Maputo — Mozambique has praised the decision by the US Congress to scrap the export subsidies which the Bush administration had been granting to the US cotton industry, and which helped distort the international cotton market.

The director of international relations in the Ministry of Industry and Trade, Luis Sitoe, told AIM that these subsidies were responsible for the dumping of cotton at rock-bottom prices which was ruining producers in poor countries.

The subsidies made it impossible for African farmers to compete. Massive support from their government meant that the US producers did not have to worry about the costs of production: Sitoe described their costs as "fictitious".

But now the US government and Congress have had little choice but to remove the export subsidies - in March 2005 the World Trade Organisation (WTO) had ruled that these subsidies were illegal, and gave the US until the end of June to comply with the ruling. When that deadline ran out, Brazil filed a complaint with the WTO calling for trade sanctions against the US for its failure to respect the ruling.

That could have cost US companies a lot of money, and so the US did move to repeal the cotton export incentive programme - a subsidy to US exporters running at up to 600 million dollars a year. Sitoe thought that removing these subsidies would be of particular assistance to those countries of west Africa (such as Burkina Faso, Togo, Mali and Benin) that depend very heavily on cotton "This decision opens space for real competition on the international market", he said.

The west African nations, tired of American and European subsidies to their own producers, had demanded at the WTO Ministerial conference in Hong Kong in December, an end to export subsidies as from 1 January this year.

Data published during the Hong Kong conference showed that, from 1999 to 2003, about 25,000 US cotton producers received a total of 12.47 billion dollars in various subsidies - while African cotton farmers faced the greatest drop in their income since 1973.

Mozambique is not one of the major African cotton producers, but even so thousands of peasant families grow the crop, and suffer from the depressed prices caused by the American subsidies. The Mozambican Cotton Institute (IAM) puts Mozambique's average cotton production at 60,000 tonnes a year.

Sitoe was optimistic that there would now be a more level playing field in the international cotton market. But far from all subsidies have gone - just the export subsidies, generally regarded as the most pernicious form of support.

Sitoe pointed out that so-called "domestic support" for the American cotton producers continues, and goes on causing distortions in the market, weighting the dice against the interests of African farmers.