Category Archives: Cotton and Economic Development

The 2014 Farm Bill and Cotton: Proof that the WTO Matters

The 2014 farm bill (Agricultural Act of 2014) fundamentally reduced the level of agricultural subsidies for all the program crops, and the bill changed the way that subsides are calculated by eliminating the Direct Payments, Countercyclical Payments, and Average Crop Revenue Election Payments and substituting revenue insurance programs, including the Stacked Income Protection Plan (STAX) for upland cotton—almost all cotton in the world is classified as upland.

Farm bills are products of diverse influences, including policy objectives, political pressures and budget limitations. The 2014 farm bill was uniquely influenced by an additional factor, the legal ramifications of the Brazil cotton case in the World Trade Organization (WTO).

In WTO parlance, upland cotton was treated “specifically” and “ambitiously,” within the 2014 farm bill, and such treatment would never have happened but for the legal pressure brought by Brazil under the Dispute Settlement Mechanism within the World Trade Organization (WTO), augmented by the force of moral suasion brought by African countries and their supporters within the Talks on Agriculture in the Doha Development Agenda (the Doha Round).
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What is Wrong With Buffer Stocks?

Why shouldn’t countries build buffer stocks?

 In mid-March 2015, the Ministry of Textiles of the Government of India floated a proposal to guard against year-to-year fluctuations in cotton production by limiting exports in order to build a “reservoir” for use by the domestic textile industry (Business Standard, March 18, 2015).  What’s wrong with this proposal? Continue reading