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Cotton : Market setting, trade policies, and issues

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Author Info
Baffes, John

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Abstract

The value of world cotton production in 2000-01 has been estimated at about $20 billion, down from $35 billion in 1996-97 when cotton prices were 50 percent higher. Although cotton's share in world merchandise trade is insignificant (about 0.12 percent), it is very important to a number of developing countries. Cotton accounts for approximately 40 percent of total merchandise export earnings in Benin and Burkina Faso, and 30 percent in Chad, Mali, and Uzbekistan. Its contribution to GDP in these and other developing countries is substantial, ranging between 5 and 10 percent. Cotton supports the livelihoods of millions in developing countries (at least 10 million in West and Central Africa) where it is a typical, and often dominant, smallholder cash crop. The cotton market also has been subject to considerable market intervention-subsidization in the European Union and the United States, and taxation in Africa and Central Asia. During the past three seasons, annual direct support averaged $4.5 billion. The author reviews the market setting and policy issues and gives recommendations on how industrial and developing cotton-producing countries can improve the policy environment.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3218.

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Date of creation: 01 Feb 2004
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Handle: RePEc:wbk:wbrwps:3218

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Keywords: Textiles; Apparel&Leather Industry; Agricultural Research; Economic Theory&Research; Crops&Crop Management Systems; Environmental Economics&Policies; Crops&Crop Management Systems; Textiles; Apparel&Leather Industry; Agricultural Research; Environmental Economics&Policies; Livestock&Animal Husbandry;

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Badiane, Ousmane & Ghura, Dhaneshwar & Goreux, Louis & Masson, Paul, 2002. "Cotton sector strategies in West and Central Africa," Policy Research Working Paper Series 2867, The World Bank. [Downloadable!]
    Other versions:
  2. Fang, Cheng & Beghin, John C., 2002. "Protection and Comparative Advantage of Chinese Agriculture: Implications for Regional and National Specialization," Staff General Research Papers 10102, Iowa State University, Department of Economics.
  3. Minot, Nicholas & Daniels, Lisa, 2002. "Impact of global cotton markets on rural poverty in Benin," MSSD discussion papers 48, International Food Policy Research Institute (IFPRI). [Downloadable!]
    Other versions:
  4. Jay Fabiosa & John Beghin & Stéphane de Cara & Amani Elobeid & Cheng Fang & Murat Isik & Holger Matthey & Alexander Saak & Pat Westhoff & D. Scott Brown & Brian Willott & Daniel Madison & Seth Meyer , 2005. "The Doha Round of the World Trade Organization and Agricultural Markets Liberalization: Impacts on Developing Economies," Review of Agricultural Economics, American Agricultural Economics Association, vol. 27(3), pages 317-335, 09. [Downloadable!] (restricted)
  5. Stephen Tokarick, 2003. "Measuring the Impact of Distortions in Agricultural Trade in Partial and General Equilibrium," IMF Working Papers 03/110, International Monetary Fund. [Downloadable!]
  6. Pray, Carl & Ma, Danmeng & Huang, Jikun & Qiao, Fangbin, 2001. "Impact of Bt Cotton in China," World Development, Elsevier, vol. 29(5), pages 813-825, May. [Downloadable!] (restricted)
  7. Giannis Karagiannis & Christos Pantzios, . "To comply or Not to Comply with Policy Regulations: The Case of Greek Cotton Growers," Working Papers 9817, University of Crete, Department of Economics.
  8. repec:rus:hseeco:123040 is not listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Surabhi Mittal, 2007. "OECD Agricultural Trade Reforms Impact On India's Prces and Producer's Welfare," Working Papers id:1072, esocialsciences.com. [Downloadable!]
    Other versions:
  2. Falck-Zepeda, Jose & Horna, Daniela & Smale, Melinda, 2007. "The economic impact and the distribution of benefits and risk from the adoption of insect resistant (Bt) cotton in West Africa:," IFPRI discussion papers 718, International Food Policy Research Institute (IFPRI). [Downloadable!]
  3. Kenneth Reinert, 2007. "The European Union, the Doha Round, and Asia," Asia Europe Journal, Springer, vol. 5(3), pages 317-330, September. [Downloadable!] (restricted)
  4. Richard Pomfret, 2005. "Trade Policies in Central Asia after EU Enlargement and before Russian WTO accession: Regionalism and Integration into the world economy," Others 0502003, EconWPA. [Downloadable!]
    Other versions:
  5. KAMINSKI Jonathan & THOMAS Alban, 2009. "Commodity Reform and Extensive Production Growth: Evidence from Burkinabè cotton farmers," Working Papers 09.01.277, LERNA, University of Toulouse. [Downloadable!]
  6. Baffes, John & Gohou, Gaston, 2005. "The co-movement between cotton and polyester prices," Policy Research Working Paper Series 3534, The World Bank. [Downloadable!]
  7. Pan, Suwen & Welch, Mark & Mohanty, Samarendu & Fadiga, Mohamadou & Ethridge, Don, 2005. "Assessing the Impacts of the Chinese TRQ System and U.S. Subsidies on the World Cotton Market," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 6(2). [Downloadable!]
  8. Berk Özler & Giovanna Prennushi, 2006. "Toward Greater Global Equity," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 32, pages 3-15. [Downloadable!]
  9. Kaminski, Jonathan, 2008. "Changing Incentives to Sow Cotton for African Farmers: Evidence from the Burkina Faso Reform," Discussion Papers 45779, Hebrew University of Jerusalem, Department of Agricultural Economics and Management. [Downloadable!]
  10. Dominique van der Mensbrugghe & John C. Beghin, 2004. "Global Agricultural Liberalization: An In-Depth Assessment of What Is At Stake," Food and Agricultural Policy Research Institute (FAPRI) Publications 04-wp370, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University. [Downloadable!]
    Other versions:
  11. Shepherd, Ben & Delpeuch, Claire, 2007. "Subsidies and regulatory reform in West African cotton: What are the development stakes?," MPRA Paper 2289, University Library of Munich, Germany. [Downloadable!]
  12. Kaminski, Jonathan, 2008. "Wealth, Living Standards and Perceptions in a Cotton Economy: Evidence from the Cotton Reform in Burkina Faso," Discussion Papers 45780, Hebrew University of Jerusalem, Department of Agricultural Economics and Management. [Downloadable!]
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