Oxfam said that the U.S. is still paying billions of dollars of such subsidies to its cotton farmers, despite having lost a WTO case against Brazil in 2005, with no encouraging signs of reform coming from the U.S. Congress. There is little time for the U.S. Congress to make more meaningful reforms to agricultural subsidies in order to comply with international trade rules before facing possible retaliation from Brazil.

"This ruling reinforces the need for reductions in U.S. cotton subsidies in both the context of the Doha Round and the 2007 Farm Bill," said Isabel Mazzei, head of the Geneva office of Oxfam International. "The U.S. cannot continue to ignore the WTO and the effects of cotton subsidies on global markets and, ultimately, the livelihoods of poor farmers in the developing world."

In 2005, the WTO ruled that U.S. cotton subsidies violate WTO rules and gave the U.S. until September 2005 to reduce them. In response, the USDA agreed to reform export credit programs to comply with the ruling, and Congress eliminated the Step 2 cotton export subsidy program in 2006. But these programs represent only 10% of the overall cotton subsidy programs and some of the most trade distorting programs, like the counter cyclical payments were left untouched. In September 2006, Brazil asked for a WTO “compliance panel” to determine whether the US has done enough to comply with the ruling. Today, the WTO has confirmed that the U.S. has failed to reform its agricultural subsidies enough to comply.

“Not only did the House of Representatives completely ignore the WTO ruling in passing its version of the 2007 Farm Bill, but it elected to take the brazen step of reinstating subsidies for cotton that were eliminated by the previous Congress, parsing the language to try to slide the subsidy under the WTO screen," said Raymond C. Offenheiser, president of Oxfam America. "Indeed, the cotton lobby, representing about 20,000 mostly large producers, has continued to fare well at the expense of the American taxpayer and family farmers both here and in Africa.”

According to a recent study conducted by Dan Sumner and others at the University of California Davis for Oxfam, reforming U.S. cotton subsidies would increase world cotton prices by 6-14%, resulting in additional income that could feed an additional million children for a year or pay school fees for at least two million children living in extremely poor West African cotton growing households. A typical cotton-producing household in West Africa has about 10 family members, an average life expectancy of about 48 years and an adult literacy rate of less than 25 percent. Cotton is often the only source of cash income for these families who live on less than $1 a day per person.

"The House-passed Farm Bill will not pass muster with the WTO," said Offenheiser. "If the U.S. is unwilling to live up to its international trade commitments, how can it expect other nations to comply with the same rules? It is now up to the Senate to rally the political will to finally align our agricultural programs with these international rules."

In the ongoing lawsuit, Novartis is challenging India’s patent law in an attempt to protect its own profits. Although the case revolves around a patent application for leukemia drug Glivec, it has potential ramifications for millions of poor people worldwide, according to Oxfam. If Novartis is successful, the entire Indian generic drug industry, which is by far the biggest provider of affordable medicines for poor people, will be threatened.

“Oxfam believes that Novartis is misinforming the public as it defends its decision to pursue legal action against India,” said Jeremy Hobbs, Executive Director of Oxfam International, in a letter to Novartis. “We are not – and have never been – opposed to Novartis’ donations program, but such program can never hope to supply free medicines to all patients, for all diseases, throughout their lives.”

Over a thousand e-mails from doctors, cancer patients and patients’ relatives in support of the corporation’s Glivec donation program were sent to Oxfam via the Max Foundation, in what Oxfam believes is an attempt to deflect attention away from the wider implications of a Novartis victory in this case.

“Novartis and its colleagues in the pharmaceutical industry should respect countries’ rights to take measures that balance the protection of innovation and the promotion of public health,” said US Representative Henry A. Waxman, Chairman of the Committee on Oversight and Government Reform, in a letter to the Novartis urging the company to reconsider its position on the case. “India’s robust generics market supplies affordable, essential drugs both to its citizens and to poor nations around the world. If India is pressured to make its patent laws more stringent than its obligations under international trade law, this crucial supply of medicines could be threatened.”

The Doha Declaration in 2001 recognized the right of all World Trade Organization members to use such legal flexibilities without fear of challenge. India denied Novartis a patent for Glivec on these grounds, but instead of appealing only that decision, the company has gone much further and challenged the very constitutionality of the Indian law. If successful, Novartis’ actions could lead to a collapse of India’s entire generic drugs industry. Today’s hearing goes to the heart of the debate around universal access to medicine: if Novartis wins its case, access to all of these vital affordable medicines for AIDS and other diseases will be jeopardized.

“If Novartis wins this case, countless medicines previously available cheaply to poor people will be patented and priced out of reach,” said Hobbs. “The medicine cabinet will be firmly locked, and only companies like Novartis will hold the keys.”

The hard-hitting ads set up a direct contrast between the millionaire farmers that benefit most from the Farm Bill, versus small family farmers who are left out in the cold.

“The ball is clearly in the Senate’s court now and they need make the Farm Bill fair,” said Liam Brody, Farm Bill Campaign Director at Oxfam America, which paid for the campaign. “Our campaign asks Senators to stop handouts to millionaires who need it least, and instead help family farms that need it most.”

According to the Environmental Working Group (EWG), which also endorsed the ad campaign, 67% of all farmers and ranchers do not collect government subsidy payments in United States. Among subsidy recipients, 10% collected 73% of all subsidies, amounting to $120.5 billion over 11 years.

"The billions of dollars in payments to profitable big farm operations leave only table scraps for small family farmers. Partly financed by federal subsidies, these large operations now have the capitol to outbid smaller farmers for land,” said Ken Cook, President of EWG. “Large farms grow larger, and rural America dries up in the process. Is this government subsidized consolidation in the agriculture sector in the best interest of American taxpayers?"

The first wave of the ad campaign was launched with TV buys in New Hampshire and Minnesota today and print ads in several Washington, DC publications, including The Hill and Congress Daily last week. In both Minnesota and New Hampshire, the Farm Bill is becoming a hot-button political issue, with decisions made by voters having national implications in Senate and Presidential elections.

“The Senate now faces a real test of moral leadership in changing unjust policy that bolsters millionaires at the expense of struggling family farms and people living in poverty at home and abroad,” said Rev. Jim Wallis, Editor and Executive Director of Sojourners/Call to Renewal. “This ad campaign strives to let them know we’re watching.”

“Our members agree that the current commodities programs exacerbate land consolidation and the deterioration of our natural resources, encourage overproduction and create a structure of agriculture that has benefited few, while leaving most producers working harder for less,” said Land Stewardship Project Policy Organizer Adam Warthesen. “Taxpayer dollars would better be used for conservation programs that encourage farmers to be better stewards of the land.”

This farm bill stinks of rotten programs and taxpayer waste," said Ryan Alexander, President of Taxpayers for Common Sense. "We have joined in this effort to make sure Senators know that they need to clean up farm programs, making them market oriented, less costly and trade compliant."

The campaign was endorsed by Oxfam America, Church World Service, Citizens Against Government Waste, Environmental Working Group, Land Stewardship Project, Progressive National Baptist Convention, National Catholic Rural Life Conference, NETWORK, Sojourners/Call to Renewal, and Taxpayers for Common Sense.

Read more about Oxfam America's work to reform the 2007 Farm Bill.

The decision will protect India's special role as the world's leading provider of affordable medicines to the poor. The agencies welcome Novartis's response today that it is unlikely to appeal the ruling.

Novartis had challenged a law that allows India to refuse a patent for an existing medicine when it had been modified only slightly. The agencies said the case was a direct attack against India's right to protect public health.

Novartis and the pharmaceutical industry have been given a clear message to respect developing countries' legal right to use the World Trade Organization TRIPS (trade-related intellectual property) safeguards to strike the right balance between protecting public health and intellectual property, the agencies said.

India—known as the 'pharmacy of the developing world' due to its massive generic drug production industry—supplies most of the world's affordable generics to developing countries where patented medicines are priced out of most people's reach. More than two-thirds of generic medicines exported from India are sold in developing countries at a fraction of the cost of patented brand medicines.

Novartis's legal challenge posed an enormous threat in developing countries to millions of people suffering from cancer, HIV and AIDS, diabetes and other diseases who are too poor to pay for expensive patented medicines.

Sandhya Venkateswaran, Head of Advocacy for CARE International in India said: "This ruling is a lifeline for the millions of people who cannot afford brand-name drugs, and ensures that essential medicines from India will reach those who rely on them. CARE and other agencies can breathe easily now and continue to deliver treatment programs.

"More than 5 million people with HIV around the world still cannot afford anti-retroviral medicine, but this ruling reduces the number of people for whom HIV is a virtual death sentence. CARE has been able to buy more than twice the amount of anti-retrovirals to treat the HIV and AIDS patients we work with in Peru, thanks to the generic industry in India."

A global campaign by civil society has seen nearly half a million people around the world campaigning against Novartis to drop its case.

Celine Charveriat, head of Oxfam's Make Trade Fair campaign said: "This ruling is a vindication for India and a victory for campaigners. Developing countries should not be bullied by pharmaceutical companies and forced into having to defend themselves in court for correctly using the safeguards available to them to protect public health."

Linda Hartke, coordinator of the Ecumenical Advocacy Alliance, which mobilized church leaders to campaign against Novartis’ case in India, said, “This is a victory for all those who believe people, not profits, must come first in public health.”

CARE, Oxfam, and the EAA call on Novartis to continue to take positive steps to promote access to medicines in developing countries, to promote research and development for neglected diseases and to strike an appropriate balance between protecting public health safeguards in developing countries and intellectual property rights.

G8 countries are "running to stand still" said Max Lawson, Senior Policy Advisor at Oxfam, as last minute talks between officials ended inconclusively, with some countries reluctant even to reiterate past aid promises on the eve of the summit.

Lawson: "G8 officials have today been involved in feverish negotiation over the final texts but have failed to agree. Italy, Canada and Japan are leading the scramble for reverse gear, refusing even to reiterate promises to increase aid that they made in 2005 - mainly because they have been busy breaking those promises ever since."

"The extra aid that was promised at the G8 summit in Gleneagles two years ago could put millions of kids into school, employ nurses, doctors and teachers, buy medicines for people with AIDS—literally save lives. But collectively, the G8 looks set to fall short of their pledge by a massive $30bn. If they do not get back on track, 5 million extra people will die by 2010. This is about a lot more than numbers on a piece of paper."

Climate change is the other issue that remains controversial ahead of the official summit start on Wednesday, with Germany pushing for consensus on a global stabilization target and proposals for multilateral negotiations on a post-2012 framework. The first phase of the Kyoto protocol runs from 2008-2012.

Lawson: "Over the last few days we have seen a plethora of new initiatives on climate change, led by former leading naysayers, but we don't need a new process or approach. There is already a process in place at the UN that countries should follow, and the G8 should support, so that they can come up with a global solution to global problem.

"We are already seeing poor people in developing countries suffering the effects of climate change. They can't wait for the results of a beauty parade of different country initiatives. They need the G8 to provide money now to help them adapt to climate change, while at the same time agreeing on measures to cut emissions and limit global warming to as far below 2 degrees as possible."

Also over the weekend, violent protests attracted the attention of G8 watchers and the media. Peaceful campaigning was overshadowed by violence and injury.

Lawson: "This summit must not be remembered for broken promises and burning cars. There is huge potential here and a huge chance for the world richest and most powerful countries to live up to their responsibility to support development and poverty reduction in the developing world. Failure to act on this would be unforgivable."

In a new report released today, entitled “Pricing Farmers out of Cotton: The Costs of World Bank Reforms in Mali,” Oxfam analyzed how efforts to privatize the Malian cotton sector, including the adoption of a new price-setting mechanism, could leave struggling farmers worse off. The situation in Mali is an example of how the burden of low cotton prices is borne by farmers in Africa while farmers in rich countries are insulated, according to Oxfam.

“Mali’s three million cotton farmers have been squeezed by American cotton subsidies and now they have to worry about World Bank privatization policies too,” said Celine Charveriat, head of Oxfam’s Make Trade Fair campaign. “Instead of improving the livelihoods of cotton farmers, a new price-setting mechanism could destabilize cotton as a source of income for millions of farmers and increase poverty rates by five percent.”

Mali is one of the world’s poorest countries, with over two-thirds of the population, mostly in rural areas, living on less than a dollar a day. Mali is also the second largest cotton producer in sub-Saharan Africa after Burkina Faso. Whereas the impacts of low and volatile prices are now shared to some degree by many stakeholders in the Malian cotton sector, the new pricing mechanism will actually push the burden of price risk on to the farmers, according to the agency.

“Transferring the risks of a highly volatile world market down to the bottom of the chain exacerbates poverty,” continued Charveriat. “A new mechanism, like a price stabilization fund could help farmers and other stakeholders manage the price risks inherent in producing raw commodities for the export market, positively affecting food security, rural development, health and education.”

Oxfam called on the wider donor community, especially the World Bank and IMF, to kick-start a support fund to insulate farmers better and ensure that the risk is shared amongst the various stakeholders. A support fund which functions as a price stabilization mechanism can be very successful in helping farmers to manage risk as long as it is well designed and producer- managed, as evidenced in Burkina Faso. In the event of several years of low prices, the producer price and the fund will adjust accordingly, compelling cotton farmers to plant based off of market signals.

Cotton farmers in Africa have yet to benefit from international trade negotiations at the WTO and are still bearing the brunt of American subsidies and dumping. New analysis by University of California at Davis economist Daniel Sumner highlighted in the Brazilian submission to the WTO Compliance Panel shows the link between American commodity subsidies and overproduction of cotton. Between 2000 and 2005, according to Sumner, American cotton producers would have lost $663 per planted acre, or almost $10 billion in aggregate, if they would not have had payments from marketing loan and counter-cyclical payments. Instead of losses, subsidies provided American cotton farmers with profits of $127 per acre on average, or $1.44 billion in aggregate.

“If US cotton farmers had to farm for the market, they would have reduced cotton production rather than racking up collective losses of more than $12 billion over market revenue,” continued Charveriat. “Reforming the US Farm Bill offers the possibility of reducing export dumping which is so damaging to farmers in developing countries, but it is up to the US Congress to deliver.”

Against this backdrop, it is also crucial that core development issues, such as cotton, are not sidelined in the current WTO negotiations. A deal that will rush into rules that do not allow for development, and that instead consolidate and exacerbate inequalities both between and within countries would be a missed opportunity, considering the grand promises made 5 years ago.

The Thai government?s plan is seen as an attempt to upgrade Thailand from the Priority Watch List to a better trade status with the US who has downgraded the country for the last two years. The US cited copyright violations of American computer software, movie and music products, pharmaceuticals and other copyrighted materials. It specifically mentioned Thailand?s issuance of compulsory licenses, since November 2006, for patented medicines to treat HIV/AIDS, heart disease and cancer.

?The Thai government must safeguard its people first by offering copyright protection improvements in other areas which will not affect life and well-being of the poor,? said Yowalak Thiarachow, Oxfam?s Thailand Country Director.

Compulsory licensing is perfectly legal under the World Trade Organizations? rules and national law, and has been carried out in many countries. The WTO?s intellectual property agreement provides all countries the right to override patent protection to introduce affordable, generic versions of medicines that help protect public health.

?Any pledges undermining access to affordable medicines including a decision to stop the compulsory licensing policy will block poor people?s access to life-saving medicines that can be made affordable in the future,? said Ms Yowalak.

As the government wavers whether or not to overturn a decision to make HIV and AIDS, heart disease and cancer medicines more affordable to its poorest communities, Oxfam calls on the Thai delegation not to bend to US pressure.

?If there was a time for the Thai government to show political courage, it is now. Even in the face of immense pressure by the US government and the multinational pharmaceutical industry, Thailand?s decision to abandon its compulsory licensing program would be inexcusable,? said Ms Yowalak.

Oxfam policy advisor Rohit Malpani said in Washington that it makes little sense for the Thai government to change course since the country has successfully resisted multinational pharmaceutical industry and US pressure.

?We?ve also seen some positive movement from the US, with Congress making some important changes on the access to medicines front in the free trade agreements with Panama, Peru and Colombia to ensure that US trade policy does not merely favor the narrow interests of the multinational pharmaceutical industry,? said Malpani.