November 2010, Week 3


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Mon, 15 Nov 2010 10:53:23 -0500
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Cotton Subsidies Costing West African Farmers £155M 
A Year, Report Reveals

Cotton farmers in west Africa are losing out on vital
income because of subsidies paid to rival growers in
the EU, US, China and India, Fairtrade Foundation says
Juliette Jowit
The Guardian
15 November 2010 

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

As the Doha trade talks enter their tenth year this
week, the Fairtrade Foundation calculates that the US,
the European Union, China and India have in that time
paid their cotton farmers $47bn (£29bn) in subsidies in
total - flooding the international market and pushing
down the global price for competitors, especially in
west Africa, says the charity.

As a result, farmers in the four biggest cotton
producing countries of west Africa are losing out on
vital income which would help people in rural areas and
pay for roads, schools and other developments to reduce
their dependence on aid, it claims.

Introducing the report, The Great Cotton Stitch-up, the
business secretary, Vince Cable, quotes an estimate by
the charity Oxfam that the subsidies are costing west
African cotton farmers and their families millions of
dollars a year in potential income. A report by Oxfam in
2002 estimated the lost income at $191m (£118m) each

"The current system of subsidies cannot be right and
certainly is not fair," writes Cable. "The principles of
Fairtrade need to be integrated and reflected in the
global trading system. The UK government is committed to
working towards this aim."

When challenged on the steps they were taking, Cable's
Department for Business, Innovation and Skills (BIS)
said the government was "determined to push for the
reduction of these subsidies in Europe and beyond", and
was pushing for an end to the Doha talks to remove limit
protectionism and remove trade barriers. The government
also helped fund Fairtrade labelling, among other
policies, said a spokesman.

The report focuses on the so-called Cotton 4 - Benin,
Burkina Faso, Chad and Mali - who became a cause célèbre
among those pushing for the World Trade Organisation's
Doha talks to ban cotton subsidies to help poorer
nations, where production costs are said to be the
cheapest in the world. The four countries already rank
between 134 and 163 out of 169 countries on the United
Nations Human Development Index, which measures income,
life expectancy and education - and cotton makes up
5-10% of their economies and much of their exports,
mostly to China and India's manufacturing industries.

Another advantage claimed for west African cotton is
that it is mostly rain-fed, avoiding the problems in
other parts of the world where farmers are draining
rives and aquifers to water crops.

Removing subsidies should also not add to inflation for
clothes and cotton goods, said Harriet Lamb, the
Fairtrade Foundation's executive director. "The actual
cost of cotton as a proportion of the garment consumers
buy isn't huge, so a significant rise in the price of
cotton would be a few pence extra on the end product."

The subsidies paid over the past nine years were
US$24.5bn in the US, $7bn in the EU, and the remainder
in India and China.

In 2005 governments agreed to end the cotton subsidies,
but the deal will not come into force until the
prolonged talks reach a full agreement. The next
ministerial meeting has not been scheduled, but one is
expected next year to mark 10 years since the talks
began in the Qatar city of Doha.


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