KARACHI, May 20: More developing countries have lodged complaint with the World Trade Organization (WTO) against the subsidies being paid to cotton growers in the US and Europe.

Presently some 25,000 cotton growers in the US are receiving around $4 billion a year in subsidies, which give them cover and protection against their counterparts in developing countries.

According to the World Bank report, this has had a substantial influence on the world price for cotton, which has been hovering at all-time lows in the past two years.

In Pakistan, the government has miserably failed to let the market forces govern cotton prices as each year, besides fixing phutti (seed cotton) prices, the government has to direct state-owned Trading Corporation of Pakistan (TCP) to intervene as a third player in the market to safeguard the interest of growers.

As a result of this, the textile industry had been complaining about higher raw cotton prices than those in the world market and seeks assurances from the government of availability of raw material (cotton) at international rates to keep its products competitive.

However, the government in order to protect the interest of growers has to keep raw cotton prices at certain level and some time these prices move higher than those being quoted in the world market.

Recently, some African cotton producing countries have joined Brazil in their official complaint to the WTO about subsidies paid to their counterparts in the United States and Europe.

The World Bank has estimated that at least 10 million small-scale cotton growers in West and Central Africa are suffering dramatically from the plummeting prices.

Citing an example, the WB has pointed out that in a good year, in the village of Konseguila, southern Mali, small-scale farmers can earn about $1,000 a year by growing cotton. This is about three times the average annual income in this impoverished country in West Africa.

The cotton crop in many African countries play major role in their economies but when growers get little price for their produce the negative impact fall on all segments of the economy.

A restaurant owner in Mali, quoted by the WB says the cotton crisis is slicing into the bone of an already skeletal economy of Mali.

People rarely come to eat at food outlets as they have no money. Hunger is everywhere and the next harvest is several months away.

A grower who has been growing cotton for three decades says he has never suffered like this before. This year he lost and did not get back the money he put into his nine hectares of cotton, the seed, pesticide and fertilizer and that is not counting the back-breaking months of sweat and toil he and his family put into the fields they work entirely by hand.

Consequently, most of the cotton growers in Africa are not only now just poor — but also indebted. “Everything is linked to cotton here, we pay for everything with money that grows on the cotton vine — our clothing, building our homes, everything,” the World Bank quoted another grower.

“The problem is the world price, African cotton growers have no subsidies. But the developed countries, particularly the United States, subsidise their cotton producers so when the cotton price falls, they have no problem,” the WB quoted a Malian cotton grower.