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State support for growers of cotton may go by next July

Posted in Policy & Legislation

AFRICA - The World Trade Organisation (WTO) has moved a step further towards abolishing subsidies offered to cotton farmers in rich countries after negotiators agreed that the State support should be removed by July next year.

WTO spokesperson Keith Rockwell announced the agreement Thursday afternoon, but it will still have to be approved by the respective trade ministers.

The deal to phase out subsidies in developed countries is being pushed by four countries — Benin, Burkina Faso, Mali and Chad— who say they are distorting the market and hurting their small-scale farmers.

They also want the agreement to include duty- and quota-free access for cotton and cotton by-products to other markets.

 “Negotiators have agreed that cotton subsidies be removed by July 2016,” Mr Rockwell said without addressing the other two issues of market access.

The four co-sponsors of the Sectoral Initiative in Favour of Cotton have been agitating for the deal for the past 14 years. They said that they represent 10 million cotton farmers.

 “These four countries, which are among the weakest and most vulnerable in the world, note with considerable regret that, so far, while the negotiations conducted actively both in Geneva and Nairobi have failed to achieve any substantial progress, the distorting effects on the international cotton market of the subsidies and domestic support accorded by WTO members persist,” they said in a statement earlier Thursday morning.

The four said they will hold the countries concerned responsible if a deal is not reached, noting the livelihoods of many small farmers around the world are tied to cotton and the talks outcome.

Kenya’s cotton industry has declined over the past three decades. In 1995, the government withdrew credit support and inputs to farmers, which hurt cotton development.

The industry has also suffered from the cheap imports of second-hand clothes.

Ministers from the four countries said that the decisions reached will have an impact on industrialisation in Africa with regard to cotton and the textiles sector, adding that 40 countries in the continent grow cotton. Subsidies topic has dominated the Nairobi talks that end on Friday.

December 17, 2015;