There's a lot going on in Brazil right now. A drought in the south of the country may have wiped out as much as 20% of the corn crop and 15% of the soybean crop. Also, experts are trying to figure out if China's new regulations on accepting biotech soybeans will favor or hurt Brazilian exports to that country.

Here's a roundup of some of the top issues:

WTO

When Larry Combest, chairman of the House Agriculture Committee, came through Brazil in January, Brazilian ag groups let him know what they thought of the proposed farm bill.

In a document presented to Combest by groups representing farmers and crushers, it pointedly stated that the U.S. loan deficiency payments (LDPs) amount to direct subsidies to farmers. The groups claim they have evidence that the LDPs break World Trade Organization (WTO) rules, and they're prepared to make their case to the WTO body — perhaps by July.

Brazilians say U.S. subsidies to U.S. soybean farmers have depressed world soy prices, which have hurt Brazilian soybean prices. Even though Brazil's soy production and sales have increased over the past 10 years, the Brazilian government says they would have increased more without the U.S. program in place. In fact, Brazilian officials say U.S. soybean subsidies cost their country $1.2 billion (U.S.) annually.

GMOs

Since 1998, a court injunction has prevented the commercial planting of genetically modified (GM) seeds, which had been approved by the government agency in charge of biotech.

The pesky court order has not stopped many producers with weed problems in southern Brazil from bringing over Roundup Ready (RR) seed from neighboring Argentina — where it's legal. In fact, the Brazilian seed producers association estimates that 60% of the planted area of the Brazilian state of Rio Grande do Sul is planted with RR soybeans.

However, Brazil is edging closer to planting RR soybeans legally. The 1998 court order promised not to allow the release of the product until an environmental impact study had been done — along with a labeling law for foods containing GMOs and a clear published procedure for future biotech approvals.

On Feb. 25 — in a seven-hour session — a federal judge ruled to lift the 1998 injunction. At press time, if at least one of her colleagues agrees with her in a scheduled March 15 decision, it looks like everything is in place for planting next season in November.

Activist groups and farmers have been heavily lobbying the Brazilian Congress' special committee on transgenics. In fact, a Feb. 27 committee vote was impeded by pro- and anti-biotech protesters.

Meanwhile, Brazilian President Fernando Henrique Cardoso has gotten firmly behind biotech, instructing his cabinet ministers that there is to be no discord on the issue in public statements.

The government's official position is that Brazil needs biotech in order to compete in international markets. One deputy minister recently hinted that, in order to speed an agreement on planting biotech seeds in Brazil, the federal government could allow some states to prohibit GMOs in their territories.

Argentina

In the two years since Brazil devalued its currency, the real, its soy exports shot up 74%. Now Brazilians are afraid Argentina's devaluation will give the same benefit to competing Argentine soybean farmers — at the expense of Brazil.

The vice president of the Brazilian crushers association, Cesar Borges, was recently quoted as saying, “Our exports will drop with increased Argentine competitiveness.”