Policy Recommendations

  • Complete decoupling of EU subsidies to cotton farmers.
  • Within the WTO's Doha Round, European Union and African leaders should urge the United States to start reducing their subsidies.

Case: Cotton

24-01-2011 The Commission must decouple cotton subsidies, according to MEP Michel

The debate about the reform of the Common Agricultural Policy (CAP), which is due in 2013, has started in Brussels. MEP Louis Michel (ALDE) urges the Commission to include the cotton subsidies in the reform. In West-Africa 15 million people are directly dependent on cotton production. Today cotton has only been decoupled for 65%, which means that 35% of the subsidies are calculated based on production. Most other agricultural products have been decoupled for 90%. The subsidies for European cotton farmers are causing  market distorting effects, which are negatively affecting the African cotton farmers.

Cotton has also been heavily debated during the Doha round in the World Trade Organisation (WTO), in which the Commission negotiated on behalf of the EU. The failure to reach an agreement on cotton, caused the deadlock of the entire Doha round. Michel is wondering why the Commission does not changes its position on cotton and include it in the CAP reform. This would increase the chance for a successful conclusion of Doha, and moreover increase the coherence between the agriculture, trade and development policy of the EU, according to Michel.

Fair Politics fully agrees with Michel that cotton subsidies must be decoupled. By not including cotton in the CAP reform, the Commission misses an opportunity to prove that the EU is favouring honest market competition, instead of causing market distortion. Although the EUs market share worldwide is small, the subsidies are negatively influencing the West-African cotton producing countries because of strong historical ties between the EU and these countries. MEP Michel already pointed to the incoherent situation caused by the subsidies. The Commission must act, since the EU has a legal obligation for Policy Coherence for Development (PCD) under article 21of the treaty of Lisbon, which states that: The Union shall ensure consistency between the different areas of its external action and between these and its other policies. Moreover, article 208 states that the objective of the European development policy is the eradication of poverty and The Union shall take account of the objectives of development cooperation in the policies that it implements which are likely to affect developing countries.

For concerns raised on cotton subsidies, MEP Louis Michel (ALDE) is recognised as Fair Politician. He earns one point in our monitoring system.

Monitor fair: ALDE

Parliamentary questions
P-011310/2010
10 January 2011
WRITTEN QUESTION, by Louis Michel (ALDE) 

Subject: Cotton in the WTO
The Commission is to determine the guiding principles of the reform of the EU's Common Agricultural Policy (CAP), which is due in 2013. The goal is to make agriculture a more dynamic and more competitive sector, better able to meet the objectives of the Europe 2020 strategy.
The Commission is not planning to include cotton in the 2013 CAP reform, amongst other reasons because of the legal guarantee included in the treaties of accession for Greece and Spain.
Cotton plays an essential role for the economic development of western and central African countries. More than 15 million people directly depend on cotton production in the region. African cotton farmers are not asking for preferential treatment or special, different treatment; they are demanding the application of WTO principles. The countries concerned submitted a Sectoral Initiative in favour of Cotton to the WTO in 2003, requesting the abolition of distorting measures supporting cotton production and export, with the aim of combating poverty whilst recognising the strategic importance of cotton for their development. The countries of western and central Africa are asking the EU to increase the rate of the decoupling payment applying to internal support for cotton from 65 % to 100 %.
The Commission, acting on behalf of the EU under its mandate to negotiate multilateral trade agreements, regularly speaks in favour of a positive conclusion of the Doha round of talks. In Hong Kong in 2005, the EU and all WTO members committed themselves to treat the cotton issue ambitiously, expeditiously and specifically.
In the Commissions view, how is it possible for the EU to fulfil the Hong Kong commitment whilst maintaining the rate of the decoupling payment at 65 %, when the average rate for other European agricultural products is 90 %?
In view of the privileged relations between the EU and ACP countries, what measures would the Commission be prepared to take in order to ensure greater coherence between its agricultural policy, its trade policy and its