With seven days to go before the World Trade Organization (WTO) Ministerial in Hong Kong (MC6), Oxfam publishes a report today highlighting the detrimental impact of US cotton subsidies and dumping on China's 46 million cotton farmers.
The WTO MC6 is an important chance to move the Doha round forward and to reduce trade-distorting agricultural subsidies, including those for cotton. However, the US and the EU have resisted making deep enough agricultural reforms, slowing negotiations to a stand-still.
WTO Director-General Pascal Lamy also made no concrete proposal to address the issue of cotton in the draft Ministerial text.
Chong Chan-yau, Executive Director of Oxfam Hong Kong, has just returned from Xinjiang, one of China's poorest regions and one of the country's biggest cotton-producing provinces.
"The influx of subsidized US cotton threatens the livelihoods of over 46 million cotton farmers in China, affecting over 143 million adults and children who depend on cotton revenues. The US must agree at the MC6 to reform its cotton subsidies so that poor cotton farmers in China - and other developing countries - have a fair opportunity for trade and development," Chan-yau said.
According to the aggressive WTO accession terms demanded by rich countries, China has opened its markets but the US continues to insulate its own cotton sector. The low price of cotton has alarmed farmers in China.
In 2005, 10 per cent of land devoted to cotton farming has been lost in China. This reduction could cost farmers RBM1.68 billion ($208m) in lost income, and the loss of approximately 720,000 jobs.
The Oxfam study "No Soft Landing" found that high US subsidies and cotton dumping are distorting the international price of cotton. In China, the procurement prices fell from a high of RMB 7 to 8 ($0.87 - 0.99) per kilogram in 2003, to only RMB 4 ($0.50) in 2004.
