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Cottoning on to unfair subsidies

The continuing struggle of cotton growers in the poorest region of the world has been highlighted by a report which reveals the many billions of dollars paid to subsidise farmers in the biggest economies since international talks began to make trade more fair.

As the World Trade Organisation’s Doha trade talks enter their 10th year this week, the Fairtrade Foundation calculates that the United States, the European Union, China and India have in that time paid their cotton farmers $47-billion in subsidies, flooding the international market and pushing down the global price for competitors, especially in West Africa.

The four biggest cotton producing countries of West Africa could use such income to pay for roads, schools and other developments to reduce dependence on aid, it claims.

Introducing the report, titled The Great Cotton Stitch-up, the United Kingdom’s business secretary, Vince Cable, quoted an estimate by the charity Oxfam that the subsidies were costing West African cotton farmers millions.

A report by Oxfam in 2002 estimated the lost income at $191-million each year. Cable’s Department for Business, Innovation and Skills said the government was “determined to push for the reduction of these subsidies in Europe and beyond” and was lobbying for finality in the Doha talks.

The report focuses on the so-called “Cotton 4” — Benin, Burkina Faso, Chad and Mali — that became causes célèbre among those pushing for the Doha talks to ban cotton subsidies to help poorer nations.

The four countries rank between 134 and 163 out of 169 countries on the United Nations Human Development Index, which measures income, life expectancy and education. Cotton makes up 5% to 10% of their economies and much of their exports.

In 2005 governments agreed to end the subsidies, but the deal will not come into force until the prolonged talks reach full agreement. — Guardian News & Media 2010

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