Cochran: African proposal would not help

Cochran expressed those thoughts in a letter to U.S. Trade Representative Robert Zoellick and Agriculture Secretary Ann Veneman as representatives began arriving for the 5th Ministerial meeting of the World Trade Organization in Cancun, Mexico. The letter was co-signed by Sens. Blanche Lincoln, D-Ark., and Saxby Chambliss, R-Ga.

Cochran, chairman of the Senate Agriculture Committee, is representing the U.S. Senate at the talks in Cancun, while Rep. Bob Goodlatte, chairman of the House Agriculture Committee, is representing the House.

In their proposal, Benin, Burkina Faso, Chad and Mali asked for a sectoral initiative on cotton, separate from multilateral negotiations, that calls for complete elimination of global cotton subsidies within three years and transitional compensation for reputed damages to their economies.

Farmers in those countries have been the subject of numerous articles that purported to show that U.S. cotton subsidies have led to their impoverishment. The articles appear to have been orchestrated by Oxfam, a London-based charitable group.

“We are sensitive to the economic difficulties of these countries, but the sharp decline in cotton prices since the mid 1990s is not due to the U.S. cotton program,” Cochran, R-Miss., said. “One widely reported analysis asserts that the United States has increased cotton production in the face of the price slump. This is not the case.”

According to July 2003 USDA numbers, Cochran’s letter noted, U.S. cotton production averaged 18.8 million bales over the 1994-96 period, but only 18.2 million bales over the more recent 2000-2002 period, a decline of 3.2 percent. Over the same two periods, the U.S. share of world cotton production fell from 21 percent to 19.9 percent.

Cochran said the same widely reported analysis attempts to put a price tag on the effects of the U.S. cotton program on the cotton-producing region of Africa, claiming the latter has cost African producers $300 million from depressed world prices and displaced sales.

“If one accepts this premise, and we do not, based on the collective GDP of just Burkina Faso, Benin, Chad and Mali, eliminating U.S. cotton subsidies would increase their GDP by less than 1 percent,” the letter said. “In reality, ending the U.S. cotton program would only harm U.S. producers.

“It would have no long-lasting positive effect on the four countries seeking assistance.”

The current round of multilateral trade negotiations offers the world the opportunity to “increase market access and further discipline trade distorting domestic support and export subsidies,” the letter said.

“However, a sectoral initiative focusing specifically on the U.S. cotton program is counterproductive to U.S. cotton’s interest and distracts from multilateral reform of agricultural trade.”

In separate documents provided to U.S. negotiators, the National Cotton Council also called attention to world fiber consumption trends. According the NCC studies, while West African countries increased their production and exports by over 2 million bales from 1990-2003, world consumption of cotton outside the U.S. was unchanged at 72 million bales.

U.S. consumption, meanwhile, increased by more than 8 million bales, making the U.S. the only source of growth in retail purchases of cotton. “Clearly U.S. and African farmers have a common interest in increasing world consumption of cotton, which will be much more productive than time spent debating subsidies,” the NCC said in a statement.

National Cotton Council Chairman Bobby Greene said the U.S. cotton industry appreciates the Senators’ voice as these WTO agricultural negotiations get underway.

“Senators Cochran, Lincoln and Chambliss understand U.S. cotton’s importance,” Greene said. “They know how devastating it would be to undermine the successful government-industry partnership that supports this nation’s No. 1 food and fiber crop, its vast infrastructure of jobs and its contributions to the economy,” Greene said.

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