This amount, while significant, is less than one percent of the value of the Brazilian crop, and therefore considered to be a de minimis domestic support expenditure according to Brazil's WTO commitments. This program was very popular with the industry, which has requested that it be used again in 2007. To date, the government has not ma de a decision regarding the use of PEPRO in 2007.
The minimum guaranteed price for cotton was last changed before the 2003/04 crop, when the price was raised from R$33.90/15 kg to R$44.60/15 kg. Except for a brief spike in prices in early 2006, the average monthly price of cotton has been below the minimum price since October 2004.
Reports indicate that farmers have already committed up to 60 percent of the future cotton crop in exchange for inputs (fertilizer and pesticide) to plant cotton, soybeans and other crops this year.
In addition, cotton is reported to be the one crop in Mato Grosso that will return a profit, leading farmers to plant cotton to cover losses in other crops. As most of the 2006/07 production will be harvested towards the end of the trade year, exports from this crop will be made in the 2007/08 trade year.
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United States Department of Agriculture
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