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Mainland cotton farmers   have suffered since China's WTO entry   due to cheap  imports from the US, a report released yesterday by Oxfam International said.

The non-profit NGO, which works to alleviate poverty,  found through interviews with farmers this year in Gansu  and Xinjiang  that their livelihoods have worsened in the past few years, because they had to sell their cotton more cheaply to compete with imported cotton.

Phoenix Leung Pui-fung,  policy officer of Oxfam Hong Kong, said the US had violated World Trade Organisation rules by subsidising its farmers, thereby allowing them to sell their cotton for only 35 per cent of the cost.

Ms Leung was referring to a case brought by Brazil to the WTO appeals body earlier this year. That case has yet to be dealt with.

This has in turn  hurt sales among Chinese farmers. The Ministry of Agriculture projected that cotton production in China would decline  by 10 per cent this year.

Based on this figure, Oxfam estimated that Chinese farmers could lose 1.72 billion yuan and 720,000 job opportunities.

'Right now, we see that cotton farmers need help,' said Chong Chan-yau,  executive director of Oxfam Hong Kong. 'Their livelihoods are being attacked.'

Speaking ahead of the WTO ministerial conference in Hong Kong next week, Mr Chong said the member countries were unlikely to reach an agreement during the meeting that could benefit developing nations.

'The developing countries are being given a raw deal in so far as  what the  European Union and US are offering. The choice is between no agreement and a bad agreement; our advice is no deal is better than a bad deal.'

Mr Chong said that in order to solve the problem in the long run, the Chinese government  had to give farmers more resources and subsidies, in compliance with the WTO framework.

China is the largest consumer and producer of cotton. Before 1998, the cotton trade was a tightly regulated industry whose prices were set by the government. Since then, the authorities have started allowing privately owned companies to process cotton.

With its WTO entry  in 2001, China started importing cotton from countries  such as the US and Brazil at a low tax rate,  sending cotton prices into a decline.

Oxfam found through the interviews with farmers that some of them could not afford to eat meat or eggs during that time.



Cotton farmers hit by imports: Oxfam