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  • Role of trade and investment in the development gap - Cotton
    • Mali
      • Background
        • 10 million small-scale cotton growers suffering from falling prices
        • Small scale farmers can earn up to $1000/year
        • 3 million Malians rely on cotton to survive
        • 2001 US aid = $37.7 m
        • 2001 = Mali lost $343 million due to American subsidises
        • = 6% of GDP
      • Impacts of cotton
        • Breathing problems due to cotton fibres
        • Farming cotton gives a farmer 3x the average annual income
        • Plans to privatise the cotton industry
        • 4% of population driven into poverty
      • Link to the development gap
        • Subsidies lead to overproduction of cotton = forces cotton prices down = Mali cotton farmers earn less =decline in living standards
        • If cotton subsidies to USA farmers were scrapped prices would have risen for African farmers by 3.5%
    • USA
      • Background
        • Up to 20% of cotton farmer’s income comes from subsidies
        • USA spends 3x as much on subsidies for cotton then it does on aid forwhole of Africa
        • The US is the second largest cotton producer
        • US currently accounts for more than 50% of the worlds exported cotton.
        • 25,000 cotton producers receive $4 billion/year in subsidies
      • Impacts of cotton
        • Large scale production e.g. 1 16,000 acre farm makes enough cotton for 200,000 t-shirts
        • The slack in world production of clothing has been taken up by China and Pakistan
        • In countries that subsidise their farming, only 5% of the population are farmers
      • Link tte the development gap
        • Reduced cotton prices by 15%
        • Law passed banning export subsidies on cotton
        • WTO ruled in March 2007 that cotton subsidies were unfair


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