WTO Rules Against U.S. Cotton Subsidies
The idea of discontinuing cotton subsidies does not sit well with California growers.
“In today’s world, the farm program is an integral part of most farming operations and has been since the 1930s,” said Mark Bagby, spokesman for Calcot Ltd., a grower-owned cotton marketing cooperative in Bakersfield, Calif., that represents 1,400 cotton growers in California and Arizona.
On April 26, the World Trade Organization made an interim ruling saying that U.S. cotton subsidies distort world prices. The ruling followed a complaint by Brazil that said U.S. subsidies have kept prices too low and put producers in lessdeveloped countries at a disadvantage.
According to the complaint, the United States paid its 25,000 cotton farmers almost $4 billion between 2001 and 2002 for a crop worth only $3 billion. The U.S. subsidies helping American farmers sell cotton at below-market prices meant Brazilian farmers lost $600 million in sales during the 2001 marketing season, the complaint said.
According to the Environmental Working Group, a Washington D.C.–based research firm, California’s cotton growers harvested $623 million in 2002 and received an additional $239 million in federal subsidies.
The Bush administration is planning to appeal the ruling.
Cotton prices for California-grown Pima and Acala cotton are close to normal levels, which means that local cotton growers are not receiving major farm subsidies now, Bagby said.
In 2003, California produced 2 million bales of cotton on 800,000 acres, making it the fourth-largest cotton-producing state in the country. The United States, which produced about 18 million bales in 2003, is the largest cotton producer in the world after China.
—Deborah Belgum
