The international agency Oxfam announced that it is concerned that the United States has signaled its intention to fight to defend its massive cotton subsidy program that is causing suffering to millions of poor Brazilian and African farmers.
The US announced that it is appealing a World Trade Organization (WTO) ruling that had declared the majority of US cotton subsidies illegal.
In a new report, Oxfam details how US subsidies encourage overproduction and facilitate the dumping of excess cotton overseas, undermining the livelihoods of poor farmers in the developing world.
The report, Finding the Moral Fiber: Reform Needed for Fair Cotton Trade, was published as part of Oxfam’s Make Trade Fair campaign. It urges the US to reform its farm programs and stop dumping.
“The appeal casts serious doubts about whether the US has any real intention to reform its unfair cotton industry,” said Celine Charveriat, head of Oxfam International’s Geneva office.
“The case against US cotton dumping is plain and overwhelming and confirmed by the WTO. The US was part of a world-wide commitment in July to make “ambitious” reforms of cotton subsidies – and this appeal flies in the face of this commitment.”
In a case brought by Brazil and backed by other developing nations, a WTO panel found in September that $3.2 billion in US annual cotton subsidies and $1.6 billion in export credits (for cotton and other commodities) are illegal under WTO rules.
“The US uses the dispute settlement mechanism more than any other WTO member. Not only does the US have a moral obligation to stop dumping cotton, but it is also in its own interest to follow the WTO’s findings,” Charveriat said.
Oxfam estimates that US dumping created losses of almost $400 million for poor cotton-producing African countries between 2001 and 2003.
The new report shatters the myth that farm subsidies help small US family farms, revealing instead that the largest 10% of cotton farms in the US receive a staggering 78% of subsidies.
In Finding the Moral Fiber, Oxfam calls on the US to swiftly implement the WTO ruling and negotiate new rules that would stop dumping. Doing so would bring relief to the millions of farmers in poor countries dependent on cotton for their livelihood.
“You must tell the Americans that we are all in one world, they are our brothers, we need each other,” said Nicodeme Biwando, a cotton farmer in Burkina Faso quoted in the Oxfam report.
“Their way of doing things is not good, because it keeps us from moving forward. May they find a solution so that all of us together, them and us, can make progress.”
Some of the facts discussed in the report: The United States government regularly spends up to US$ 4 billion a year in subsidies to the cotton sector, a total that is more than the GDP of Benin, Burkina Faso and Chad.
The US spends three times more money propping up its domestic cotton industry than it spends on aid to all Africa in a year.
Cotton is one of the most widely produced agricultural crops in the developing world. Ten million households in West Africa depend on cotton for their livelihoods.
Cotton is produced at a net cost to the US, whose subsidies depress world cotton prices by 26 percent. This cripples poor African farmers, who cannot compete.
Over 75 percent of the world’s poorest people rely on farming as a living, making less than a dollar per day. Many of them are too poor to send their kids to school, buy basic medicines or put food on the table because the rules of farming and trade are rigged against them.
Oxfam International, founded in Britain and with offices in 12 countries, including the US, Great Britain and Canada, calls itself a confederation of 12 organizations working together with over 3000 partners in more than 100 countries to find lasting solutions to poverty, suffering and injustice.
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