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Bush Says WTO Ruling Against U.S. Cotton Subsidies Requires a 10% Cut ($263 Million)

From: Ag News You Can Use July 19, 2005
Amigo Cantisano <orgamigo@jps.net
BUSH ADMINISTRATION STARTS COMPLIANCE WITH WTO COTTON RULING


The Bush administration plans to ask Congress to end the Step 2 cotton subsidy program that pay exporters and millers an incentive to buy US cotton, to comply with the WTO ruling in a case brought before it by Brazil. USDA also plans to terminate long term cotton export credits that allowed buyers up to 10 years to repay loans and put caps of fees it can charge on export credits. Brazil charged, and the WTO agreed, that US subsidies distort the world cotton price.

But passage of that kind of legislation is not a certainty. Cotton industry groups vow to fight the elimination of Step 2 payments and they constitute a strong lobby. Back in the fall, before the WTO's ruling against the US, the Nat'l Cotton Council said the program was vital to US cotton competitiveness. In 2004, Dunavant Enterprises, Inc., based in Fresno and Memphis, received $23,885,836 in Step 2 payments and Kern-based Calcot received $9,896,372, according to the Environmental Working Group. All Step 2 payments totaled $263,922,737 the watchdog group says.