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- Created by: JonathanHowse1
- Created on: 18-10-14 23:51
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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%
- Background
- 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
- Background
- Mali
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