The US press didn’t pay too much attention to this, but Congress authorized President Bush’s decision to comply with a WTO ruling (instigated by Brazil) that mandates the elimination of major subsidies to US cotton producers. Before I get into how much this will benefit the world’s poor at the expense of only a few rich agribusiness companies, let me note that this is the first and possibly the last time you will seem me praising Congress, Bush and/or the WTO (oh my!). To approve of them all at one time is just crazy talk.
Why is the elimination of cotton subsidies a good thing? Well, the US government is always clamoring for greater “free trade”, as it describes it. It says that the world economy is better off if all countries reduce subsidies and tariffs. One of the many problems with this argument is that the US has simply not been following its own advice. It bullies other countries into opening up their markets through the WTO while keeping its own domestic subsidies. The result is farmers in poor nations cannot grow crops because subsidized versions from the US (and/or Europe and/or Japan) are cheaper to buy than locally grown crops. As Oxfam notes, Cotton is a perfect example of this. So the local economy tanks and US farmers win. TIME magazine points out the irony that the money we give out as aid to West African cotton producers is often equivalent to the damage we do to their economy:
“…annual losses in export earnings in most West African cotton-producing countries are comparable to U.S. aid donations. Burkina Faso, for instance, received $10 million in U.S. aid in 2002 but lost an estimated $13.7 million in exports because of U.S. cotton subsidies”
So US farmers are benefitting at the expense of poor farmers in the global south. But the “US farmers” are not who we think they are; they tend to be a less cuddly group. I love the idea of helping family farms, but when 61% of the total cotton subsidies (in 2004) go to the top ten producers, it doesn’t strike me as very equitable.
By eliminating major cotton subsidies, the US will allow poor countries to work their way out of poverty. Aid can only go so far; people need to be able to fend for themselves. By stopping the flow of subsidized cotton to the global south, we are giving poor farmers a chance to help themselves and their communities. Way to go Bush/Congress/WTO. Relish in my praise, it is pretty rare.
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