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Cotton : Market setting, trade policies, and issues

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  • Baffes, John

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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Bibliographic Info

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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References

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  1. 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.
  2. Bruce A. Babcock & John C. Beghin & Jacinto F. Fabiosa & Stephane De Cara & Amani Elobeid & Cheng Fang & Chad E. Hart & Murat Isik & Holger Matthey & Alexander E. Saak & Karen Kovarik & FAPRI Staff, 2002. "Doha Round of the World Trade Organization: Appraising Further Liberalization of Agricultural Markets, The," Center for Agricultural and Rural Development (CARD) Publications 02-wp317, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  3. 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.
  4. 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).
  5. Fang, Cheng & Beghin, John C., 2003. "Protection and Comparative Advantage of Chinese Agriculture: Implications for Regional and National Specialization," Staff General Research Papers 10102, Iowa State University, Department of Economics.
  6. 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.
  7. Stephen Tokarick, 2003. "Measuring the Impact of Distortions in Agricultural Trade in Partial and General Equilibrium," IMF Working Papers 03/110, International Monetary Fund.
  8. repec:rus:hseeco:123040 is not listed on IDEAS
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Citations

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Cited by:
  1. Berk Özler & Giovanna Prennushi, 2006. "Toward Greater Global Equity," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 32, pages 3-15.
  2. Tonshia Luster & Andrew Barkley, 2011. "The Economic Determinants of the Number of Minority Farmers in the Southeast Region of the United States, 1969-1997," The Review of Black Political Economy, Springer, vol. 38(1), pages 83-101, March.
  3. 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.
  4. Pan, Suwen & Welch, Mark & Mohanty, Samarendu & Fadiga, Mohamadou L. & Ethridge, Don E., 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).
  5. Baffes, John & Gohou, Gaston, 2005. "The co-movement between cotton and polyester prices," Policy Research Working Paper Series 3534, The World Bank.
  6. Surabhi Mittal, 2007. "Oecd Agricultural Trade Reforms Impact On India’s Prices And Producers Welfare," Trade Working Papers 22225, East Asian Bureau of Economic Research.
  7. Jonathan Kaminski & Alban Thomas, 2011. "Land Use, Production Growth, and the Institutional Environment of Smallholders: Evidence from Burkinabè Cotton Farmers," Land Economics, University of Wisconsin Press, vol. 87(1), pages 160-182.
  8. Richard Pomfret, 2004. "Trade Policies in Central Asia after EU Enlargement and before Russian WTO Accession: Regionalism and Integration into the World Economy," School of Economics Working Papers 2004-13, University of Adelaide, School of Economics.
  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.
  10. 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.
  11. Kenneth Reinert, 2007. "The European Union, the Doha Round, and Asia," Asia Europe Journal, Springer, vol. 5(3), pages 317-330, September.
  12. Onumah, Gideon & Davis, Junior & Kleih, Ulrich & Proctor, Felicity, 2007. "Empowering Smallholder Farmers in Markets: Changing agricultural marketing systems and innovative responses by producer organizations," MPRA Paper 25984, University Library of Munich, Germany.
  13. Stephen Tokarick, 2008. "Dispelling Some Misconceptions about Agricultural Trade Liberalization," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 199-216, Winter.
  14. Kaminski, Jonathan & Thomas, Alban, 2009. "Commodity Reform and Extensive Production Growth: Evidence from Burkinabè Cotton Farmers," TSE Working Papers 09-008, Toulouse School of Economics (TSE).
  15. 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.
  16. KAMINSKI Jonathan & THOMAS Alban, 2009. "Commodity Reform and Extensive Production Growth: Evidence from Burkinabè cotton farmers," LERNA Working Papers 09.01.277, LERNA, University of Toulouse.

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