The case for ending cotton subsidies
Citation
CTA. 2003. The case for ending cotton subsidies. Agritrade, July 2003. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/52460
Abstract/Description
Addressing the Trade Negotiations Committee the President of Burkina...
Notes
Addressing the Trade Negotiations Committee the President of Burkina
Faso set out why ending cotton sector subsidies in OECD countries
was so important. He pointed out that West and Central African states
had gradually eliminated subsidies to their agricultural sector
and implemented reforms to improve competitiveness but that the
effects of these reforms on poverty eradication had been 'nullified
by the multiform subsidies still provided by some WTO member states
to their agriculture'. For example 'the positive effect of some
twenty billions CFA Francs, granted Burkina Faso under the HIPC
Initiative, is practically annihilated as a consequence of cotton
subsidies'. The President noted that:
rich countries provide subsidies to their own farmers which
amount to six times the amount of their development aid;
a country like Mali received $37 million in aid but lost $43
million due to lower export revenues, as a consequence of OECD
cotton subsidies;
subsidies provided to cotton farmers in rich countries are
60% higher than the overall gross domestic product of Burkina
Faso;
as a consequence of cotton subsidies in 2001, Burkina Faso
lost 1% of its GDP and 12% of its export income, while Mali lost
1.7% and 8% respectively and Benin lost 1.4% and 9% respectively,
this adversely affected the lives of 10 million people in West
and Central Africa.
He contrasted the importance of the cotton sector in the different
regions. In Benin, Burkina Faso, Mali and Chad, cotton accounts
for 5 to 10% of GDP and an average of 30-40% of total export revenues,
and is a determining and critical factor in poverty-reduction policies
as well as for political and social stability. In industrialised
countries cotton accounts for only a small portion of economic activity.
He appealed for the establishment of 'a mechanism at Cancun to
progressively reduce support to cotton production and export, with
a view to fully suppressing all cotton subsidies by a defined deadline'.
Comment:
Developments around basic commodities like cotton will constitute a vital yardstick for determining the relevance of the Doha Round for disciplining agricultural expenditures in OECD countries and hence the relevance of the overall round to the concerns of ACP countries.
Subjects
MARKETING AND TRADE;Collections
- CTA Agritrade (English) [583]