- A Pound of Cotton can be produced for 12 pence in Burkina Faso, compared to 42 pence in the US. Subsidies are keeping inefficient, high cost American farmers in the global market.
- Subsidies to US, EU and Chinese cotton farmers reduces the price of cotton by 10-15%. This costs farmers in West Africa $75- $100 million a year.
- Removal of all cotton subsidies and import tariffs would boost economic welfare by $283million per year. The largest beneficiary would be sub Saharan Africa, which would benefit by approximately $147 million. Many of those who would benefit are poor farmers.
- More than 66% of people surviving on less than $1 a day are agricultural labourers or small holding farmers.
- Agriculture is the largest employer in low income countries. about 60% of labour force and 25% of GDP
- Every $1 lost in economic welfare actually costs a lot more. The lower income means lower investment as farmers struggle to get enough income to survive.
- Higher cotton prices and incomes would enable a boost in investment and diversification in many developing countries.
- Cotton exports are relatively insignificant to the US economy, but cotton farmers are a powerful political lobby politicians are reluctant to annoy. By contrast, cotton accounts for 50% of Burkina Faso's exports; the removal of cotton subsidies and tariffs would have a big impact on this developing economy.
- Cost to US Taxpayer of subsidising cotton.
- Would help general trade negotiations
Tuesday, August 5, 2008
10 Reasons to Stop Subsidising Cotton
Posted by Tejvan Pettinger at 12:01 PM