Quotes of the Day
It's not easy farming cotton in Africa. Just ask Bafing Diarra, 47, who owns slightly less than 25 acres near the village of Korokoro in Mali in West Africa. His headaches are endless: low- yielding seeds from Mali's government-controlled cotton company, boll weevils that this season resisted five applications of pesticides; capricious weather; a lack of equipment, which forces him to pick his cotton by hand in the scorching heat; even monkeys, which occasionally get into the fields and pry open the bolls to get at the sweet water trapped inside.
By far, the biggest problem Diarra faces, though, isn't environmental or even in Africa. It is 5,000 miles away: the $3 billion or more the U.S. pays its 25,000 cotton farmers in subsidies every year. Washington uses taxpayer money to guarantee American farmers a price—currently about 72¢ per lb.—whether it rains or bakes and no matter what happens on the world market. By contrast, in 2003, when Mali's cotton farmers earned 42¢ per lb., Diarra says he made a profit of $480, which he used to buy four cows and send his children to school. In a bad year such as this one, when Diarra expects to make just 32¢ per lb., he will lose money and fall further into debt with the government cotton company.
That sinking price makes a huge difference in West Africa, where more than 10 million people depend directly on cotton to pay for food, school fees and housing. The crop provides Burkina Faso and Mali with half of all their export earnings; in Benin it accounts for 75%. "If there is no cotton growing in Mali, Mali doesn't work," says Demba Kébé, an adviser to that country's Minister of Agriculture.
U.S. cotton farmers aren't the only ones feeding at the government welfare trough. According to the Environmental Working Group, a Washington lobby outfit, last year the U.S. doled out more than $12 billion in subsidies to its farmers on everything from corn to sugar to tobacco. The Europeans spew out subsidies, shelling out $53 billion. With cotton, as with other crops, all those subsidies distort global trade by encouraging U.S. farmers to produce more, which drags down world cotton prices and hurts farmers such as Diarra. "I don't blame the Americans, but I want them to allow me to make a profit," he says, sitting on a broken metal chair with his 3-year-old son Diakaridia wriggling on his lap. "I want to be able to take care of my family, to be able to feed them, to clothe them and to be independent of anybody."
The latest round of talks at the World Trade Organization (WTO) was supposed to make Diarra's modest wishes come true. Launched in 2001, the Doha "development" round is intended to thrash out new trade arrangements for agriculture, with a specific focus on reducing the rich world's subsidies and opening Western markets to the developing world's producers. In return, the vision goes, the developing world will allow more access to its service industries, such as insurance and banking.
Thus far, the talks have gone nowhere. Two years ago in Cancún, Mexico, they collapsed after developing countries refused to open the door to their service industries until they got a favorable deal on agriculture. Trade ministers will try again in Hong Kong in December. But the prospects aren't promising. The WTO boss, Pascal Lamy, said that he would have to delay a draft deal because "there is not a sufficient level of convergence."
The sticking point remains farming. The U.S. said last month that it would reduce its ceiling on trade-distorting support to its farmers by 60%. The European Union countered with an offer to cut import tariffs on agricultural products an average of 46%, though some goods would have smaller cuts. The offer is "Europe's bottom line," says the E.U.'s Trade Commissioner, Peter Mandelson, although France—whose farmers retain near mythic political clout—still may veto any agreement it doesn't like. Says Mike Johanns, U.S. Secretary of Agriculture: "It does appear to me that we will not make as much progress in Hong Kong as we had hoped for."
Even if there is an agreement, it may not be the breakthrough Africa is waiting for, say critics. Europe wants to exclude some products from its tariff cuts, and the U.S. proposal would effectively ease subsidies 2% by renaming existing supports or disguising them as other payments. "It's a case of smoke and mirrors," says Céline Charveriat, head of Oxfam's Make Trade Fair campaign. "If this offer goes ahead, trade-distorting domestic subsidies will remain almost completely unchanged."
In a world of perfect Ricardian economics, West African cotton growers would be thriving. That's because they can produce and trade high-quality cotton more cheaply than just about anyone—for about 31¢ per lb., compared with 68¢ per lb. in the U.S.
But the subsidies U.S. cotton farmers receive help destroy any advantage West Africa's farmers have. Since the mid-1990s, when U.S. exports of subsidized cotton began growing—according to Oxfam, U.S. sales went from a low of 17% of the world export market in 1998 to 41% in 2003—the world cotton price has dropped by more than half. The International Cotton Advisory Committee, which promotes cooperation among cotton-producing countries, estimates that developing-world cotton growers, including Burkina Faso, Brazil, India, Mali and Pakistan, have lost $23 billion over the past four years to Western subsidies. The irony, says Oxfam, is that annual losses in export earnings in most West African cotton-producing countries are comparable to U.S. aid donations. Burkina Faso, for instance, received $10 million in U.S. aid in 2002 but lost an estimated $13.7 million in exports because of U.S. cotton subsidies.
Developing nations are beginning to use the WTO to push back. Brazil, now the world's second biggest cotton exporter after the U.S., last year won a WTO ruling that Washington's cotton subsidies unfairly distorted world trade. A U.S. appeal was denied. And when Congress failed to act on U.S. Department of Agriculture proposals to fix the WTO problem by a September deadline, Brazil, exercising its right under WTO rules to "retaliate," announced that it would no longer honor patents and copyrights on U.S. movies, pharmaceuticals and other items. The U.S. warned Brazil to back off or face the wrath of Congress, but Brazil is seeking $1 billion in damages through the WTO. If the case enters the WTO arbitration process, the U.S. will make a counteroffer.
Despite the ruling, U.S. cotton growers argue that their cotton-support schemes fall within WTO limits. The Cotton Council of America, an industry group, says that blaming U.S. subsidies for low prices oversimplifies the world market and ignores other factors, such as increased production in Central Asia, thanks to political and economic stability, and use of new technologies. Efforts to blame U.S. cotton farmers for West Africa's woes "are misleading and misrepresent the forces at work in world fiber markets," says National Cotton Council (NCC) vice chairman Allen Helms Jr. The NCC says it is prepared to accept subsidy cuts only if other sectors also take a hit—and if the WTO examines support for man-made fibers. "We will oppose any agreement that singles out cotton for unfair, special treatment," Helms told a Senate committee.
West African governments, some of which backed the Brazilian case, say the debate has dragged on for so long that they not only want subsidies to be cut but also need compensation for export-earning losses. "Africans are in a situation that if they don't do anything, it's possible that the cotton sector will disappear," says ministerial adviser Kébé.
Beyond the trade haggling are real human consequences, best seen in elementary schools like the one in the town of Marka Coungo, a few miles from Bafing Diarra's farm. Ba Dienta, head of the school, estimates that enrollment varies as much as 25%, depending on the annual cotton price and the size of the harvest. When farmers make no money from cotton, Dienta says, his students concentrate poorly and fall asleep in class because they're hungry. "Everything is done on cotton money—marriage, debt, babies," he says. "When the price is low, it's a catastrophe."
Nouhoum Sissoko, 40, mayor of Marka Coungo and the biggest cotton producer in the district, says the pressure to accept lower prices every year is relentless. "The [Malian] government told us the low prices are because of the World Bank and the International Monetary Fund. Such partners are making pressure on government, and the government is putting pressure on us," he says, sitting in a thatched meeting room next to the mayor's office. Later, on a tour of his 54 acres planted in cotton, he laughs deeply when told of the subsidies and guarantees American cotton farmers enjoy. "I would like to go there," he says. "Life belongs to them."
U.S. cotton growers are correct in saying they are not alone in the subsidy sweepstakes. According to the Organization for Economic Cooperation and Development, rich nations spend more than $280 billion a year on agricultural "producer support." The U.S. is a piker compared with the European Union, which, when noncash payments and other aid are added in, spends more than three times as much coddling its farmers. World Bank chief economist Nicholas Stern estimates that a European cow receives $2.50 a day in subsidies, while 75% of Africans live on less than $2 a day.
European subsidies produce other weird anomalies. Europe is now the second largest sugar exporter in the world, from being a net importer 30 years ago. European sugar is made from sugar beets grown in such unlikely places as Finland, better known as a mobile-phone producer. That hurts poorer countries much better suited to producing sugar, such as Haiti, Mozambique and Thailand.
But cotton has become a symbol of the inequities of the current system. Mamadou Goïta, a Malian activist, calls cotton "a kind of school for us. It allows us to analyze the way things are going. If we see progress on cotton, we're hopeful that the developing world can convince the West that it needs to change the whole system. So far, we have seen not much."
Mayor Sissoko sees things more simply. Sitting with his bare feet brushing the dusty floor beside a battered pair of white flip-flops, he shakes his head at a description of an air-conditioned tractor common in the U.S. and Europe. "The farmers there don't sweat," he says. "We are sweating here."
- Simon Robinson | Korokoro
- The WTO tries, once again, to curb farm subsidies that distort global prices