The U.S. government began subsidizing U.S. cotton farmers in the twentieth century to allow them to stay in business. The purpose was to insulate them from fluctuating market prices that could bankrupt cotton farmers as a result of world market conditions beyond their control. The farm lobby has made sure that cotton remains a subsidized product, protecting to some extent cotton farmer income.

The cotton subsidies of the United States (and other developed countries) are alleged to be a major reason why cotton farmers in India are experiencing declining income and many are being forced out of farming. The world price of cotton has fallen by more than 33 percent since the mid-1990s. The Indians blame the United States and other developed countries’ subsidies for these lower prices. Thus, a program aimed at helping U.S. farmers is driving Indian farmers out of business.

Are the Indian farmers right to blame the cotton subsidies for their plight?