In addition to these changes, the farm bill passed by the House of Representatives contains a significant reduction in counter-cyclical program payments applied to cotton base acres.
We would also be surprised by any finding in favor of Brazil when Brazil is currently harvesting a cotton crop that is 38% above last year's production and actually sold government cotton stocks during 2007 in an attempt to depress cotton prices.
Earlier this year, while Brazil was asserting before the WTO panel that U.S. support payments were causing serious prejudice to its cotton growers, the Brazilian government was selling its government-owned stocks of cotton in order to lower domestic Brazilian cotton prices. Far from being concerned about prices being too low, the Brazilian government was concerned about prices being too high.
We believe there are other facts that also make any finding against the U.S. unsupportable:
• Expenditures in respect of cotton or cotton base acres, without any further changes in any future farm bill, are expected to decline significantly for 2007, 2008 and 2009.
• During much of the 2006 marketing year, cotton produced in India was as much as 5 cents per pound cheaper than comparable U.S. growths.
• Several international organizations have concluded that the variable levy system implemented by China on imported cotton amounts to a multi-billion dollar support system for the production of cotton in China.
• Brazil has often intervened in its domestic market in order to increase the price of cotton for its producers.
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