Is there a link between the WTO cotton decision and future corn and soybean programs?
In looking towards the 2007 farm bill, it is important to keep one other thing in mind related to the WTO. In 2003, Brazil took a case to the WTO against the U.S. cotton program, alleging among other things, that marketing loans, LDPs, and counter-cyclical payments had stimulated larger production of cotton in the U.S. than would otherwise have occurred, and that, when this cotton was pushed out into the world market, it had depressed the world price of cotton and in turn hurt Brazil’s cotton producers, who get their entire income from the market. The U.S. lost this case, and the WTO agreed with Brazil on all of these points. While the Midwest doesn’t produce cotton, this case has very real implications for it because the corn and soybean programs have many of the same features as the cotton program that were found to be inconsistent with current agricultural trade rules as defined in the Uruguay Round Agreement of Agriculture. If the Doha Round should fail to come to closure, there is
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