February 18, 2005
 

Brazil seeks answer to US soybean subsidies
 

The bearish global market for soybeans could have been traced to subsidies for US farmers. Such payments might have helped produced a 37-percent fall in prices in 2004, so said Brazil, the second largest soybean exporter after the US.  

According to news reports on Feb 15, 2005, Brazil plans to ask the World Trade Organisation (WTO) to look into the US soybean subsidies of more than US$2 billion annually, in an effort to lower trade barriers in agriculture. Brazil had earlier pursued and won the first two WTO cases challenging subsidies for US cotton farmers and European sugar producers

In response to the "unfair" demands from their South American counterparts, US farmers cited Brazil's own government policies of low-interest loans, tax breaks, and incentives for producers. Ron Heck, chairman of the American Soybean Association, probably summed up US sentiments by describing the issue as a "case without merit".

Brazil, China, India and other developing countries are actively seeking reductions in the $300 billion aid given to farmers by governments in industrial countries every year. Brazilian President Luiz Inacio Lula da Silva formed a bloc of developing countries in 2003, known as the G-20, which demanded reductions in farm subsidies during WTO talks.