Vol. 5 Num 994 Sun. March 18, 2007  

African cotton states see US farm bill increasing subsidies

The US Farm Bill is "counterproductive" in its current form and could lead to increased subsidies to US cotton formers of up to 65 percent, African cotton producing nations said here on Friday.

"If the new American law is approved as it stands, it will be counterproductive," Benin's trade minister Moudjaidou Issifou Soumanou told reporters following a meeting with World Trade Organisation Director General Pascal Lamy.

"The proposed reforms will increase cotton subsidies by 60 to 65 percent."

African cotton producers have lost 30 percent of their revenues in recent years, due to subsidies in the West, and a decline in the market price of the commodity, Soumanou added.

The African ministers were in Geneva for a two-day meeting with WTO officials and other delegations on the vexed issue of cotton subsidies.

"All countries and all groups unanimously reaffirmed the need to deal with the cotton dossier ambitiously, expeditiously and specifically," Soumanou said.

Lamy agreed that cotton was an issue of "systemic importance for the multilateral trading system."

"It's a reality that African countries producing cotton are increasing their exports, but it's also a reality that the revenues of cotton producers are declining," he told reporters.

This is due to declining world price trends and also trade distortions, such as subsidies and market protection, Lamy added.

"It's clearer than ever that the single most important contribution we can make to solving this cotton problem is to finish the Doha round as soon as possible," he told reporters.

The Doha round of global trade liberalisation negotiations was launched in the Qatari capital in November 2001 but has foundered ever since, largely in disputes over tariffs on agricultural products and other forms of official farm support.