U.S. to File Aggressive Appeal in Brazil WTO Case; NCC Weary of Economic Misinformation

MEMPHIS, TN - Continuing to "set the record straight," National Cotton Council Chairman Woody Anderson says the United States will file an aggressive appeal in the Brazil WTO case and that he is "tired of seeing poor economics casting blame on the U.S. cotton program and ignoring reality."

In recent addresses to the Texas Independent Ginners Association, the Texas Agricultural Co-op Council and the New Mexico Cotton Ginners Association, Anderson shared information that included a strong impetus for an appeal.

He cited recent reports by the USDA and the International Cotton Advisory Committee (ICAC) showing that U.S. production of cotton is declining while production outside the United States is skyrocketing. He said these facts undermine claims that the United States is causing Brazil serious prejudice.

"Current expectations indicate Brazil’s cotton crop is now 85 percent larger than their 2001 crop,” Anderson said. “It seems incredible that Brazil could argue it is being harmed in world markets, given that kind of production increase.”

The Texas producer also disputed claims that the U.S. program has significantly affected world cotton prices. He cited a recent Texas Tech University analysis that determined the U.S. cotton program does not impact world cotton prices by any more than two percent.

"This is not a significant impact," Anderson stated. "I am not apologizing for the U.S. cotton program. It is well-designed, well-crafted and an important component of the agricultural policy of the United States. Our program was designed to comply with our WTO obligations. Our program does not have significant impacts on world markets. The Texas Tech study and several others confirm this."

Anderson said that the world share of cotton production attributable to the United States for the last 33 years is virtually unchanged and has been relatively stable at roughly 20 percent over this 30-year history.

In fact, he noted, “U.S. world market share was down, not up, in 2002 - as Brazil and many U.S. newspapers would have you believe."

Anderson said he is disappointed that the recent statement issued by the G-90 group of less developed countries continues to target the U.S. cotton program.

"There are good reasons prices for cotton are currently declining - and those reasons are outside the United States,” he said.

He said that Brazil’s and China's combined production increase since 2001 is about double that of the annual production of West Africa, leaving little room for any real strengthening in world market prices. Also, since 2001, U.S. production has fallen by more than two million bales.

"China and Brazil combined are increasing production by 8.6 million bales over 2001; the United States is decreasing production by 2.7 million bales; yet, somehow, it is the U.S. cotton program that is being blamed for damaging world markets," he said. "Some groups are so busy targeting U.S. cotton, they are ignoring increased cotton production from China and Brazil and the impact that production has on world prices.

“My patience is wearing thin with those who are using West African farmers in their campaign to destroy the U.S. cotton program. I am tired of three and four year old numbers being misused, misquoted and misunderstood. This kind of misinformation borders on a cruel hoax designed to falsely raise the hopes of farmers in these less-fortunate countries."

Anderson told all three industry groups that “these are very critical times for our industry. I assure you that the National Cotton Council will continue its efforts on your behalf. We will work with the U.S. government and press this appeal. The correct outcome seems clear to us.”