India backs C4 demand for eliminating cotton subsidies

12 Jul '16

2 min read

India has supported the demand by cotton four (C4) countries—Burkina Faso, Benin, Chad and Mali—for a timeline reduction of subsidies to cotton growers by countries like the US, at the Cotton Development Assistance Consultations held earlier this month at the World Trade Organization (WTO) in Geneva.

The Indian government is of the view that countries providing cotton subsidies should release information related to support per farmer, the average earnings of farmers, and the average size of agricultural field, for better analysis of subsidies provided by various governments, according to media reports.

At over $24 billion, the US is the biggest subsidy provider to cotton growers. The country is also the largest exporter of cotton, which affects the economies of C4 countries which largely rely on cotton exports.

Speaking for the C4 countries at the forum, ambassador Thiam Diallo of Mali said the domestic support programmes of major producers were continuing to put downward pressure on global prices to cotton, to the detriment of C4 farmers. This in turn is having “dramatic consequences” on rural African communities and forcing thousands of young people to turn to migration in order to earn a living. The statement was supported by the Group of Least-developed countries (LDCs).

The WTO's latest consultations on cotton included the fifth dedicated discussion on trade-related developments for cotton as well as Director General's Consultative Framework Mechanism on Cotton. The discussions were the first since WTO members adopted a decision on cotton at their 10th Ministerial Conference in Nairobi last December.

The decision requires developed countries to eliminate export subsidies for cotton immediately and for developing countries to do so by January 1, 2017. Developed country members, and developing country members declaring themselves in a position to do so, shall also grant, to the extent provided for in their respective preferential trade arrangements in favour of LDCs, duty free and quota free market access for cotton produced and exported by LDCs as from January 1, 2016.

The domestic support part of the Nairobi decision acknowledges members' reforms in their domestic cotton policies — which may help to reduce trade distorting domestic subsidies for cotton production – and stresses that more efforts remain to be made. (RKS)

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