The US has accused India and China of adopting policies limiting market access to poor cotton farmers in Africa and causing volatility in international prices.

Claiming that India subsidises its local cotton growers, the US has called for a reversal of such policies to ensure greater market access opportunities, especially to the four African cotton producing countries – Burkina Faso, Mali, Chad and Benin.

India will oppose the US' claims at the WTO's Trade Negotiations Committee meeting next week and term the allegations as “highly irresponsible and attention-distracting”, senior officials in the Commerce and Industry Ministry told Business Line .

They said the Commerce and Industry Minister, Mr Anand Sharma, will also raise the issue with the US Trade Representative, Mr Ron Kirk, during his visit to the US next week.

The matter pertains to an “early harvest package” of the WTO's Doha Round talks. The package is to include an agreement on issues of interest to the Least Developed Countries and reduction of cotton subsidies.

On cotton subsidy, the focus is on the US as it is the leading provider of subsidies – reportedly around $24 billion over the past decade – to its cotton farmers. There was also a WTO ruling that some of these subsidies are not legal.

‘Distracting attention'

Indian officials said the US – instead of reducing its ‘trade distorting' cotton subsidies – is now distracting attention by saying that the plight of African cotton farmers are not because of US subsidies but due to the policies of India and China.

The US has alleged that India and China have at times hiked their cotton production against market signals, and on other occasions contributed to the fall in cotton demand by increasing production of synthetic fibres and textiles.

Besides, India has also provided subsidies to its cotton farmers but has not informed the WTO on the exact amount of these subsidies.

All this, together with India's cotton export ceiling was causing volatility in international cotton prices, the US said.

But Indian officials said though India is a major cotton producer, it has a smaller share of the cotton export market compared with the US to cause price volatility.

The recent surge in global prices had more to do with floods in China and Pakistan than with any restrictive export policies on the part of India, they added.

The officials said even the decision to impose a 5.5 million bale cap on exports – with a view to cater to its huge domestic demand – was only a temporary measure. In fact, the cap has already been enhanced by one million bales.

Denying that the Government provides huge subsidies to its farmers, the officials said India would be notifying the WTO shortly on the exact amount of such subsidies.

> arun.s@thehindu.co.in

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