The Politics of Poverty

Ideas and analysis from Oxfam America's policy experts

As the moon follows the sun, US cotton producers are whining for more subsidies

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Representatives of Oxfam America and its local partner organizations sit beside sacks of organically-grown cotton during a meeting with cotton producers (not seen), in Sibirila, Mali Thursday, March 12, 2009. (Rebecca Blackwell/Oxfam America) Representatives of Oxfam America and its local partner organizations sit beside sacks of organically-grown cotton during a meeting with cotton producers (not seen), in Sibirila, Mali Thursday, March 12, 2009. (Rebecca Blackwell/Oxfam America)

Just in time for another big WTO meeting.

For years, the injustice of the world cotton market has been the symbol of the inequities of the international trading system. Tens of millions of extremely poor farmers in Africa and India depend on cotton for their livelihood, while the US provides billions in taxpayer subsidies to its comparatively small number of cotton producers who make the US the world’s largest cotton exporter. Despite “reforms” in the most recent Farm Bill, US subsidies are expected to continue to depress cotton prices globally. This manufactured unfair competition between highly subsidized US farmers and small, poor African & Indian cotton farmers who are barely eking out a living has been called the “litmus test” of world trade negotiations. And for more than a decade, failure has prevailed.

Today, trade ministers from around the world will gather in Nairobi to consider reforms to international trade policy. And like clockwork, US cotton producers are seeking additional subsidies from the US government. They could hardly be more tone deaf. And many in Congress are apparently ready to go along with them.

Unfortunately, cotton farmers around the world lost their most important champion recently when Brazil went quiet on the issues of US cotton subsidies. After winning an important, precedent-setting dispute in the WTO litigation system, following years of haggling and pressure, Brazil meekly accepted a one-time payment of $300 million from the US to make the problem quietly go away.

Poor cotton-growing countries soldier on, while the agriculture super powers make arrangements among themselves.

Tim Wise and Sachin Kumar Sharma have nominated India to take up the mantle of cotton trade reform and note that Indian cotton producers lose $800 million a year due to US cotton subsidies. It will be interesting to see if India does indeed adopt the cause – especially since they seem pre-occupied with other fights.

Meanwhile, the cotton sector in Africa and India continues its long decline. Adam Sneyd produced a thoughtful discussion of the challenges. It’s true that African cotton producers are facing low prices and dysfunctional marketing systems, input suppliers, and unfair contracts. But it’s also true that these problems are that much harder when the world’s richest country is tilting the field against them.

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