African nations' push to reform US and European cotton subsidies will succeed only if the stalled Doha round of trade negotiations are revived and produce a deal, a WTO official said on Thursday.
"If you ... are worried about where we are on cotton, worry and care about state of the (Doha) round, because this is not going to move unless and until the round moves," said Crawford Falconer, chair of World Trade Organisation agriculture talks. The Doha round was suspended in July amid finger-pointing over subsidies and tariff levels for farm goods.
Officials from the four African nations that have spearheaded a WTO initiative to reform cotton trade - Benin, Burkina Faso, Chad and Mali - were in Washington this week urging rich countries to halt trade-distorting subsidies. Fifteen million farmers in Africa, the visiting officials said, depend on cotton to make a living. Developed nations' subsidies push down world cotton prices, they complain, and threaten farmers' precarious livelihoods.
"National income has been reduced; small farmers' income has dropped significantly" due to subsidies from the United States, Europe and Turkey, Choguel Kokala Maiga, Mali's trade minister, told the conference, organised by the International Food and Agricultural Trade Policy Council. Francois Traore, head of a regional cotton association, said that if world trade rules can't make cotton more equitable, African cotton farmers will disappear.
"We are going to fall further and further into poverty," he said. Many of those African nations, which rely on cotton for up to 70 percent of their farm export receipts, want the United States to compensate them for profit they say they've lost.
The United States maintains its subsidies - which Oxfam says totalled $5 billion in 2005 - don't have a long-term effect on world prices, and notes it provides many of those nations with foreign aid. But many academics, world trade officials and developing world officials don't agree.
The United States reformed export subsidies after a WTO challenge from Brazil, but it continues other supports, such as counter-cyclical payments and marketing loans.
Dan Sumner, an expert at the University of California Agricultural Issues Center, said axing US cotton subsidies would push world prices up by 10 percent. US output would drop by a fifth, and exports would drop more.
Mark Lange, president of the National Cotton Council, acknowledged that US subsidies affect world prices, but said other factors were also driving poverty in Africa.
Crawford said the US subsidy program "contributes to the problem" of low world prices. The cotton initiative is "one other reason we need to make this round succeed," he said. Falconer said it was still possible to restart Doha negotiations, but he was sober about its chances. "I think it's still possible to do it," he said. "I don't think there's any point in sunnily believing it will just happen. It could fail."