ISLAMABAD, Sept 12: On the complaint of the four African cotton producers, Mali, Chad, Benin, Burkina Faso, which submitted a proposal for elimination of cotton subsidy and other support, the WTO director general has placed the issue on the agenda of Cancun ministerial conference for seeking a solution to the problem, sources said on Friday.

The proposal has so far received support from Canada, Australia, Argentina, Cameroon, Guinea, South Africa, Bangladesh, Senegal and India.

According to the sources, Pakistan has also supported the move of phasing out of subsidy on the cotton production by the developed countries because its exports of textile products is mostly dependent on the domestic production of cotton, which constituted major portion of country’s exports.

Well-placed sources told Dawn on Friday that Pakistan could not export its almost 0.2 million bales of cotton last year because subsidized cotton from developed countries forced the prices of the commodity down in the international markets.

The proposal recommended that by the end of 2006, the cotton subsidies will have to be completely eliminated by the developed countries and the free market for international trade in cotton be restored.

It was also proposed that some transitional measures in shape of financial compensation for cotton producing developing countries including least developed countries should be worked out to offset their loss of revenue, until support for cotton production has been completely phased out.

They described their proposal as a solution that would allow them to participate more in the international trading system and to use trade in order to get themselves out of poverty.

According to the sources, it was expected that the WTO member countries would be able to seek a solution to help the cotton producing countries to make their cotton more competitive.

According to the United States Department of Agriculture 2001 report, which ranked Pakistan at fourth position in production of cotton in the world, said the country would need more market access for its surplus cotton production. Pakistan’s competitors in cotton production in the developing countries are India, Turkey and Brazil.

Pakistan accounts for 8.7 per cent of global cotton production. Pakistan’s total cotton yield rates were twice that of India. The area of cultivation in 2000-01 was 2,560,000 acres and the total cotton production was 9700,000 bales.

According to the sources, due to heavy subsidy provided to farmers in the US and EU, Pakistan could not export its surplus cotton there.

Subsidies granted by countries like the US and member states of the European Union, particularly Spain and Greece

in 2001-2002, to their cotton farmers reached $6 billion, which was equivalent to the value of world cotton exports this year.

Cotton production for Greece was estimated at 300,000 tons and 900,000 tons for Spain.

This entire production was consumed within the European Community.