GENEVA — China’s support to its cotton producers reached $7.9 billion in 2010, surpassing by a wide margin the levels provided by the other major cotton nations such as the U.S., Turkey and Brazil, according to a new report from the Paris-based Organization for Economic Cooperation & Development.
The Chinese subsidies, all in market price support, amounted to 50.6 percent of the gross farm receipts for cotton, the OECD said. Outlays by the U.S. last year were $126.9 million, or 1.7 percent of gross farm receipts for cotton, while the subsidies by Turkey were $346.3 million, representing 11.3 percent of receipts, and Brazil’s funding was $127.3 million, or 7.2 percent of cotton receipts.
In 2009, China’s payments to cotton farmers were $6.6 billion, or 53.9 percent of receipts, the U.S.’ were $119 million, or 3 percent, Brazil’s were $431 million, or 23.4 percent, and Turkey’s were $329 million, or 18 percent.
Romain Benicchio, advocacy officer with the aid group Oxfam International, pointed out at a World Trade Organization forum on cotton that while subsidies in the U.S. go to thousands of farmers, in China they go to support about 41 million farmers, of whom 80 percent have small holdings. But some farm analysts said that if China, currently the world’s biggest producer and importer of cotton, continues to increase subsidies, its production could continue to expand and imports from traditional suppliers, including poor West African cotton producers, would likely decline.
Farm analysts said the decisive factor for poor cotton exporters could be Chinese outlays and not so much the U.S. However, African envoys said China is buying more cotton from their countries and are considering filing a cotton case in the WTO against the U.S. Brazil successfully challenged in the WTO that U.S. subsidies amounting to some $3 billion a year breached global trade rules. This led the U.S. to scrap some of the distorting cotton measures but Brazil was authorized to retaliate with punitive measures, which have since been resolved.
El Hadji A. Diouf, executive director of the African agency for trade and development, estimates that between 2002 and 2010, the damage U.S. cotton subsidies inflicted on African cotton producers is about $1.3 billion.