. /.   WORLD TRADE  
ORGANIZATION  TN/AG/SCC/GEN/5 
3 May 2006 
 (06-2146) 
Sub-Committee on Cotton Original:   Spanish 
  
 
SUB-COMMITTEE ON COTTON  
MEETING OF MONDAY  27 MARCH 2006 
 
Communication from Colombia
 
 
 
 The following communication, dated 26 April 2006,  is being circulated at the request of the 
delegation of Colombia.  
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 1. On behalf of my country, allow me to make  some very general observations on the cotton 
situation in Colombia, as well as some comment s on the document, "Proposed Modalities for Cotton 
under the Mandate of the Hong Kong Ministerial Decision", TN/AG/SCC/GEN/4 of 1 March 2006, 
presented by the co-sponsors of the Sectoral Initiative in Favour of Cotton. 
2. As has been noted in various studies, the suppor t developed countries grant to their producers 
is one of the main causes of trade distortions, w ith repercussions for international prices, most 
particularly in the case of cotton. 
3. In Colombia's case, this resulted in a fall in pr oduction that took the country from being a net 
exporter of cotton until 1993 to being an importer, d espite the fact that Colombia's productivity is on a 
par with world averages and even  those recorded by some of the world's largest producers. 
4. Between 1991 and 2004, producer prices for Colombian cotton fell by US$281 per tonne of 
seed cotton, i.e. a drop of 41 per cent.  However,  the period 1995-2004 registered the steepest fall in 
international prices, and hence in Colombian pr oducer prices, which fell from US$842 per tonne in 
1995 to US$411 in 2004, in other words a drop of US$431 per tonne and 51 per cent in this period. 
5. Owing to the high price-elasticity of cotton pr oduction in Colombia, the drop in prices was 
followed by a disproportionate fall in productio n.  Between 1991 and 2004, 195,902 hectares stopped 
being harvested, a reduction of 75 per cent in the area cultivated.  Similarly, between 1991 and 2004 
production fell by 277,000 tonnes for seed cotton and by 101,991 tonnes for cotton fibre, i.e. a reduction of 65 per cent.  During that last year, 154,763 tonnes of seed cotton were produced, yielding 
55,534 tonnes of fibre. 
6. Foregone net income from activities directly related to the cotton sector amounted to 
US$889 million in the period 1991-2004 and to bud getary outlays of US$33.4 million between 1997 
and 2004.  The first figure represents 9.9 per cent of the Colombian agricultural GDP for one year. 
7. Approximately 195,000 jobs were lost directly  or indirectly – 1.4 per cent of the national 
workforce in 2004.  Wage earners and day labourer s made up the social sectors hit hardest by the 
cotton crisis affecting the country from the beginning of the nineties, because of the large share of the 
expenditure on these sectors in the cost structure of cotton. TN/AG/SCC/GEN/5 
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  8. For the above reasons Mr Chairman, Colo mbia considers the proposals in document 
TN/AG/SCC/GEN/4 to be relevant, since they allow appropriate treatment for the cotton issue that is 
"ambitious, expeditious and specific"  with regard to the domestic support granted by the developed 
countries. 
9. In view of this, Colombia supports th e rapid phasing out of trade-distorting  domestic support 
by developed countries . 
10. Colombia would also like to draw attention to the fact that there are still no proposals on 
special and differential treatment concerning the domestic support for cotton that we developing 
countries give.  In the case of Colombia, this support is  intended to partially offset the fall in prices for 
domestic producers caused by distorting policies at international level, in order to guarantee a 
minimum basic income that enabl es them to compete and survive pending the results we hope to see 
from external reforms. 
11. As for the development-related programmes in the document in question it is proposed that 
"support to producers must not become price support, so  its amount must be determined in relation to 
the effects of subsidies on international market prices and take into account the phasing out of the 
support."  Colombia understands th at this premise applies only to those programmes financed by 
donors. 
12. Similarly, developing countries like Colomb ia that have price support programmes and 
domestic support in general, need plenty of leeway  so that their particular circumstances can be 
accommodated and their own support phased out gr adually pending the end of subsidies. 
 
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