By far the world’s biggest sugar producer, Brazil has often been held up on the worldwide stage as a shining example of how governments should construct farm policies.

Ignoring Brazil’s low labor and environmental standards, opponents of U.S. farm policy have pointed to Brazil’s supposed lack of government subsidies as a model for all.

Now it doesn’t even look like Brazil apologists have that argument to lean on.

According to a new USDA report, Brazil is now lavishing subsidies on its huge agricultural industry.  That report found:

Brazil’s Congressional House Commission on Agriculture just proposed a bill at a cost of US$14 billion annually to provide direct subsidies to producers. The Government of Brazil also announced last month it will make available US$64 billion in agricultural credits to boost production during the upcoming crop year (October 2010 – Sept 2011), an increase of 7.5 percent over last year’s credit program. Brazil is initiating a Low Carbon Agriculture Program (ABC) to address sustainability and a new credit line exclusively for middle-class farmers (Pronamp). The Brazilian Congress also is reviewing Measures that would allow rescheduling of more than US$50 billion in farm debts. Brazil’s increasing agriculture support has tended to escape World Trade Organization disciplines in large part due to its self-designation as a developing country.

Of course, these kinds of subsidies are nothing new for Brazil.  They’ve quietly subsidized for years through a mix of government-backed credit programs, debt forgiveness, and price supports as detailed in this paper by European agricultural specialist, Simon Harris.

U.S. sugar, corn, soybean, cotton, and ethanol producers, who usually bear the brunt of Brazil’s wrath, have seen little global attention paid to Brazil’s agricultural subsidy programs.  In part, that’s because the agricultural superpower has declared itself a “developing country” in the World Trade Organization  (WTO).

This self-declaration has, so far, shielded Brazil from having to make any reforms to its subsidies. It should be noted that, even with special WTO privileges, some are beginning to question whether Brazil's burgeoning agricultural subsidy programs are in compliance with their WTO obligations.

In the meantime, Brazil has focused its energies on attacking U.S. and European farmers in the WTO.  The result has been a costly WTO case against U.S. cotton and export credit programs and the derailment of ongoing multilateral trade negotiations.

Hardly seems fair. Then again, there’s little fair about trade with Brazil.