Global Policy Forum

International agency Oxfam is concerned that the United States has signaled its intention to fight to defend its massive cotton subsidy program that is causing suffering to millions of poor African farmers. The US announced today that it is appealing a World Trade Organization (WTO) ruling that had declared the majority of US cotton subsidies illegal.

In a new report today, Oxfam details how US subsidies encourage overproduction and facilitate the dumping of excess cotton overseas, undermining the livelihoods of poor farmers in the developing world. The report, Finding The Moral Fiber: Why Reform Is Urgently Needed For A Fair Cotton Trade, was published as part of Oxfam's Make Trade Fair campaign. It urges the US to reform its farm programs and stop dumping.

"The appeal casts serious doubts about whether the US has any real intention to reform its unfair cotton industry," said Celine Charveriat, head of Oxfam International's Geneva office. "The case against US cotton dumping is plain and overwhelming and confirmed by the WTO. The US was part of a world-wide commitment in July to make "ambitious" reforms of cotton subsidies -- and this appeal flies in the face of this commitment."

In a case brought by Brazil and backed by other developing nations, a WTO panel found in September that $3.2 billion in US annual cotton subsidies and $1.6 billion in export credits (for cotton and other commodities) are illegal under WTO rules. "The US uses the dispute settlement mechanism more than any other WTO member. Not only does the US have a moral obligation to stop dumping cotton, but it is also in its own interest to follow the WTO's findings," Charveriat said.

Oxfam estimates that US dumping created losses of almost $400 million for poor cotton-producing African countries between 2001 and 2003. The new report counters the myth that cotton subsidies help small US family farms, by pointing out that the largest 10 percent of cotton farms in the US receive a staggering 78 percent of subsidies. In Finding the Moral Fiber, Oxfam calls on the US to swiftly implement the WTO ruling and negotiate new rules that would stop dumping. Doing so would bring relief to the millions of farmers in poor countries dependent on cotton for their livelihood.

"You must tell the Americans that we are all in one world, they are our brothers, we need each other," said Nicodeme Biwando, a cotton farmer in Burkina Faso quoted in the Oxfam report. "Their way of doing things is not good, because it keeps us from moving forward. May they find a solution so that all of us together, them and us, can make progress."

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