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The "Cotton Problem"

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  • John Baffes

Abstract

Cotton is an important cash crop in many developing economies, supporting the livelihoods of millions of poor households. In some countries it contributes as much as 40 percent of merchandise exports and more than 5 percent of GDP. The global cotton market, however, has been subject to numerous policy interventions, to the detriment of nonsubsidized producers. This examination of the global cotton market and trade policies reaches four main conclusions. First, rich cotton-producing countries should stop supporting their cotton sectors; as an interim step, transfers to the cotton sector should be fully decoupled from current production decisions. Second, many cotton-producing (and often cotton-dependent) developing economies need to complete their unfinished reform agenda. Third, new technologies, especially genetically modified seed varieties, should be embraced by developing economies; this would entail extensive research to identify varieties appropriate to local growing conditions and the establishment of the proper legislative and regulatory framework. Finally, cotton promotion is needed to reverse or at least arrest cotton's decline as a share of total fiber consumption. Copyright 2005, Oxford University Press.

Suggested Citation

  • John Baffes, 2005. "The "Cotton Problem"," The World Bank Research Observer, World Bank, vol. 20(1), pages 109-144.
    • Handle: RePEc:oup:wbrobs:v:20:y:2005:i:1:p:109-144
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    Citations

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    Cited by:

    1. Josily Samuel & Pushpanjali & R Rejani & Basavaraja H, 2015. "Production, Growth and Export Competitiveness of Raw Cotton in India – an Economic Analysis," Agricultural Research & Technology: Open Access Journal, Juniper Publishers Inc., vol. 1(1), pages 1-5, September.
    2. Delpeuch, Claire & Vandeplas, Anneleen, 2013. "Revisiting the “Cotton Problem”—A Comparative Analysis of Cotton Reforms in Sub-Saharan Africa," World Development, Elsevier, vol. 42(C), pages 209-221.
    3. Claire Delpeuch & Antoine Leblois, 2013. "Sub-Saharan African Cotton Policies in Retrospect," Development Policy Review, Overseas Development Institute, vol. 31(5), pages 617-642, September.
    4. Coulibaly, Adama Ekberg & El Helepi, Medhat & Chikhuri, Krishna & Ali, Tariq, 2016. "The Doha agenda: What’s in it for Africa, and what next for secured development outcomes and fast integration imperatives?," Conference papers 332770, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Kym Anderson & Will Martin & Dominique van der Mensbrugghe, 2006. "Doha Merchandise Trade Reform: What Is at Stake for Developing Countries?," The World Bank Economic Review, World Bank, vol. 20(2), pages 169-195.
    6. Kym Anderson & Ernesto Valenzuela & Lee Ann Jackson, 2008. "Recent and Prospective Adoption of Genetically Modified Cotton: A Global Computable General Equilibrium Analysis of Economic Impacts," Economic Development and Cultural Change, University of Chicago Press, vol. 56(2), pages 265-296, January.
    7. Hoekman, Bernard & Martin, Will & Mattoo, Aaditya, 2010. "Conclude Doha: it matters!," World Trade Review, Cambridge University Press, vol. 9(3), pages 505-530, July.
    8. Baffes, John, 2007. "Distortions to Cotton Sector Incentives in West and Central Africa," Agricultural Distortions Working Paper Series 48526, World Bank.
    9. Kym Anderson & Will Martin & Dominique van der Mensbrugghe, 2006. "Would Multilateral Trade Reform Benefit Sub-Saharan Africans?," Journal of African Economies, Centre for the Study of African Economies, vol. 15(4), pages 626-670, December.
    10. Kohnert, Dirk, 2008. "EU-African Economic Relations: Continuing Dominance, Traded for Aid?," MPRA Paper 9434, University Library of Munich, Germany.
    11. Kym Anderson & Ernesto Valenzuela, 2007. "The World Trade Organisation's Doha Cotton Initiative: A Tale of Two Issues," The World Economy, Wiley Blackwell, vol. 30(8), pages 1281-1304, August.
    12. Chad E. Hart & John C. Beghin, 2004. "Rethinking Agricultural Domestic Support under the World Trade Organization," Center for Agricultural and Rural Development (CARD) Publications 04-bp43, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    13. Antoine Bouët & Guillaume P. Gruère, 2011. "Refining Opportunity Cost Estimates of Not Adopting GM Cotton: An Application in Seven Sub-Saharan African Countries," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(2), pages 260-279.
    14. Kohnert, Dirk, 2007. "African Migration to Europe: Obscured Responsibilities and Common Misconceptions," GIGA Working Papers 49, GIGA German Institute of Global and Area Studies.
    15. Anderson, Kym & Valenzuela, Ernesto, 2006. "WTO's Doha Cotton Initiative: A Tale of Two Issues," CEPR Discussion Papers 5567, C.E.P.R. Discussion Papers.
    16. Bassett, Thomas J., 2014. "Capturing the Margins: World Market Prices and Cotton Farmer Incomes in West Africa," World Development, Elsevier, vol. 59(C), pages 408-421.
    17. John Baffes, 2011. "Cotton Subsidies, the WTO, and the ‘Cotton Problem’," The World Economy, Wiley Blackwell, vol. 34(9), pages 1534-1556, September.
    18. Pitoro, Raul & Walker, Thomas S. & Tschirley, David L. & Swinton, Scott M. & Boughton, Duncan & de Marrule, Higino Francisco, 2009. "Can Bt Technology Reduce Poverty Among African Cotton Growers? An Ex Ante Analysis of the Private and Social Profitability of Bt Cotton Seed in Mozambique," 2009 Conference, August 16-22, 2009, Beijing, China 51633, International Association of Agricultural Economists.
    19. Kohnert, Dirk, 2006. "Vom Nutzen afrikanischer Zuwanderer für Europa. Wende in der EU-Einwanderungspolitik? [On the benefit of African immigration to Europe. Turn in the EU immigration policy?]," MPRA Paper 1064, University Library of Munich, Germany.
    20. Kym Anderson & Ernesto Valenzuela & Lee Ann Jackson, 2007. "Recent and Prospective Adoption of Genetically Modified Cotton: A Global CGE Analysis of Economic Impacts," Centre for International Economic Studies Working Papers 2007-07, University of Adelaide, Centre for International Economic Studies.
    21. Antoine Bouet & Guillaume Gruère, 2010. "Refining opportunity cost estimates of not adopting GM cotton : An application in seven sub-saharan african countries," Larefi Working Papers 201002, Larefi, Université Bordeaux 4.
    22. Apperson, George P., 2014. "Agricultural Commodity Futures Market Volatility: A Case for Punctuated Equilibrium," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196760, Southern Agricultural Economics Association.
    23. Blasco, Lorea Barron & Devadoss, Stephen & Stodick, Leroy, 2006. "The Doha Round Declaration on Cotton: A Catalyst for Poverty Reduction in Africa?," 2006 Annual meeting, July 23-26, Long Beach, CA 21161, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    24. Apperson, George P., 2017. "Agricultural Commodity Futures Price Volatility: A Market Regulatory Policy Study," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258210, Agricultural and Applied Economics Association.
    25. Anderson, Kym & Jackson, Lee Ann & Valenzuela, Ernesto, 2006. "GM Cotton Adoption, Recent and Prospective: A Global CGE Analysis of Economic Impacts," CEPR Discussion Papers 5568, C.E.P.R. Discussion Papers.

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