Press Release from the Institute for Agriculture and Trade Policy
September 13, 2003
Contact: Ben Lilliston, in Cancun – 044-998-860-6632, blilliston@iatp.org
Mark Ritchie, 612-644-2728, mritchie@iatp.org
Draft Declaration Short Changes Cotton
Text Ignores Supply Management
Cancun - The latest WTO draft declaration fails to address the plight of West African cotton
producers and highlights the need for international agreements on commodity production and
prices. While the current rhetoric is focused on export subsidies, West African farmers are
demanding a much more fundamental change in the supply management of cotton that is driving
down world prices for cotton producers everywhere, says the U.S. based Institute for Agriculture
and Trade Policy.
Rather than truly addressing the problem of low prices for this commodity, the United States
government is pushing for further consultations within other areas of the WTO negotiating
agenda that deflect the problem to value-added sectors of cotton.
The US market prices for cotton determine world market prices. Since the signing of the WTO
agreements, dumping of U.S. cotton has doubled with recent exports at roughly half the cost of
production. These low prices are created by huge cotton surpluses on the market. A recent study
by the Agriculture Policy Analysis Center for the University of Tennessee finds that the primary
solution to these low prices is the introduction of supply management programs in the US to
prevent oversupply in the world market.
This study also concludes that the elimination of U.S. government payments would have little
effect on the overall supply and would only result in the increase of cotton prices by roughly 10
percent. With cotton prices currently at half the cost of production, this would mean that cotton
producers in West Africa will continue to lose money with or without U.S. payments. Only a
global supply management approach would bring prices up to levels high enough to cover the
cost of production for small farmers in the developing world.
West African Network of Farmers Organizations (ROPPA) are calling for supply management
and a minimum guaranteed price for their producers. "After so many comments and declarations
of sympathy with our cause from the WTO secretariat and many ministers, the mountain gave
birth to an ant!" commented Francois Traoré, head of the National Union of Cotton Producers of
Burkina Faso, in a press release. "The rhetoric was not matched with facts."
“The only way forward on the commodity crisis” according to Mark Ritchie, President of the
Institute for Agriculture and Trade Policy, “is to adopt global agreements to bring supply in line
with demand in order to insure fair prices to family farmers everywhere.”
The Institute for Agriculture and Trade Policy promotes resilient family farms, rural communities
and ecosystems around the world through research and education, science and technology, and
advocacy.