India is backing major cotton growing African countries in their demand for immediate elimination of cotton export subsidies and a timeline for reduction of domestic support by heavily subsidising members such as the US.
This was agreed to at the World Trade Organisation’s Ministerial meet in Nairobi last December.
“While the four cotton growing African countries (C4) are leading the demand for reduction and elimination of cotton subsidies, India, too, is supporting the cause as its cotton farmers are adversely affected by cheap subsidised cotton from the West both in the domestic and export market,” an official keeping track of the on-going negotiations on agriculture at the WTO told BusinessLine.
At a meeting in Geneva earlier this month, New Delhi, which supports its cotton farmers through a minimum support price (MSP), had underscored the importance of focussing on how much support individual farmers get.
“India said that countries should give information on support per farmer, the average earnings of farmers and the average size farm holding to ensure that all are not painted by the same brush,” the official added.
In the last nine years, of the $47 billion handed out as cotton subsidies by major players, over $24 billion has been given by the US, $15 billion by China, $7 billion by the EU and less than $1 billion by India, according to figures compiled by international think-tank Africa Europe Faith and Justice Network.
Interestingly, Nobel laureate economist Joseph E Stiglitz, at an event in Bengaluru last week, said that the Modi government, like Brazil, should drag the US to the WTO for subsidising its cotton farmers as it was one of the countries worst affected by it.
While India may not have any immediate intention of taking on the US individually on the matter, it is adding its voice to that of the C4 (Burkina Faso, Benin, Chad and Mali) which have pleaded that domestic support programmes of major producers need to be slashed as these were forcing thousands of young cotton farmers in their countries to turn to migration in order to earn a living.
The countries asked members to explain how they intend to implement the Nairobi decision on cotton under the three pillars of export competition, market access and domestic support.
The US is not just one of the biggest subsidy providers but is also the largest exporter of cotton. According to the National Cotton Council of America, the US is expected to export 10.2 million bales in 2016 capturing almost 30 per cent of world trade in cotton of 35.8 million bales, while India would export half of that at 5.4 million bales.
Source:.thehindubusinessline.com
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