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US to cooperate with African countries on cotton sector

22 Jun '12
5 min read

The West African contingent also heard a report from Dr. Gary Adams, the NCC’s vice president, Economics & Policy Analysis, regarding the 2012 farm bill and the cotton provisions that the NCC has proposed for inclusion in that legislation. Adams explained that the proposal, if enacted, will result in significant reform and a deep reduction in budget outlays of as much as 50 percent when compared to historical levels.

“We believe U.S. production of cotton has responded to markets and not to programs, and that the decisions our farmers make in the future will continue to be market driven under the new policy,” Coley said.

Coley also conveyed the NCC’s concerns regarding market disrupting and distorting policies recently implemented by several countries, particularly the adverse impacts of the ban on cotton exports imposed by India in 2010 and the subsequent ban temporarily implemented earlier this year.

“While the initial result was to drive up prices, which some may have welcomed, the results were ultimately devastating,” Coley said. “Mills reduced purchases in response to the spike in prices caused by the ban. Anytime we lose consumption it is hard to regain. In some cases, mills were bankrupted and defaulted on contracts. I believe we have a mutual interest in strongly objecting to market disruptive actions, including export bans.”

Coley told the group the NCC also is concerned by China’s introduction of a very generous domestic support program that guarantees China’s cotton farmers prices well above world prices.

“China is an important market for all of us, but if they provide an artificial incentive to their growers to produce cotton, regardless of prevailing market prices, the cotton growers in West and Central Africa and the U.S. will be seriously impacted,” Coley said.

“We also are concerned with the way China is strategically limiting market access and the build-up of substantial reserves which account for a substantial percentage of the world’s cotton stocks and allow China to influence world prices.”

Coley said the NCC is addressing three core issues -- market access, export subsidies and domestic support – about which the West Africans are concerned.

“We eliminated an export subsidy and our export credit programs are being substantially modified,” he stated. “We have supported enhanced market access by supporting duty-free, quota-free access for your fiber and by the extension of the important textile market access provisions in AGOA. We also have addressed your concern about our domestic supports by proposing significant reforms to the U.S. cotton program for inclusion in the new farm law.”

Coley emphasized that U.S. and West African growers have many issues in common.

“We look forward to engaging in a dialogue with your industry representatives and we will look forward to your responses about how WACIP can be improved,” he said. “Your producers will benefit when yields are enhanced, when they receive a larger share of the world price and when there is true competition for their business. We believe enhanced communications, as well as programs like WACIP and others, can advance those objectives.”

National Cotton Council

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