Once again, the United States is facing pressure from international sources to reduce its cotton subsidies. At the same time, domestic financial concerns may make a change to subsidies necessary.

According to a report in the Economic Times of India, India, China and Argentina recently warned the United States that the ongoing negotiations for a global trade deal “could be in trouble” if the U.S. does not commit to reducing its cotton subsidies. Some believe that these subsidies allow U.S. farmers to undercut the price of cotton, providing an unfair market advantage, especially over cotton farmers from poorer nations.

The Economic Times report notes that the “Cotton-4 group of African countries including Benin, Burkina Faso, Chad and Mali are leading the opposition to the US cotton subsidies.”

The report also cites a World Trade Organization official as saying “We now want the U.S. to spell out explicitly how it plans to reduce cotton subsidies under the WTO. The U.S. had agreed at Hong Kong (in 2005) that it would reduce cotton subsidies at a higher and faster rate than other farm subsidies, and it has to respect its commitment.”

In Washington D.C., U.S. lawmakers are saying that reduced subsidies for cotton may be included in the next farm bill as a cost-saving measure. The country is facing record deficits. According to Bloomberg.com, House Agriculture Committee Chairman Collin Peterson noted at a hearing on the farm bill, “We’re not going to have any new money; we’ll probably have less money.” Peterson has stated that he wants the next farm bill approved before September 2012, a year before provisions in the current measure expire.