Increasing cotton development aid over the past seven years
Development assistance for cotton producers is approaching USD 400 million since 2005 and the major stake went to Africa. There are fears among WTO World Trade Organisation as to the proposed new US Farm Bill announcing a new and extended subsidy system
Within the WTO Framework Mechanism on Cotton’s latest meeting of June 29, 2012 there was announced that the amounts spent on completed assistance for cotton since 2005 is USD 287 million plus another USD 92 million has been spent on on-going programs worth a total of USD 310 million in promised assistance. A further USD 1.4 billion was spent on completed or continuing projects for agriculture and infrastructure in these cotton producing countries and the total commitment amounts to USD 5 billion.
The meeting heard reports from donors, and from South-South development partners Brazil, India and China. Some gave descriptions on how assistance is used to improve cotton production in Africa and elsewhere. WTO Deputy Director-General Harsha Vardhana Singh who chaired the meeting stated: “South-South Cooperation has emerged as a key aspect of the implementation of the mandate on the development assistance aspects of cotton and our work in this forum. The significant contributions of Brazil, China and India as well as Pakistan to the forum’s work are acknowledged with appreciation”.
Also present in the meeting were the proponents of cotton trade reform (Benim, Burkina Faso, Chad and Mali) thanks to financial support from China. Discussed were additionally the new proposed US Farm Bill and fear expressed that this will further deter the world cotton production. ICAC International Cotton Advisory Committee gave a breakdown of the actual price situation and stated that cotton prices peaked in the 1010/11 season over USD 2.00 per pound (lb) but now are falling back below the USD 1.00/lb mark and are not far above the 60 US cents/lb average for 2000-09. Prices are also less volatile than during the peak, now returning to fluctuate within the narrower range of 20-25 % above and below the average for the season, compared to double that range in 2010-11. The prices decline is notably attributed to increased production, as farmers responded to recent high prices – now exceeding consumption, as TextileFuture reported before – and to competition from polyester. ICAC added that French-speaking Africa’s yields of (kg of cotton produced per ha) are falling, whereas by contrast they are rising globally.