Cotton

M.K. Horne

The ANNALS of the American Academy of Political and Social Science, 1960, vol. 331, issue 1, 64-69

Abstract: The United States government functions as the price leader for cotton in international trade, and as an inevi table consequence it plays the role of residual supplier on the world market. This means that United States exports of cotton fluctuate widely from season to season, while other exporting nations enjoy greater market stability. By supporting the world price level and by serving as the stabilizing factor in the world market, this country has provided a little-recognized source of strength to many weaker nations. Foreign cotton consumption passed its prewar peak in 1950-1951 and subse quently has continued to rise at an average rate of 1.5 million bales a year; but foreign production expanded even more rap idly through the season of 1955-1956, so that United States exports were threatening to disappear almost entirely. While this country cannot presently escape the role of residual sup plier, it can use its responsibility as price leader with reason able regard for the problems of foreign producers and of its own citizens as well. Since 1955-1956, an export subsidy has placed restraint on the upward trend of foreign production and has improved the outlook for United States exports. The cot ton farmer's opportunity to escape reliance on the export sub sidy lies in shifting the emphasis of production costs from la bor to constantly improving technology.

Date: 1960
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Persistent link: https://EconPapers.repec.org/RePEc:sae:anname:v:331:y:1960:i:1:p:64-69

DOI: 10.1177/000271626033100112

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