The case for ending cotton subsidies
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CTA. 2003. The case for ending cotton subsidies. Agritrade, July 2003. CTA, Wageningen, The Netherlands.
Permanent link to cite or share this item: http://hdl.handle.net/10568/52460
External link to download this item: http://agritrade.cta.int/Back-issues/Agriculture-monthly-news-update/2003/July-2003
Addressing the Trade Negotiations Committee the President of Burkina...
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.
SubjectsMARKETING AND TRADE;
- CTA Agritrade