A Short Note on Cotton Negotiations

Agriculture is important to the economies of many countries, and from time to time, changes are made in the agricultural business to improve transparency and fairness. New efforts are made to help agriculture progress. From 1986–to 1984, there were several negotiating visits to Uruguay. This was the biggest expedition for negotiations on trade. According to these deliberations, an organisation was formed to coordinate between the developed & developing countries in import-export and agriculture in international markets.

Ministers met in Marrakesh, and the Regime was signed on 15 April 1994, based on negotiations in Uruguay. The World Trade Organisation(WTO) was established at this meeting, which is also known as the Marrakesh Agreement.

Its headquarter is in Geneva, Switzerland. Director-General of the World Trade Organisation is Ngozi Okonjo-Iweala from 1 March 2021.

Agriculture Trade Negotiations

The conference of ministers from various countries takes place every 1 to 2 years, and their ambassadors are held every year in the World Trade Organisation(WTO). The main six topics in agriculture negotiations are raised in every meeting in the field of food and agriculture trade. The challenges of the cotton trade are also being addressed by negotiators, as are limits on measures that have similar impacts to export subsidies. Let us discuss them briefly. 

• Domestic Subsidies:  Domestic agricultural subsidies have been a point of contention for a long time. Subsidies are offered in the areas of research and food security to encourage the agriculture sector.
• Market Access: Protecting agricultural markets through border measures such as high tariffs can limit farmers’ access to markets while increasing the cost of food for consumers. The primary goal of this negotiation is to reduce tariffs and eliminate non-tariff related increases in the coming years.

• Export Competition:  A commitment to increase transparency in implementing 2015 commitments to eliminate export subsidies and introduce new measures affecting export competition. It also seeks to prohibit export prohibitions or restrictions on foodstuffs purchased for noncommercial humanitarian purposes by the World Food Program, a United Nations agency. The United Nations organisation is in charge of providing humanitarian food assistance.
• Cotton: Cotton has been an essential negotiation of the WTO, and one of the following, stated in the World Trade Organisation, is that the trade organisation is balanced. Developed countries should import agricultural products from developing and less developed countries. Change the subsidy provisions so that least-developed or developing countries can compete in the international market.
• Special safeguard mechanism: When import volumes exceed a preset volume or import prices fall below a preset level, the (Agreement on agriculture)AoA empowers WTO members to impose exceptional protections in the form of additional tariffs on particular sensitive products.
• Public Stockholding for Food Security Purposes: The member of the WTO enacted this rule for this country to fall into the category of developed countries or for the volume of trade to increase, causing other countries to suffer; thus, the rule of public stockholding for food security purposes was enacted.

Cotton Negotiations: A Negotiable Dispute 

Cotton is the most important of the above negotiations, and it has been contentious between India and the WTO. Every year, before the cotton season, the Ministry of Agriculture of the Government of India sets a minimum support price for farmers to ensure that they do not lose money. This price is set before the crop is sown. The minimum support price in India has been raised from Rs. 5255 to Rs. 5515 in 2021.

Cotton subsidies have been a source of contention for decades. Until about ten years ago, cotton farms used to receive half or more of their revenue from government payments and related programmes, such as government-sponsored crop insurance and export subsidies, until about ten years ago. Many observers complained that the subsidies allowed US manufacturers to maintain and expand production even when market prices were expected to be below. The result was an increase in US exports, a distortion of global cotton markets, and a reduction in the incomes of cotton producers in other countries, including some of the world’s poorest people, particularly in West Africa.

Cotton is subsidised for all countries, and each country has been divided into three categories, one of which is developed and the other is developing. African countries are one of the world’s least developed countries. During World Trade Organisation talks held based on the Council of Ministers, it was stated that goods manufactured in any country must be imported into other countries for that country’s economy to improve.

Because of the factories in developed countries, they continued to develop, but the countries that used to produce any goods are now poor due to a lack of other means. The World Trade Organisation(WTO)has set a time limit for all countries of up to 5 years, during which they have been told that they can export products such as cotton until this period, after which developed countries will be considered.

Few communities were organised for this negotiation.

•  Nairobi Decision on Export Competition
• Bali Ministerial Conference.

Conclusion 

Countries such as America began providing cotton farmers with subsidies, resulting in lower cotton prices on the international market and increased exports, preventing the economies of the least-developed countries (LDCs) from catching up with those of the developed countries. Agriculture was the foundation of their economy. Burkina Faso, Benin, Chad, and Mali are among the countries involved. Cotton cultivation is the most prevalent in these countries. Cotton 4 Countries, or C3, are the names of these countries. In a meeting of ministers, the World Trade Organisation agreed to subsidise them so that this country can also be classified as a developing country.