Cotton Price Distortions: Building a case for reform
Abstract
In some major producing countries, up to half of the returns to cotton farmers come from government subsidies. In some cases, the subsidies are counter cyclical so that the recipient farmers never face the realities and disciplines of the world cotton market. These countries also maintain substantial barriers to imports of yams, textiles and clothing. The consequences of highly protective policies for non-subsidising countries are disastrous. When international prices start to fall, there is no supply response in countries, such as the United States, which heavily subsidise their producers. The subsequent over-supply greatly exacerbates the downturn in world prices so that all the adjustment is forced onto non subsidising countries. This in nun causes significant social disruptions, particularly in developing countries.
Files in this item
This item appears in the following categories
- 2002 Australian Cotton Conference
Proceedings from the 2002 Australian Cotton Conference