Cotton Subsidies, the WTO, and the ‘Cotton Problem’

Baffes, John

关键词: ADVERSE EFFECTS;    AGRICULTURAL COMMODITIES;    AGRICULTURAL CROPS;    AGRICULTURAL PRICES;    AGRICULTURAL PRODUCTS;   

DOI  :  10.1596/1813-9450-5663
RP-ID  :  WPS5663

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Following an 8-year long dispute overcotton subsidies, Brazil and the United States signed aMemorandum of Understanding on April 21, 2010, effectivelypaving the way for settling the dispute. This paper arguesthat cotton subsidies are just the tip of the iceberg whilea number of other, perhaps more important, issues requireattention and, indeed, political will. Chief among them isthe persistent divergence between cotton prices and theprices of other agricultural commodities, which reflects,for the most part, the large supply response by China andIndia, a direct consequence of con-version to biotech cottonvarieties in these (and other) countries. Such response --which kept cotton prices low, compared with othercommodities -- imposes a competitive disadvantage tonon-users of biotech cotton. The paper also highlights twoadditional constraints faced by the cotton producingcountries of West and Central Africa, namely, the structuralinefficiencies of their primary processing industries (alsoknown as ginning) and the appreciation of the CFA francagainst the US dollar. Without downplaying the importance ofsubsidy elimination, the paper concludes that theseimpediments should receive high priority in the policy agenda.