The Impact of Us Cotton Subsidies on West African Countries
THE IMPACT OF US COTTON SUBSIDIES ON WEST AFRICAN COUNTRIES
American subsidies are endangering the agriculture of cotton in most of West Africa and other developing countries. In encouraging productions surplus and exportations dumping, those subsidies are decreasing the world price, which is at its lowest level since the great depression (Devarakonda). In the mean time, cotton producers in America are seeing a tremendous increase in their production surplus, due to the subsidies they are benefiting from, while West African cotton producers are on the verge of bankruptcy, incapable of competing with American subsidies or of establishing a trade war. Rural communities across the developing world are suffering directly as a consequence of those subsidies.
It is well know that the United States supports “Free Trade” and “Trade liberalization” in developing countries, but the establishments of those cotton subsidies is paradoxical because they are against the development of Free Trade and are completely against the principle of perfect competition. Since the US exports 40% of the world’s cotton (Fair-trade Foundation Report) its domestic policies affect West-Africans countries whose trade balance depends on cotton exportation (Mali, Burkina Faso, Togo etc).
Cotton in the American and West African economy Cotton is relatively a minor component of economic activity in developed countries – accounting for 0.12 % of total trade (WTO), but its production plays a major role in some developing countries, like in West Africa. In Benin, Burkina Faso, Chad, Mali and Togo, cotton accounts for 5-10% of the national GDP (World Bank), more than one third of total export receipts and over two-thirds of the value of agricultural exports. In Cote d’Ivoire and Cameroon, which are among the largest African cotton producers, cotton production accounts for 1.7 and 1.3 % of their GDP. Conversely, we can see that West African countries heavily
American subsidies are endangering the agriculture of cotton in most of West Africa and other developing countries. In encouraging productions surplus and exportations dumping, those subsidies are decreasing the world price, which is at its lowest level since the great depression (Devarakonda). In the mean time, cotton producers in America are seeing a tremendous increase in their production surplus, due to the subsidies they are benefiting from, while West African cotton producers are on the verge of bankruptcy, incapable of competing with American subsidies or of establishing a trade war. Rural communities across the developing world are suffering directly as a consequence of those subsidies.
It is well know that the United States supports “Free Trade” and “Trade liberalization” in developing countries, but the establishments of those cotton subsidies is paradoxical because they are against the development of Free Trade and are completely against the principle of perfect competition. Since the US exports 40% of the world’s cotton (Fair-trade Foundation Report) its domestic policies affect West-Africans countries whose trade balance depends on cotton exportation (Mali, Burkina Faso, Togo etc).
Cotton in the American and West African economy Cotton is relatively a minor component of economic activity in developed countries – accounting for 0.12 % of total trade (WTO), but its production plays a major role in some developing countries, like in West Africa. In Benin, Burkina Faso, Chad, Mali and Togo, cotton accounts for 5-10% of the national GDP (World Bank), more than one third of total export receipts and over two-thirds of the value of agricultural exports. In Cote d’Ivoire and Cameroon, which are among the largest African cotton producers, cotton production accounts for 1.7 and 1.3 % of their GDP. Conversely, we can see that West African countries heavily
Cited: Department of Agriculture. "2008 Farm Bill Main Page." U.S. Department of Agriculture Home Page . Home Page. Web. 21 Dec. 2010. . Devarakonda, Ravi Kanth . "AllAfrica.com: Africa: 'Cotton Dossier ' Will Make or Break WTO 's Doha Round." AllAfrica.com: Home. Web. 15 Dec. 2010. . Fair-trade Foundation Report. "The Great Cotton Stitch-Up - STWR - Share The World 's Resources." Share The World’s Resources - STWR. Web. 21 Dec. 2010. . International Cotton Advisory Council. "The Subsidies Gap between Rich and Poor | Environment | The Guardian." Latest News, Comment and Reviews from the Guardian | Guardian.co.uk. Web. 14 Dec. 2010. . Oxfam. "Cotton." UNCTAD.ORG Home. Web. 12 Dec. 2010. . USAID. "USAID Africa." U.S. Agency for International Development. Web. 17 Dec. 2010. . "WTO | Agriculture - Sub-Committee on Cotton." World Trade Organization - Home Page. 12 June 2004. Web. 09 Dec. 2010.