Expert answer:Write at least 500 Words on the Mali Court Case fr
Solved by verified expert:I need a paper that summarizes the Brazilian Government’s stance and view on the Mali court case. The word document below provides rubrics on how it should be written. The paper must be at least 500 words in MLA format. All works must be cited. The files and links provided should help with the paper. Please read the rubrics in the word document for further details. https://www.washingtonpost.com/news/monkey-cage/wp/2014/10/12/why-the-deal-to-pay-brazil-300-million-just-to-keep-u-s-cotton-subsidies-is-bad-for-the-wto-poor-countries-and-u-s-taxpayers/?utm_term=.36b2cca5390c
brazil_cotton_fact_sheet.pdf
impact_of_u.s._subsidies_on_west_african_cotton_production___woodward.pdf
court_case_rubric__mali_cotton_2017.docx
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COTTON FACT SHEET
BRAZIL
Brazil is the world’s 10th largest economy and the largest economy in Latin America with a GDP
of USD 1.994 trillion and a GDP per capita of USD 10,551. Brazil’s population was recorded at 198.7
million people (2008 estimates).
OVERVIEW
Brazil is the 5th largest producer and consumer (preceded by China (Mainland), India, Turkey and
Pakistan) of cotton. Relative to other crops planted, cotton is not a principal crop in Brazil. The main
commercial crops in Brazil are corn, soybeans, wheat and sugar cane.
ECONOMICS
Production in 2007/08 totaled approximately 1.6 million tons with an average yield of 1,487
kilograms/hectare. The figures for production and yield declined 5% and 2% from the previous season
respectively. The cotton industry employs an estimated 1.3 million people.
BRAZIL
According to
current data, Brazil is
the fourth largest
exporter of cotton
preceded by
Uzbekistan, India,
and the USA. Brazil
exported 486,000
tons in 2007/08. This
is an increase from
283,000 tons from the
previous year.
Exports have been
steadily increasing
although they
experienced a brief
decline in 2006/07.
This decline is also apparent in production figures; factors that influence the decline are lower prices and
consequently lower profitability, higher operational costs, issues with infrastructure and a reduction in
area allocated for farming. Brazil’s imports have remained low for the past few seasons, with a serious
drop occurring in 2007/08 season. Cotton imports dropped from 112,000 to a mere 36,000 tons. However,
Argentina has been a consistent buyer of Brazilian cotton. This is due to fact that trade is greatly
facilitated by being a neighboring country. Furthermore they are both members of the MERCOSUR
trading block (i.e. no import taxes). In addition, Indonesia and Pakistan are countries that have become
frequent buyers of Brazilian cotton. Imports of fabric, yarn and textiles from Asia (particularly India and
China) have increased in recent years.
Brazil is in the top ten textile producers in the world with the one of the largest industrial plants.
The garments and textile industry is the second largest employer in the Brazilian industry directly
providing 1.65 million jobs. The sector is responsible for approximately 17.5% of the manufacturing
industry of the country. There are an estimated 30,000 textile companies (this encompasses cotton yarn,
fiber, weaving, knitting and cotton sowing). However, more than 50% of the production is done by three
companies (Coteminas, Santista Textile and Vincunha). Historically, Brazil has exported 35% of its
textile productions, recently however it has decreased. The decline can be attributed to the current global
economic crisis (resulting in a drastic drop in consumption from the United States, which is a major
Author: Emeka Osakwe. May 26 2009.
consumer) and unfavorable exchange rates. In 2007/08, Brazil exported a considerable percentage of its
textiles (25%) to its neighbor Argentina.
PRODUCTION CHARACTERISTICS
Throughout Brazil there are approximately 1000 large cotton farms. The major cotton producing
area is the Brazilian Savannas (Matto Grosso); this area accounts for 96% of total farming area. This is an
approximate area of 1 million hectares. The remaining cotton farming takes places in the Northeast. This
is an area of approximately 4,100 hectares.
The Brazilian Savannas have
900 growers while the Northeast area
has 15,000, suggesting a higher
degree of mechanization in the
Brazilian Savannas. The average farm
size is 2000 hectares. Brazilian
producers achieve the highest rain fed
cotton yields in the world.
Approximately 3 to 4% is irrigated. In
addition the cotton farming is highly
mechanized; pesticides, fertilizers and
machines are all integrated into the
production process.
There are a number of
varieties planted. The main varieties
of cotton seed planted in the Brazil
Savannas (Matto Grosso) are FMT
701, Delta Opal and in the Northeast
Brazil Cotton Producing
the main varieties are BRS 187 CNPA
Regions
8H and BRS Araripe and BRS Serido.
Source: conab.gov.br
Structure of Industry
In the early 1990’s the
production and commercialization activities were carried out under the organization of state producer
associations and led by Brazilian Association of Cotton Producers (ABRAPA). This of course changed
and the federal administration intervention in the production and commercial activities changed
completely leading to a more market oriented value chain.
Issues
Brazilian cotton production is limited by the increasing cost of pest control, labor, fertilizer and
the transportation to the cotton and textile market on the coasts. In short, the majority of issues stem from
high input costs. For example, fertilizers on average represent 78% of total expenditures. All these factors
seem to indicate that Brazil has not yet reached its productive potential. Another widely mentioned
problem was a necessity to improve infrastructure of rails, highways and ports which are linked to
decreasing input costs. Additionally Brazil is in the process of implementing programs to suppress the
cotton boll weevil which is a major impediment to the production process.
Author: Emeka Osakwe. May 26 2009.
10‐5
The Impact of U.S.
Subsidies on West
African Cotton
Production
By:
Andrea R. Woodward
CASE STUDY #10-5 OF THE PROGRAM:
“FOOD POLICY FOR DEVELOPING COUNTRIES: THE ROLE OF
GOVERNMENT IN THE GLOBAL FOOD SYSTEM”
2007
Edited by:
Per Pinstrup‐Andersen (globalfoodsystem@cornell.edu) and Fuzhi Cheng
Cornell University
In collaboration with:
Søren E. Frandsen, FOI, University of Copenhagen
Arie Kuyvenhoven, Wageningen University
Joachim von Braun, International Food Policy Research Institute
©Cornell University, Ithaca, New York.
All rights reserved. This case study may be reproduced for educational purposes without express permission but must include
acknowledgement to Cornell University. No commercial use is permitted without permission.
The Impact of U.S. Subsidies on West African Cotton Production
Woodward
Executive Summary
Cotton subsidies and their impact on international
prices and on the livelihoods of poor African
cotton farmers have become a central focus of the
Doha Development Round of World Trade Organization (WTO) negotiations. Cotton subsidies have
taken a high profile in part because cotton is a
critical crop for some of the world’s poorest countries, including the “Cotton 4” countries of Benin,
Burkina Faso, Chad, and Mali. Another reason for
this attention is that middle-income countries such
as Brazil and China have a great deal at stake in
cotton trade and much to gain through the elimination and reform of U.S. cotton subsidies.
Because of the prominent role cotton plays in the
economies of “Cotton 4” countries, a small decline
in cotton prices can make an enormous difference
in the ability of their farmers to pay for health
care, education, and food. A good price for cotton
allows farmers to boost production of subsistence
crops, slows urbanization by keeping people in
rural areas, and creates localized wealth in rural
places that need it most.
Opponents of the U.S. cotton subsidy program
argue that it is trade distorting, because it results in
at least a 10 percent reduction in global cotton
prices. They also assert that it is a burden on U.S.
taxpayers to keep afloat an inefficient industry that
would not be profitable without subsidies. Advocates of the program argue that larger factors are
at play in the world cotton price and that the
impact of U.S. subsidies is negligible.
Cotton producers in the United States, West
Africa, and middle-income cotton countries have a
great deal at stake in the debate over subsidies. The
WTO is also a major stakeholder, because some
observers see cotton as a litmus test of whether or
not the WTO is capable of serving the interests of
less powerful countries and poor people. Important
questions for all parties include who the real winners will be if subsidies are reformed or eliminated,
what the alternatives are for cotton producers who
cannot compete in the global market, and what
kind of leverage the world’s poorest producers
might have in future trade negotiations.
Your assignment is to prepare cotton subsidy
recommendations for the next U.S. farm bill that
would be acceptable to all stakeholder groups.
Discuss policy issues regarding support for and
resistance to the recommendations, justify these
recommendations, and assess the consequences for
stakeholder groups.
Background
The Doha Round of trade negotiations, which
aimed to redress the inequities of the Uruguay
Round, called itself a development round and
sought to place agriculture at the heart of the
agenda. The negotiations collapsed in 2006 owing
to intransigence on the part of the European
Union (EU) and the United States regarding subsidies and tariffs. Even though cotton subsidies
account for just 1 percent of agricultural subsidies
in countries of the Organization for Economic
Cooperation and Development (OECD), cotton is
the commodity most often credited for unraveling
negotiations, and its subsidies have served as a
poster child for unfair trade practices worldwide
(Heinisch 2006; Williams 2003). The inequities of
trade policy in the cotton sector are most vividly
illustrated in the plight of West African producers.
In the “Cotton 4” countries of Benin, Burkina Faso,
Chad, and Mali, gains from aid are overshadowed
by losses in cotton trade due to current trade policies. The shares of people living on less than US$1 a
day in Benin, Burkina Faso, and Mali are 41 percent,
27 percent, and 72 percent, respectively (World
Bank 2006). The figure for Chad is not available,
but this country ranked 173rd out of 177 countries
on the 2003 United Nations Human Development
Index (UNDP 2005). Given that these are four of
the poorest countries in the world, their ability to
compete in a global market with a commodity for
which they have a significant comparative advantage
is crucial for their development.
Francophone Africa’s position in world cotton
production, consumption, and trade—along with
that of other regions around the world—is charted
in Figures 1 through 3.1 Figures 1 and 2 present
worldwide production and consumption patterns.
Francophone Africa is the world’s seventh-largest
1 Although these figures include African countries
outside of the “Cotton 4,” the majority of African
cotton exports come from these four countries.
©Cornell University, Ithaca, New York.
All rights reserved. This case study may be reproduced for educational purposes without express permission but must include
acknowledgement to Cornell University. No commercial use is permitted without permission.
1
The Impact of U.S. Subsidies on West African Cotton Production
Woodward
producer of cotton, producing 4 percent of the
world’s total supply. The top five cotton-producing
countries, along with their share of overall world
production, are China (26 percent), the United
States (19 percent), India (18 percent), Pakistan (8
percent), and Brazil (5 percent). The five largest
consumers of cotton, along with their share of
overall world consumption, are China (41 percent),
India (15 percent), Pakistan (10 percent), Turkey (5
percent), and the United States (4 percent).
Figure 1: World Cotton Production, 2007
Millions of metric tons
8
7
6
5
4
3
2
1
U
ni C
te h
d in
St a
at
es
I
Pa nd
ki ia
Af
st
ri c U
a
an z Bra n
Fr b ek z il
an i s
c tan
Zo
Tu n e
Au rke
st y
ra
li a
E
Sy U
Tu
r
rk Eg ia
m y
en pt
is
O t an
th
er
s
0
Source: Cotton Incorporated 2007.
Figure 2: World Cotton Consumption, 2007
Millions of metric tons
12
10
8
6
4
2
C
hi
na
I
Pa nd
k ia
U T is ta
ni u n
te rk
d e
St y
at
e
Br s
az
il
In
Ba don EU
n g es
la i a
Th de s
ai h
l
M and
ex
R ic o
us
So Ta si a
u t iw
h a
U K n
zb or
ek ea
is
O tan
th
er
s
0
Source: Cotton Incorporated 2007.
©Cornell University, Ithaca, New York.
All rights reserved. This case study may be reproduced for educational purposes without express permission but must include
acknowledgement to Cornell University. No commercial use is permitted without permission.
2
The Impact of U.S. Subsidies on West African Cotton Production
Woodward
Figure 3 illustrates Francophone Africa’s role in
cotton trade compared with that of other cottonexporting regions around the world. Francophone
Africa produces approximately 10 percent of all
cotton traded internationally, 22 percent of which
is exported to the EU and 56 percent of which is
exported to Asia. The United States produces
about 40 percent of all exported cotton, providing
11 percent of its total exports to Turkey, 17 percent
to Mexico, and 48 percent to Asia. Uzbekistan is
also a major player in cotton markets. Like Francophone Africa, this country produces about 10 percent of the world’s exported cotton, exporting 20
percent of its cotton to Europe and 37 percent to
Asia. Australia and India each account for just over
2 percent of cotton exports, with the former
sending 95 percent of its exports to Asia and 5
percent to Europe.
The Importance of Cotton in the West
African Economy
For many years, cotton was considered the “white
gold” of several West and Central African countries. The region’s comparative advantage in the
commodity is in large part what makes its farmers
the most cost-efficient cotton producers in the
world. Production costs for a farmer in Benin are
estimated to be around US$0.30 per pound,
whereas the cost for the average U.S. farmer is
around US$0.68 per pound (ICAC 2001). Not only
is labor cheaper in West Africa, but cotton produced there is also higher in quality because it is
hand-picked and therefore “cleaner” than that
picked mechanically.2 Cotton in this region is also
entirely rain fed, whereas 55 percent of cotton area
in the rest of the world is irrigated (Estur 2005b).
Because conditions in this part of the world are so
amenable to cotton production, more than 10
million people now depend on the commodity for
their livelihoods in West and Central Africa.
Ninety-seven percent of West African cotton is
exported, and the crop accounts for around onethird of total exports for both Benin and Burkina
Although the quality of the fiber is superior to that of
U.S. cotton, contamination during picking and storage
“annihilates” this comparative advantage to the extent
that the price of hand-picked cotton is discounted relative to machine-picked cotton. Some mills even refuse to
buy manually harvested cotton to avoid complaints about
low quality (Estur 2005a).
2
Faso (Estur 2005a). In Benin, approximately half of
all households rely on cotton for a portion of their
income. In Benin, Burkina Faso, Chad, Mali, and
Togo, cotton is responsible for between 2 and 5
percent of gross domestic product (GDP) (Oxfam
2005). In comparison, the entire agriculture industry in the United States accounts for 2 percent of
GDP, with cotton contributing 0.0004 percent of
U.S. GDP (World Bank, cited in Oxfam 2005).
Because of the prominent role that cotton plays in
many West and Central African countries, a small
decline in cotton prices can make an enormous
difference in the ability of these countries’ farmers
to pay for health care, education, and food. A
good price for cotton allows farmers to boost
production of subsistence crops. It also keeps rural
people from fleeing to urban centers to find
employment, and by creating localized wealth, it
encourages development of locally based initiatives
and activities (Caritas-CIDSE 2004). As might be
expected, low prices have the opposite effect on
rural cotton farmers. A study by the International
Food Policy Research Institute (IFPRI) for the
World Bank found that a 40 percent reduction in
farm-level cotton prices leads to a 21 percent reduction in income and a 20 percent rise in poverty for
cotton farmers (Minot and Daniels 2002).
U.S. Cotton Production and Subsidy
Program
The history of cotton production in the United
State parallels that of other farm sectors, with a
marked trend toward concentration of production
occurring in the latter half of the 20th century. In
1930 nearly one-third of the 6.3 million farms in
the United States produced cotton. In that year 13
million bales of cotton were produced on 42
million acres. Seventy-five years later there were
fewer than 25,000 cotton farms in the United
States, and the crop reached a record of 23 million
bales grown on 13.7 million acres (Estur 2005a).
The high levels of cotton production in the United
States have coincided with a downturn in domestic
demand. As a result, cotton exports increased to
76 percent of production in 2003, which
amounted to a 41 percent share of world exports.
©Cornell University, Ithaca, New York.
All rights reserved. This case study may be reproduced for educational purposes without express permission but must include
acknowledgement to Cornell University. No commercial use is permitted without permission.
3
The Impact of U.S. Subsidies on West African Cotton Production
Woodward
Figure 3: Leading Cotton Exporters, 2004–2006
(accounting for three-quarters of world trade)
Source: USDA 2006.
This kind of production would not be possible
without government assistance (see Box 1). Between
1998 and 2002, the United States spent US$14.8
billion to subsidize cotton valued at US$21.6 billion,
and the U.S. Department of Agriculture estimates
that without subsidies, the average U.S. cotton
farmer would have lost US$871 for each acre of
cotton planted from 1998 to 2004 (Oxfam 2004).
Current subsidy levels were legislated in the 2002
Farm Bill, which guaranteed a minimum price of
US$0.71 per pound to U.S. cotton producers.
When the 2002 Farm Bill was passed, average
world prices were around US$0.40 a pound,
although prices have since risen to about US$0.57
per pound. The total amount of cotton subsidies
distributed to producers in the crop year
2004/2005 was US$4.2 billion, which was also the
estimated total value of the crop that year (Oxfam
2005).
Not all U.S. farmers are eligible for subsidies, and
in fact most are not. According to the U.S.
Department of Agriculture (USDA), 60 percent of
all farmers and ranchers do not collect government
subsidy payments, primarily because the crops and
livestock they produce do not qualify for subsidy
programs.3 Among farmers who qualified for subsidies in 2004, 10 percent of the largest producers
received 73 percent of all subsidies. Recipients in
that category received an average of US$86,388 in
annual payments, while the bottom 80 percent of
recipients received only US$1,601 on average per
year. The 22 top producers received more than
US$1 million in subsidies (Environmental Working
Group 2006). The disparities in subsidies reveal
that the U.S. program not only disadvantages poor,
small-scale farmers in developing countries, but also
puts at risk the livelihoods of those kinds of
farmers in the United States.
The most controversial subsidy program in the
cotton sector is the “Step 2” cotton program,
which cost taxpayers US$264 million in 2004. This
program funnels tax money to U.S.-based cotton
millers and exporters so they can buy domestically
grown cotton instead of cheaper foreign cotton.
These subsidies then allow this cotton to be exported (or “dumped”) at prices that can be lower
than the cost of production. The top 10 recipients
of Step 2 subsidies in 2004 received 61 percent of
the total paid out that year, with payments ranging
For a list of the top subsidy recipients in the United
States, visit
http://www.ewg.org/farm/region.php?fips=00000.
3
©Cornell University, Ithaca, New York.
All rights reserved. This case study may be reproduced for educational purposes without express permission but must include
acknowledgement to Cornell University. No commercial use is permitted without permission.
4
The Impact of U.S. Su …
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