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US Subsidies May Force Brazil to Import Cotton

As Brasilia expected, the United States will appeal a World Trade Organization decision which ruled that its cotton subsidies were illegal.

Brasilia submitted a complaint on June 18 which stated that US cotton subsidies were detrimental to Brazilian cotton production and competitivity.

The complaint pointed out that because of the subsidies the US, the world’s second biggest producer, is the world leader in cotton exports.

US Department of Agriculture data shows that over the last four years some 25,000 US cotton growers have been receiving $0.89 per each dollar worth of cotton they produce.

In other words, American cotton farmers were getting a dollar of income at a price of only $0.11.

The result is overproduction by the US, which depresses world prices, making it difficult for others to compete.

According to the National Agriculture Confederation, the problem has become so serious in Brazil, with cotton production declining sharply, that there is a chance that soon it will have to be imported.

Agência Brasil
Translator: Allen Bennett


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