News
Government Support to Cotton Sector Up 33% to $5.9 Billion in 2017/18
Executive
Summary
The ICAC’s
new, free report on production and trade subsidies in cotton shows:
- Government support for domestic cotton
industries is rising rapidly
- Ten nations provided subsidies that
averaged 18 cents per pound in 2017/18
- The 2017/18 season breaks the long-term trend
of subsidies decreasing when prices are strong
- The report is available in English, French
and Spanish
Subsidies to the cotton sector — including direct support to
production, border protection, crop insurance subsidies, and minimum support
price mechanisms — took a major jump in the 2017/18 season. At $5.9 billion, it
reflects an increase of 33% over the 2016/17 total of $4.4 billion.
Those are the findings in the 2018 ‘Production and Trade Subsidies Affecting
the Cotton Industry’ report just released by the International Cotton Advisory
Committee (ICAC). In all, 10 countries provided subsidies to their domestic
cotton industries with an average value of 18 cents per pound, up from 17 cents
per pound the year before.
One data point
that has reversed long-term trends is the correlation between prices and the
amounts of subsidies provided by governments. Since the Secretariat began
tracking government support in cotton in 1997/98, trends have shown that
subsidies decline when prices are high and increase when prices are low. When cotton
prices increased from 70 cents per pound in 2015/16 to 83 cents per pound in
2016/17, subsidies decreased. When prices jumped again to 88 cents per pound in
2017/18, however, subsidies continued to increase.
The
share of world cotton production receiving direct government assistance —
including direct payments and border protection — increased from an average of
55% between 1997/98 and 2007/08, to an estimated 83% in 2008/09. From 2009/10
through 2013/14, this share declined and averaged 48%.
In
2014/15 and 2015/16, the average percentage of production receiving direct
assistance increased to 75%. That number then declined to 47% in 2016/17 and
2017/18.
To view the 2018
‘Production and Trade Subsidies Affecting the Cotton Industry’ report, please
click:
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About the International Cotton Advisory Committee
(ICAC)
Formed in 1939, the ICAC is an association of cotton producing, consuming and trading countries. It acts as a catalyst for change by helping member countries maintain a healthy world cotton economy; provides transparency to the world cotton market by serving as a clearinghouse for technical information on cotton production; and serves as a forum for discussing cotton issues of international significance. The ICAC does not have a role in setting market prices or in intervening in market mechanisms. For more information, please visit www.icac.org.