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Campaigners urge US and Europe to cut cotton subsidies

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Campaigners urge US and Europe to cut cotton subsidies

Post by nirvana on Sun Nov 14, 2010 8:07 pm

By Mark Doyle
BBC International Development Correspondent

Fairtrade says that cutting subsidies would help West African farmers
Continue reading the main story
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Misery in Mali's cotton-picking fields
Timeline: World Trade Organization
Campaigners working with West African farmers are calling on Europe and the United States to cut the subsidies they pay to their cotton farmers.

They say the money that rich countries use to back their farmers - more than $1bn a year - is artificially boosting world supply, and reducing the prices that poorer West African producers can earn.

Trade negotiators for the so-called "Cotton 4" West African states - Chad, Mali, Benin and Burkina Faso - believe that removing US cotton subsidies alone could boost West African cotton farmers' income by up to 10%.

A report published today by the Fairtrade group - which pays premium prices for organically-produced agricultural goods to stabilise incomes in poor countries - says an increase of this magnitude can make a huge difference.

Working with co-operatives in Mali, Fairtrade says the extra money generated by the premium prices it pays has boosted school enrolment for farmers' children and allowed them to build a basic health clinic.

In parts of southern Mali, the report says, the extra money generated by organic cotton farming has boosted school enrolment to 95%, compared with a national average of 43%.

Cutting the cotton subsidies, Fairtrade argues, could deliver similar advantages to non-organic farmers.

The rich countries' case

Schemes to support organic cotton producers have been a success
Cotton producers in the United States, represented by the National Cotton Council, counter that subsidies have helped them to establish a stable income for more than 340,000 people employed in some of the poorer southern states of the country.

They add that many more jobs have been created in ancillary industries, such as those producing crop-protection chemicals and machinery.

European Commission officials make similar points - saying the subsidies help farmers in Greece and Spain, some of who are relatively poor by European standards.

But none of those areas is as poor as the West African "Cotton Four" producers.

The report quotes the trade body, the International Cotton Advisory Committee, as saying subsidies to farmers in the richer parts of the world depress prices to the extent of cutting annual revenue to African producers by $147m.

'Level playing field'
Agricultural subsidies began in the United States in response to the Great Depression of the 1930s. During the Second World War the subsidies were portrayed as part of the national defence strategy.

Europe's system of subsidies, the Common Agricultural Policy, was established to provide farmers with regular income and preserve rural heritage.

But on both continents the subsidies have recently come in for criticism as they have gradually been perceived as benefiting special interest groups rather than serving the whole community.

In 2001, in the wake of the 9/11 attacks on the United States, a new series of multilateral trade negotiations began, known as the Doha Round.

The thinking was that a fairer system might reduce the possibility of attacks like those on New York and Washington.

One of the aims of the Doha round was to set new global trading rules which would stimulate growth and wealth in underdeveloped countries. One way of doing this would be to reduce tariffs and subsidies, so creating a "level playing field".

The cotton subsidies were quickly seen as a litmus test.

It seemed obviously iniquitous to many of the negotiators that poor people who could actually produce cotton very cheaply should in effect be punished by richer people who produced it at higher cost.

It is a problem which, so far, the Doha Round has failed to solve.





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