(May 10) U.S. agricultural subsidies could be threatened by a preliminary ruling from the World Trade Organization in late April that government payments to America’s cotton farmers break global trade rules.

Brazilian growers brought the case against U.S. subsidies. One of their reported arguments that found WTO backing in the yet-to-be-released ruling is the existence of U.S. planting restrictions. Farm policy prohibits growers receiving subsidy payments for their program crops from planting fruit and vegetables on those acres, noted Ron Gaskill, director of regulatory relations for the American Farm Bureau Federation’s Washington office.

“There is some speculation that the planting flexibility provision is one of the proofs put forward by the Brazilians to say that trade and production (of cotton) have been distorted,” he said.

The U.S. pays cotton growers $3 billion annually to grow and market cotton, and subsidies for all program crops reached about $19 billion in fiscal 2003. Europe and Japan spend substantially more money on agricultural subsidies, and those subsidies, too, would be at risk from the WTO ruling.

Scott McClellan, White House press secretary, said April 27 that the administration believes U.S. farm programs are consistent with WTO obligations.

“We will be defending U.S. agricultural interests in every forum we need to and have no intention of unilaterally taking steps to disarm when it comes to this,” he said.

Gaskill said the ruling, though it probably will be appealed, does present risks to U.S. program crops in the long term.

“The U.S. could be severely compromised,” he said.

Because the ruling is preliminary and hasn’t even been published yet, Gaskill said it difficult to speculate how the U.S. will respond to specific arguments. U.S. trade officials say they are working on an agreement that will address agricultural subsidies in the World Trade Organization negotiations by June, according to a April 28 report from The Washington Times. That could diffuse the WTO ruling on cotton subsidies and provide a gradual weaning from government payments.