Monday, November 15, 2010

Report calls for end of US and European cotton subsidies

The FairTrade Federation issued a new report that calls for the removal of subsides that the US and European governments pay to their cotton farmers. FairTrade says that cotton farmers in West Africa could earn ten percent more if subsidies in the US were removed. The report says that 1 billion dollars in subsidies are payed out every year.

From the BBC, writer Mark Doyle details the report for us. The entire study can be viewed at this link.
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 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%.

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.

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".

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