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Chinese cotton subsidy below WTO mandated policy

25
May '10
China is allowed to provide a micro-subsidy of less than 8.5 percent on cotton, according to a World Trade Organisation (WTO) accession agreement. Measured on the level, the maximum annual amount of the subsidy roughly amounts to 5–6 billion Yuan.

In fact, the subsidy benefits doled out by the government to the cotton farmers is much less than that figure. In 2009, the government gave out subsidies to totaling to 1.3 billion Yuan as seed subsidy.

However, although the government again set aside more than 2 billion Yuan as purchase and storage fund, the benefits of purchase and storage did not reach cotton farmers, but only benefited cotton processors.

But the US, which is the biggest exporter of cotton to China, has provided US $1 billion as subsidies to farmers every year from 2008 –2012, including more than US $600 million as direct subsidies for farmers.

Fibre2fashion News Desk


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