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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

    BBC News - Campaigners urge US and Europe to cut cotton subsidies

    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

    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, a new series of multilateral trade negotiations began, known as the Doha Round.

    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.

  • #2
    lol,
    "Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!" B. Franklin

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    • #3
      It's ironic alright - we're lecturing 3rd world countries about how they have to repay their debts, then closing the only route they have to increasing national income, and through that increasing the amount of money they have to amongst other things...pay off their debts. All the while pretending to stand for free trade. Pretty nuts.
      Although it is not true that all conservatives are stupid people, it is true that most stupid people are conservative.
      - John Stuart Mill.

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      • #4
        There's cotton being produced in Europe?

        Looking it up, there's only two countries in the EU with any remotely significant production. Greece, with some 80,000 cotton farms producing 1% of the world production (9% of local agricultural production), and Spain with some 6,000 cotton farms producing 0.2% of the world production (1% of local agricultural production). Somewhat oddly, Greece gets about €200 million in subsidies, while Spain gets about €70 million.

        The "Cotton 4" countries mentioned produce twice as much cotton as the entire EU.

        They should campaign China and India. Those two together hold 50 times the production of the EU.

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        • #5
          Yeah, but it's easier to blame those evil white people.
          "Only Nixon can go to China." -- Old Vulcan proverb.

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          • #6
            Campaigners urge US and Europe to cut cotton subsidies
            Greece, with some 80,000 cotton farms producing 1% of the world production.........and Spain with some 6,000 cotton farms producing 0.2% of the world production
            interesting that it should it is get a major mention
            Yeah, but it's easier to blame those evil white people
            ya, there may be a certain amount of it that in it, the site is english and wants to appeal to a european and western audience, more appeal

            However, I wouldnt be so quick to dismiss the significance of such small production amounts in the EU
            The "Cotton 4" countries mentioned produce twice as much cotton as the entire EU
            , EU still constiuents 50% of their potential export, an amount that can play a significant factor in the market for where the Cotton 4 export and how much they get (given the subsidies on that 50%)

            Somewhat oddly, Greece gets about €200 million in subsidies, while Spain gets about €70 million
            .
            It seems a large amount given their production capacity and indicates the debate about the issue of subsidies, but I guess it also illustrates that even a small amount represents a huge monetary value and significant potential for the poor Cotton 4 economies



            They should campaign China and India
            indeed it would appear, although I dont know the mechanics of the production in rthose countries

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            • #7
              Any subsidies for a product such as cotton are surely counter-productive... I was amazed that any EU country produced the stuff... while the most paranoid amongst us might see it as a strategic product, to me it should be one of those purely left to the market..

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              • #8
                Btw, the price of cotton has been rising like crazy on the world market lately. Over 100% price increase in the past 12 months. And that despite apparently China selling off massive amounts from their stocks to stabilize the price somewhat.

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                Last edited by kato; 27 Nov 10,, 05:15.

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