While we all understand the market distortions caused in the United States by government subsidies for irrigation water, Michael Campana raises an interesting question about the international implications. Quoting a talk at the XIV World Water Congress by Paul Stanton Kibel of the Center on Urban Environmental Law (“CVP” is the Central Valley Project in California):
[S]ome countries, Brazil in particular, are upset because they feel that export crops like cotton (in Brazil’s case) are receiving subsidies from the US because of cheap CVP water. They claim that the cheap water represents ‘foregone revenue’ on the part of the Federal government, which is disallowed by the WTO. Kibel said that other exported crops like pistachio nuts and a few others might also come under the purview of the WTO should someone file a claim. So also might other crops like rice (China and India) that are grown in the Sacramento Valley.