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Understanding the impact of Cotton Subsidies on developing countries

Author

Listed:
  • 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
    as

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    File URL: https://mpra.ub.uni-muenchen.de/15373/1/MPRA_paper_15373.pdf
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    References listed on IDEAS

    as
    1. Bautista, Romeo M. & Thomas, Marcelle., 1998. "Agricultural growth linkages in Zimbabwe: income and equity effects," TMD discussion papers 31, International Food Policy Research Institute (IFPRI).
    2. Louis M. Goreux & Paul R Masson & Dhaneshwar Ghura & Ousmane Badiane, 2002. "Cotton Sector Strategies in West and Central Africa," IMF Working Papers 02/173, International Monetary Fund.
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    5. Nicholas Minot & Lisa Daniels, 2005. "Impact of global cotton markets on rural poverty in Benin," Agricultural Economics, International Association of Agricultural Economists, vol. 33(s3), pages 453-466, November.
    6. Stephen Tokarick, 2003. "Measuring the Impact of Distortions in Agricultural Trade in Partial and General Equilibrium," IMF Working Papers 03/110, International Monetary Fund.
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    Citations

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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. 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.
    4. Addison, Tony, 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).
    5. 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.
    6. 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.
    7. 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).
    8. 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).
    9. 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.
    10. 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.
    11. 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.
    12. Ilhem Baghdadli & Hela Cheikhrouhou & Gael Raballand, 2007. "Strategies for Cotton in West and Central Africa : Enhancing Competitiveness in the "Cotton 4"," World Bank Publications, The World Bank, number 6784, April.
    13. 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).
    14. 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.

    More about this item

    Keywords

    Cotton; Subsidies; Development;

    JEL classification:

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

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