NCGA Leader Calls Out Brazil on Trading Practices

Matt Frostic, a Michigan farmer and leader representing the National Corn Growers Association, told the Office of the U.S. Trade Representative this week that the organization supports the proposed 25% tariffs that would include Brazilian ethanol imports and urged the investigation to consider the full scope of the South American country's action that have penalized U.S. corn growers.

The remarks were made during a hearing on the issue on Monday and come after Brazil imposed an 18% tariff on U.S. ethanol in addition to other actions domestically and internationally aimed at placing U.S. ethanol at a disadvantage compared to Brazilian ethanol.

"U.S. corn growers felt the effects of the tariff as market access sharply declined," Frostic told the agency. "In 2018, Brazil was the top market for U.S. ethanol exports by far. Once the tariff was reimposed, the market nearly evaporated, showing that Brazil's tariff was indeed responsible for the sudden decline of U.S. ethanol exports to Brazil."

While Brazil was imposing tariffs that resulted in a decline of American exports, its sugarcane ethanol was being imported into the United States at an increasing rate, Frostic added.

As USTR considers additional proposed action to impose import restrictions, Frostic called on the agency to look at Brazil's refusal to allow U.S. ethanol producers to obtain approval for their domestic biofuels program. He said the actions show clear discrimination against U.S. ethanol producers.

"The United States does not impose such restrictions on participation in our Renewable Fuel Standard, and Brazilian companies are allowed to participate. This should be given strong consideration as USTR continues this investigation."

Frostic also said Brazil's international advocacy touting a low environmental footprint is nothing short of a guise to artificially boost its carbon intensity score over American farmers.

"Brazil claims that its corn is a secondary crop, such that inputs and land used are more minor compared to the United States," he said. "But this could not be more incorrect, as land conversion from grassland or rainforest in Brazil is not properly documented."

Frostic said more needs to be done to regain market access to Brazil and ensure an international level playing field for U.S. corn growers.

Read Submitted Testimony