Mapping the Impact of Subsidies in Global Cotton Trade: A Review

In the complex journey from seed to shop floor, cotton goes through several stages. More than 70 countries produce and export cotton, while many developed and developing countries depend on imports of cotton lint for their spinning and textile industries. Global cotton consumption has regularly increased alongside cotton production and global population and is now estimated at 26 million tons. Cotton trade and production are highly distorted by policy support extended to cotton producers which has been greatest in the US, followed by China and the EU. It should be noted that while the cotton industry in all cotton producing countries benefit from indirect support provided to the agricultural sector, in general, between half and three quarters of the world cotton production receive direct support during most seasons. Support to the sector in India is expected to result in continuous growth in cotton mill use. The industry, however, faces several challenges, including technological obsolescence, high input costsand poor access to credit. To address these issues, the government has implemented several subsidy schemes and is currently developing a new textile policy for the overall development of the sector.