Criticism of cotton subsidies mounts ahead of WTO round

As nations gear up for a key World Trade Organisation meeting this month, West African cotton-producers are again slamming US and European cotton subsidies, which development experts say threaten the livelihoods of up to 15 million people dependent on the “white gold” in West and Central Africa. Chances for a mutually satisfactory outcome on cotton are already shaky, with African leaders at the weekend condemning WTO proposals to be considered at the talks set for 13 to 18 December in Hong Kong. “Some years ago, cotton for us was a source of wealth,” Malian President Amadou Toumani Toure said in the foreword of a white paper on the subject that was launched last week in the Senegalese capital Dakar. “But these days it has become our burden, a cause of poverty,” he said in the White Paper on Cotton, which underscores the negative impact of wealthy nations’ agricultural policy on African countries where cotton is integral to the economy. Its launch was a forum for African development experts to highlight their grievances over cotton subsidies. Cotton is the livelihood of 10 to 15 million people in Burkina Faso (the world’s fifth cotton exporter), Benin, Cameroon, Central African Republic, Chad, Cote d’Ivoire, Ghana, Guinea, Mali, Niger, Nigeria, Senegal and Togo. All told 20 million people across Africa live off the crop. “In Burkina, cotton’s role is essential. We call it ‘white gold,’” Francois Traore, president of the Association of African Cotton Producers, said at the launch of the paper, produced by Environmental Development Action in the Third World (ENDA) and other agricultural associations. “Cotton allows us to send our children to school, care for our health and buy agricultural tools, which allow us to have enough to eat and produce enough cereal stocks.” But between 1999 and 2003, US cotton subsidies of $12.47 billion - or three times the equivalent of the budget of the development agency US AID - led to staggering losses for producers in West and Central Africa, according to Eric Hazard, the white paper’s editor. While the United States represents 40 percent of the world’s cotton exports, the country’s farmers receive 68 percent of the word’s total cotton subsidies. Europe accounts for 2.5 percent of exports, with 18 percent of subsidies. “Everyone - including the International Monetary Fund and the UN Conference for Trade & Development - agrees that African countries have seen $250 million in direct losses and $1 billion in indirect losses,” he said. Ahmed Bachir Diop, director general of the Society for the Development of Textiles, said that nearly 150 cotton enterprises in Africa could collapse unless the subsidies are cut. “The entire cotton industry is in deficit,” he said. “That means companies could rapidly disappear. Everyone must put on the pressure so that cotton producers do not disappear one after the other.” After a drastic fall in revenue in 2001 - which experts say were the worst in constant terms since 1793 - cotton producers in several African countries sounded an alarm. In May 2003 Benin, Burkina Faso, Chad and Mali – countries where cotton represents 30 to 40 percent of exports - appealed to the WTO to cut subsidies and compensate losses. But African and Asian cotton producers left the September 2003 WTO round empty-handed, largely - Hazard said - because of a lack of will on the part of Europe and the United States. “There is deep resistance,” linked to the current world trade system and the interests of those affected, Hazard said. In the United States, subsidies favour major producers whose interests are fiercely defended by the National Cotton Council, the country’s most powerful and best organised agricultural lobby group. African nations are looking to the upcoming WTO talks to close the gap in a situation where “the most competitive producers cannot manage to live off their labours, to the benefit of growers far less competitive but highly subsidised,” the paper says. “For the first time in 40 years, the buying price risks falling below production costs,” said researcher Kako Nubukpo in Dakar. “The very future of rural families is at stake.”