Cotton: America Makes It, Africa Pays For It
By Rori Picker, Associate for Interfaith Relations, RFP-USA
The United States has dominated the global cotton market for nearly two centuries. Few things in the global market stay constant for so long, but America has worked hard to maintain its position. Every year, U.S. taxpayers spend tens of millions of dollars on research to improve the nation's cotton industry. The federal government also gives cotton farmers more than $1 billion a year in subsidies, which provide even more competitive advantage. There are university and government cotton research centers all over Texas and the South, all of which help U.S. cotton farmers compete in the global market. And it's working: U.S. cotton makes up 40 percent of world exports. No other country comes close.
And they are paying for it.
African governments have long complained that U.S. and European agricultural subsidies drive prices lower, making it difficult for African farmers to make a profit and nearly impossible to end Africa’s cycle of poverty.
A typical African cotton farmer will earn between $300 and $400 a year from his crop. Usually he will grow other food crops to feed his family, but cotton is often the only avenue to cash. Some estimates show that between 2001 and 2003, U.S. subsidies cost African cotton farmers about $400 million. Cutting cotton subsidies would raise prices 10-12 percent, costing an extra $30-$40 per year, an insignificant price for a Western farmer, but a momentous gain for his African counterpart.
Despite falling cotton prices, U.S. cotton production rose 40 percent between 1998 and 2001. This extra cotton is being dumped on the global market at below the cost of production.
Last year, the World Trade Organization upheld a ruling against the United States stating that American cotton subsidies are illegal. The United States has moved to eliminate export subsidies, but under the farm bill which expires in 2007, the vast majority of payments to U.S. growers continue.
America thrives in this new age of globalization, but we must remember that with a global economy comes a global partnership and a global responsibility. Elected officials may have decided that dominance in the cotton industry is worth the billions of dollars it costs taxpayers, but it it worth the hundreds of dollars it costs African farmers?
Source: NPR
The United States has dominated the global cotton market for nearly two centuries. Few things in the global market stay constant for so long, but America has worked hard to maintain its position. Every year, U.S. taxpayers spend tens of millions of dollars on research to improve the nation's cotton industry. The federal government also gives cotton farmers more than $1 billion a year in subsidies, which provide even more competitive advantage. There are university and government cotton research centers all over Texas and the South, all of which help U.S. cotton farmers compete in the global market. And it's working: U.S. cotton makes up 40 percent of world exports. No other country comes close.
And they are paying for it.
African governments have long complained that U.S. and European agricultural subsidies drive prices lower, making it difficult for African farmers to make a profit and nearly impossible to end Africa’s cycle of poverty.
A typical African cotton farmer will earn between $300 and $400 a year from his crop. Usually he will grow other food crops to feed his family, but cotton is often the only avenue to cash. Some estimates show that between 2001 and 2003, U.S. subsidies cost African cotton farmers about $400 million. Cutting cotton subsidies would raise prices 10-12 percent, costing an extra $30-$40 per year, an insignificant price for a Western farmer, but a momentous gain for his African counterpart.
Despite falling cotton prices, U.S. cotton production rose 40 percent between 1998 and 2001. This extra cotton is being dumped on the global market at below the cost of production.
Last year, the World Trade Organization upheld a ruling against the United States stating that American cotton subsidies are illegal. The United States has moved to eliminate export subsidies, but under the farm bill which expires in 2007, the vast majority of payments to U.S. growers continue.
America thrives in this new age of globalization, but we must remember that with a global economy comes a global partnership and a global responsibility. Elected officials may have decided that dominance in the cotton industry is worth the billions of dollars it costs taxpayers, but it it worth the hundreds of dollars it costs African farmers?
Source: NPR
posted by Rori @ 11:51 AM
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