Bill Huffman
Director - Government Relations

The Friday Report

April 9, 2010

Congress continues to be in recess for their Easter Holiday. Most members have been back in their districts holding town halls and meetings with constituents and participating in fundraising for their reelection efforts.

Senator Blanche Lincoln Visits Sacramento

Senate Agriculture Committee Chairwoman Blanche Lincoln was in Sacramento last night for a fundraising reception. Farmers’ Rice Cooperative and the California Rice Industry Association were two of the co-sponsors for the evening event. Senator Lincoln faces a massive challenge in Arkansas from Republicans and a challenge from that state’s Lt. Governor on the Democratic side. Recent polling indicates that her numbers are improving. The U.S. rice industry continues to give as much support as possible to Mrs. Lincoln in her reelection bid.

Brazil Cotton Case Resolution

Brazil and the U.S. are in intense negotiations that could lead to a settlement of the lengthy cotton-subsidy-related trade issue that resulted in a WTO Trade Dispute ruling against the U.S. a couple of years ago. Brazil, which was ready to invoke heavy import duties on U.S. goods, suddenly delayed that action until April 22 after U.S. trade officials offered a proposal to settle the lengthy trade dispute.

In the offer, the Obama Administration signaled that the U.S. may revise cotton subsidies, ease requirements for meat imports from Brazil and establish a $147 million annual fund to promote Brazilian cotton producers.

An official with the Brazilian foreign trade chamber, Lytha Spindola, said, “The retaliation by Brazil against the US. would be suspended another 60-days if the U.S. takes additional steps requested by Brazil, including further altering USDA’s export credit guarantee program and providing a framework for the assistance fund worth $147 million a year for Brazil’s cotton industry.”

The U.S. proposal to resolve this trade dispute came after Brazil detailed 102 U.S. goods that would be subject to import tariffs within 30-days unless an agreement was reached.  Brazil also disclosed a list of U.S. patents and intellectual property rights it could restrict.  Sources indicate the total value of both sets of retaliatory measures would be nearly $830 million.

We understand that the U.S. also agreed to cooperate with Brazil to resolve several lingering sanitary and phytosanitary measures that have impeded the export to the U.S. of various Brazilian meat products.

It is expected that necessary legislation to change the U.S. export credit guarantee program and cotton subsidies will be introduced soon in Congress in an effort to resolve this longstanding trade dispute.

Reaction from the cotton industry and key members of Congress was reportedly positive to this week’s developments.

Costa Takes On Congressman George Miller

Congressman Jim Costa, D-Fresno, fired a salvo at Congressman George Miller this week over water for farms in the Central Valley. The Politics Blog of the San Francisco Chronicle reported that “California Democrats have officially opened fire in their civil war on water, with the Red Army in the Valley versus the Blue Army on the Bay”.

Jim Costa, who is considered one of the experts among Congressional leaders on California water policy, said “We have stood up to the bully tactics of extreme environmentalists whose agenda ignores our families and our futures. We’ve made progress. More water will flow to the Central Valley and George Miller doesn’t like it.”

Costa went on to say “Here’s my message to Congressman Miller: We will not back down, not in the Valley and not in Congress. If he wants a fight with the Latino community, Valley farm workers and farmers whose future depends on water allocations, we’ll give him a fight.”

In response to recent articles in the Chronicle about water issues in the Central Valley, Costa said “George Miller is a poster boy for polluters whose toxic waste creates stress factors that kill fish upstream while he pushes for water restrictions that solely blame and punish the Central Valley for dwindling fish populations.”

Miller, as you may recall, has been the lead author on several environmental bills including the Central Valley Project Improvement Act and he led the effort years ago again Central Valley farmers over the 160-acre rule involving Federal water deliveries.

Australian Water Situation

We noticed an article from the Sydney Morning Herald newspaper in Australia a week or so ago that reported nearly sixty drought-affected farmers living on land in the state’s southwest have volunteered to stop growing rice and cereals and have offered to sell their water entitlements.

The news report said, “In a desperate move, which for many will end their lives on the land, the farmers from the Wakool area, west of Deniliquin, will take a drop in property value once they sell their 40,000 water entitlements. They are permanently selling all their water entitlements and they will be disconnecting from the irrigation system in that region.”

The newspaper reported that the Australian government would buy the water back to improve the environmental health of the Murray River.

The drought and water situation in Australia continues to be a major problem for that region of the world.