a provision to end direct payments. Under this antiquated Farm Bill program, the federal government annually sends about $5 billion in checks to farm landowners and operators, regardless of their economic need or whether they even grow crops.

In addition, your bill will limit federal subsidies for crop insurance premiums. These subsidies cost taxpayers around $9 billion each year, and they disproportionately benefit insurance companies and wealthy, well-connected agri-businesses. Even though this provision should be stricter (it only limits the subsidy to 70 percent of the premium), it’s an important first step to adding taxpayer protections to crop insurance.

U.S. agricultural policies should be based on free market principles, not handouts. Current farm programs are up for reauthorization this summer, providing a prime opportunity for Congress to overhaul these antiquated programs. AFP is proud to support H.R.1644. I urge your colleagues to support its passage, and I look forward to working with you in the future.

Sincerely,

James Valvo
Director of Policy
Americans for Prosperity

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