A recent ruling by the World Trade Organization could have a drastic effect on West Texas farmers. Last month, the WTO panel ruled against the United States because Brazil claims the current U.S. farm program gives U.S. farmers an unfair advantage.
The program guarantees farmers payment if prices drop below a target price. Brazil says the U.S. produces a surplus of cotton in the world market causing prices in other countries to drop. The full report by the WTO has not yet been released so it's too soon to tell what the effects could be on local farmers.
"I think that Brazil is barking up the wrong tree if they wanted to have serious trade negotiations with the U.S. The way you work out your differences is not in the courtroom but you work it out in a negotiation room," says U.S. Congressman Randy Neugebauer.
"I can tell you from the U.S. cotton industry's perspective it's going to cause us to take a closer look to any agreements that our negotiators sign off on behalf of the U.S. government and I think it will cause congress to take a closer look at the fine print in all those negotiators agreements," explains Woody Anderson, Chairman of the National Cotton Council.
The U.S. is arguing that when the current farm bill was put together, it complied with all the requirements. The U.S. plans to appeal any final ruling in favor of Brazil.