WTO Should Watch Market

A cotton industry economist says U.S. producers watch the market when trying to decide what to plant, contrary to those who argue the cotton program negates market impact.

Published on: Feb 7, 2008

Cotton acreage in 2007 provides proof positive that U.S. producers respond to market signals, says Gary Adams, chief economist for the National Cotton Council.

U.S. producers dropped cotton acreage by nearly one-third to 10.8 million acres.

"The planting flexibility of the farm program, coupled with the prevailing market signals, contributed to the 29% decline," Adams told attendees at the 2008 Beltwide Cotton Conference.

Other countries, however, did not respond to those same market signals.

It's a point worthy of debate in the wake of World Trade Organization debate over whether the U.S. cotton program skews the world market.

"First, the adjustment in U.S. acreage undermines criticisms that we hear about the U.S. cotton program – specifically in the international arena. It is clear that U.S. producers do respond to market signals and adjust acreage accordingly," Adams said. "Second, it begs the question as to why there have been no responses from other countries."