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Last week, China announced it would provide substantial subsidies to growers in the form of improved free seed and upgraded agricultural practices.
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Last week, China announced it would provide substantial subsidies to growers in the form of improved free seed and upgraded agricultural practices.

Hot water
for cotton

U.S. to face world criticism during March WTO session on subsidies

By Jane Roberts
Scripps Howard News Service

MEMPHIS — The U.S. cotton industry, beleaguered by price and world opinion, feels it’s about to be kicked again in a high-level WTO session that will give its detractors the floor.

A mid-March meeting, called by WTO Director General Pascal Lamy, is scheduled two weeks after the United States defends itself in Geneva against Brazil’s allegations that the United States has not adequately reduced cotton subsidies as required by a 2005 WTO ruling.

“It’s the National Cotton Council’s contention that the March meeting is taking place when you will have the panel deliberating on the settlement,” said Mark Lange, president and CEO of the council. “It’s hard to believe the U.S. cotton industry, and U.S. agriculture in general, is getting a fair hearing.”

The “high-level” March meeting will focus on the economics of West African cotton production.

Results of discussion

Lange and others in the industry expect the discussion to galvanize sentiment against U.S. cotton and the subsidies that protect it.

“We’re not saying we don’t subsidize. We’re saying there are a whole lot of other things going on in the fiber market that people historically like to ignore,” Lange said. “It’s fine to whip up on the United States, but it’s hard to talk about less transparent policies.”

Among them are the tariffs China imposes on cotton imports to protect its own production, in effect granting its cotton producers sizeable subsidies through improved prices.

Last week, China announced it would provide substantial subsidies to growers in the form of improved free seed and upgraded agricultural practices.

“This is designed to encourage their cotton producers to produce the most cotton they can instead of going all out for grain,” said Carl Anderson,
professor emeritus at Texas A&M.

“They are trying their best to rely on the least amount of imports possible.”

The issue came to a head last week when French President Jacques Chirac called for the abolishment of U.S. cotton subsidies, blaming them for poverty in West African nations, many of which were colonized by France.

Colonialism

“When the president of France hypocritically blames African poverty on the U.S. cotton program, he blindly ignores decades of colonialism,” said Woody Anderson, Texas cotton producer.

The history of colonialism, he said, today allows companies partially owned by the French government to extract profits from African agriculture.

“The question is why does the WTO concern itself so much with what the United States is doing when it’s well known that many of these other countries provide considerable government assistance?” asked Anderson.

Critics say the a WTO agreement based on cuts for U.S. cotton without corresponding increases in market access will be devastating to Southern agriculture.

Last summer, the United States was forced to terminate a cotton subsidy that paid textile mills and merchants to buy U.S. cotton when it was more expensive then the world price.

Since it expired, U.S. cotton exports have dropped significantly.

Early this month, NCC said shipments were down 4 million bales, about 40 percent of what had been sold this time last year.

More than half of the excess is sitting in warehouses in Memphis, at taxpayer expense, waiting for China to run out of cotton.

But because the world now consumes about 4 million more bales than it grows, most economists think China eventually will be forced to buy U.S. cotton.

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