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US Farm Programs and African Cotton

February 2007

Read "US Farm Programs and African Cotton" [PDF]

Cotton has come to symbolize the "Development" in the Doha Development Round, as it exemplifies the impact of trade-distorting subsidies on developing country farmers. The International Food & Agricultural Trade Policy Council (IPC) has published IPC Issue Brief 22, by Daniel Sumner, the director of the University of California Agricultural Issues Center. Titled "US Farm Programs and African Cotton," the Brief describes the domestic and international factors influencing US cotton policy: the US Farm Bill, the US-Brazil WTO cotton case, and the WTO's sectoral initiative on cotton. Sumner discusses how each of these factors might impact future US cotton production, and, in turn, developing country farmers. Although estimates about how subsidies affect prices vary, they all point to the clear fact that US subsidies suppress international prices of cotton. Sumner calculates that elimination of all US cotton programs, with other US farm programs remaining in place, would reduce US production by 25 to 30 percent, decrease U.S. exports by about 40 percent, and raise world prices by about 10 percent. This would translate into $75 million additional revenue for the C-4 countries. If production rose modestly to about 1.8 billion pounds, net gains to the African cotton industry would be around $80 million.

The report also suggests that cotton subsidy reform in the US would translate into positive benefits for rural communities in African countries, given that fifteen million African cotton farmers derive their livelihoods from cotton production. Sumner concludes with concrete recommendations for what developing countries can do to advocate for cotton reform.

IPC has also published a conference report of an International Conference on Cotton, "The Next Steps for Africa," held in October of 2006, which details the trade, competitiveness, and donor coordination challenges related to enhancing cotton production in Africa.

Read "The Next Steps for Africa: A Report of an International Conference on Cotton." [PDF]

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