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Understanding the impact of Cotton Subsidies on developing countries

Author

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  • Gillson, I
  • Poulton, Colin
  • Balcombe, Kelvin
  • Page, S

Abstract

Models developed to investigate the impact of cotton subsidies have found that US support, by virtue of its absolute magnitude, is particularly damaging and responsible for most of the reduction in cotton-earning potential in developing countries. This has been used as an argument for reducing or postponing cuts in subsidies to European farmers, as these appear to have less impact on developing countries. Our results, through a careful examination of the nature of the cotton market, agree but suggest that under certain assumptions subsidies by smaller subsidisers (such as the EU) may be disproportionately harmful to some suppliers, notably to West and Central African countries. This is especially damaging to them since they have the potential to increase supply.

Suggested Citation

  • Gillson, I & Poulton, Colin & Balcombe, Kelvin & Page, S, 2004. "Understanding the impact of Cotton Subsidies on developing countries," MPRA Paper 15373, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:15373
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    References listed on IDEAS

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    Cited by:

    1. Vitale, Jeffrey D. & Sanders, John H., 2005. "Estimating the Impacts of Liberalization in West Africa: The Malian Case," 2005 Annual meeting, July 24-27, Providence, RI 19481, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Shepherd, Ben, 2006. "Estimating Price Elasticities of Supply for Cotton: A Structural Time-Series Approach," MPRA Paper 1252, University Library of Munich, Germany.
    3. Tony Addison, 2005. "Post-Conflict Recovery: Does the Global Economy Work for Peace?," WIDER Working Paper Series DP2005-05, World Institute for Development Economic Research (UNU-WIDER).
    4. Kohnert, Dirk, 2007. "Crisis Region Western Africa - The cradle of African migration to Europe," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 37-55.
    5. Orden, David & Salam, Abdul & Dewina, Reno & Nazli, Hina & Minot, Nicholas, 2006. "The Impact of Global Cotton Markets on Rural Poverty in Pakistan," 2006 Annual meeting, July 23-26, Long Beach, CA 21381, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Hazell, Peter & Poulton, Colin & Wiggins, Steve & Dorward, Andrew, 2010. "The Future of Small Farms: Trajectories and Policy Priorities," World Development, Elsevier, vol. 38(10), pages 1349-1361, October.
    7. Ian Taylor, 2016. "Bait and Switch: The European Union’s Incoherency towards Africa," Insight on Africa, , vol. 8(2), pages 96-111, July.
    8. Delpeuch, Claire, 2011. "African cotton markets at crossroads : will the price spike turn into a new kick-start ?," Policy Research Working Paper Series 5847, The World Bank.
    9. Fousseini TRAORE & Stéphane CALIPEL & Catherine ARAUJO BONJEAN, 2006. "L’impact des aides américaines et européennes sur le marché du coton : résultats d’un modèle d’équilibre partiel dynamique," Working Papers 200610, CERDI.
    10. Ilhem Baghdadli & Hela Cheikhrouhou & Gael Raballand, 2007. "Strategies for Cotton in West and Central Africa : Enhancing Competitiveness in the "Cotton 4"," World Bank Publications - Books, The World Bank Group, number 6784, December.
    11. Gadanakis, Yiorgos & Baourakis, George & Clapan, Carmen, 2007. "Measuring the impacts of distortions in the European Union cotton sector: a partial equilibrium analysis using the ATPSM model framework," Working Papers 7285, TRADEAG - Agricultural Trade Agreements.
    12. Wang, Ping & Kinnucan, Henry W. & Duffy, Patricia A., 2017. "Effects of China's Rising Labor Costs on the World Cotton Market," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258431, Agricultural and Applied Economics Association.
    13. Traoré, Fousseini, 2013. "Estimating the supply elasticity of cotton in Mali with the Nerlove Model: A bayesian method of moments approach," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 94(3).
    14. Jeffrey D. Vitale & Hamady Djourra & Aminata Sidibé, 2009. "Estimating the supply response of cotton and cereal crops in smallholder production systems: recent evidence from Mali," Agricultural Economics, International Association of Agricultural Economists, vol. 40(5), pages 519-533, September.
    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. Xinyao Wang & Dan Li & Yue Yu, 2022. "Current Situation and Optimization Countermeasures of Cotton Subsidy in China Based on WTO Rules," Agriculture, MDPI, vol. 12(8), pages 1-16, August.
    17. Risely Ferraz-Almeida & Raquel Pinheiro da Mota, 2021. "Routes of Soil Uses and Conversions with the Main Crops in Brazilian Cerrado: A Scenario from 2000 to 2020," Land, MDPI, vol. 10(11), pages 1-16, October.
    18. Sukhpal Singh, 2021. "Nature and Dynamics of Farm Labour Work: A Case Study of Cotton in the Indian Punjab," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 64(2), pages 447-459, June.
    19. Cororaton, Caesar B. & Orden, David, 2008. "Pakistan's cotton and textile economy: Intersectoral linkages and effects on rural and urban poverty," Research reports 158, International Food Policy Research Institute (IFPRI).
    20. 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.
    21. 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).
    22. David Guerreiro, 2009. "Une méta-analyse de l’impact des subventions sur le prix mondial du coton," Working Papers hal-04140843, HAL.

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    More about this item

    Keywords

    Cotton; Subsidies; Development;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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