The Environmental Working Group (EWG) has calculated that between 1995 and 2011, US Farm Bills have given subsidies worth more than $32 billion to cotton farmers. These subsidies give U.S. farmers an incentive to produce excess cotton crops, which then flood the market and cause the world price of the cotton to fall. This then reduces the price poorer farmers in developing countries can sell their crops for.
Poor farmers in developing countries are hit extraordinarily hard because they do not receive similar government support and therefore, cannot compete with US cotton. The reduced income of poor farmers mitigates the rise of their living standards and contributes to longer term poverty, slower economic development, and an increased incentive to use child labor.
A study by Oxfam revealed that the elimination of cotton subsidies “could substantially improve the welfare of over one million West African households—10 million people—by increasing their incomes from cotton by 8 to 20 percent.”
The same study also revealed that such an increase in income would be enough to feed up to two additional children or send up to ten additional children to school for an entire year.
The World Trade Organization (WTO) has declared American cotton subsidies illegal under international trade rules and has called for their immediate removal. Despite this and the fact that NGOs such as Oxfam and the EWG have been working to end agricultural subsidies, reform of the US Farm Bill has failed and billions of dollars in crop subsidies continue to be provided to farmers in the US.
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