"......subsidies have a dual impact......
In 2003, US cotton subsidies to its farmers were around US$4 billion. Oxfam has observed: 'America's cotton farmers receive more in subsidies than the entire GDP of Burkina Faso, three times more in subsidies than the entire US aid budget for Africa's 500 million people.'
Yet, the livelihoods of at least 10 million people in West and central Africa alone depend on revenues from cotton, including some 6 million rural households in Nigeria, Benin, Togo, Mali and Zimbabwe.
In May 2003, trade ministers from Benin, Burkina Faso, Chid and Mali filed an official complaint against the US and the EU for violating WTO rules on cotton trade, claiming that their countries together lost some US$ 1 billion a year as a result of cotton subsidy
In Mali, more than 3 million people - a third of its population - depend on cotton not just to live but to survive; in Benin and Burkina Faso, cotton forms almost half of the merchandise exports. Yet thanks to subsidies (USA & Europe), Mali loses nearly 2 per cent of GDP and 8 per cent of export earnings; Benin loses almost 2 per cent of its GDP and 9 per cent of export earnings; and Burkina Faso loses 1 per cent of GDP and 12 per cent of export earnings. Moreover, a 40 per cent reduction in the world price (that is, equivalent to the price decline that took place from December 2000 to May
2002) could imply a 7 per cent reduction in rural income in a typical cotton-producing country in West Africa.
(Dead Aid. Dambisa Moyo. Pg 116)
No comments:
Post a Comment