U.S. policy keeps poverty alive (15/12/2005)

1.WTO talks risk running aground
2.At the end of the chain, the farmers who face ruin
3.African officials: U.S. policy keeps poverty alive
4.US offers a glimmer of hope at WTO talks with offer on cotton

EXCERPT: The US gives approximately $3.4bn (GBP2bn) a year in subsidies to its 25,000 cotton farmers; more than the entire GDP of Burkina Faso. Subsidies dramatically increased in the US after the 2002 Farm Act and US cotton production has recently reached historic highs. It is now the world's second largest cotton producer, behind China, and the biggest exporter - an easy achievement because US cotton prices no longer bear any relation to production costs. (item 2)

COMMENT: In the run up to Hong Kong, the US announced the allocation of $7 million to a West African project intended to introduce GM cotton and help West African countries with their cotton marketing.

This "aid" can be directly measured against the cost and impact of the US's massive cotton subsidies which are now in the spotlight in Hong Kong, as can be seen in all the following articles.

These are subsidies which even the WTO has ruled to be wrong. And in response to the denunciations of its poverty-creating cotton subsidies, the US has said in Hong King that it is now ready to offer African cotton farmers duty-free access to US markets.

But as Phil Bloomer, head of Oxfam's Make Trade Fair campaign points out this is little short of a bad joke:

"Africa does not export a single gram of cotton to the US and has not done so for years. The problem for West African cotton farmers is not market access -- it is the US subsidies that lead to dumping." (item 4)

The development group Action Aid provides the following costing on the impact of US cotton subsidies:

- Production costs in Africa are amongst the lowest in the world and the cotton quality very high, making African producers potentially some of the most competitive global players.

- Cotton revenues constitute from 50-80% of the exports of Mali, Benin, Togo and Burkina Faso.

- More than 9 million people in West Africa rely on cotton for their livelihood.

- In 2002, the US produced 36% of the world's cotton exports. In the same year, subsidies to its 30,000 cotton farmers amounted to $3.6bn.

- The World Bank (2002) found that an end to all forms of global protection would increase cotton prices by an average of 12.7% over a 10-year period. The largest gains would go to Africa, with exports increased by an average of 12.6%.

- The African countries that rely on cotton are among the poorest of the world. http://www.lobbywatch.org/archive2.asp?arcid=5943

If the US really wanted to help people in West Africa, it would stop making hollow gestures and pushing GM crops and do what groups like Action Aid and Oxfam are asking:

- announce the immediate elimination of all forms of trade distorting subsidies to the cotton sector

- provide not "aid" but compensation to those involved in the cotton production sectors of poor countries who have suffered as a result of its policies.

But far from offering poor countries even a modicum of redress in this area, a spokesman for the United States trade representative responded to the WTO's ruling by defending the US's farm subsidies, saying, "We will defend US agricultural interests in every form we need to."

The US, incidentally, while happily using USAID to push GM crops in countries that it has itself impoverished, spends less than one-half of 1 percent of its federal budget on aid, making it the smallest contributor of foreign aid among major donor governments in terms of national wealth (GNP).

1.WTO talks risk running aground
From Agencies in Hong Kong
The Times, December 14, 2005

Talks at the World Trade Organisation meeting in Hong Kong became increasingly acrimonious today and risked falling apart as the European Union, United States and Africa failed to find any common ground.

As South Korean farmers clashed with police outside the summit venue for a second day, inside American delegates accused an unmoved EU of jeopardising the talks by refusing to budge on farming subsidies and tariffs.

But the US also found itself under attack from African cotton producers who claim massive American subsidies drive down the prices of their crops, crippling their economies. African nations, angry at heavy subsidies paid to farmers in much of the developed world, were an important factor in the collapse of the 2003 WTO meeting in Cancun, Mexico.

Shrugging off African calls for cuts to American cotton subsidies, Rob Portman, the US trade representative, said that if the EU did not allow the developing world greater access to its markets he "did not see anyone else moving".

Suggesting he holds little hope for a successful conclusion to the Hong Kong meeting, he has already called for a date for further talks.

Meanwhile, African cotton producers warned that they would refuse to endorse any consensus that did manage to emerge from the talks if rich countries - including the US and EU - failed to commit themselves to reducing cotton subsidies.

"We came here to get concrete results, not to hear more proposals that will never be respected," Ibrahim Malloum, head of the African Cotton Producers Association, said.

"If we don’t get a concrete result, Africa will not be able to go along with a consensus."

African producers are seeking the abolition of official assistance to cotton exports from January 1.

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