Cotton – the hope of the third world

Africa is still at a disadvantage in global trade

Cotton is white gold, said the ancient Babylonians. And rightly so. 400 years ago, it brought wealth to their cities on the Tigris and Euphrates. They flourished with this plant, a member of the Malvaceae family, using the fibres surrounding its seeds as a key element in the civilisation of Mesopotamia, and for subsequent civilisations. There are many countries today that pin their hopes of development and prosperity on cotton growing.

This ancient plant is cultivated worldwide for its fibres, which are used for clothing everywhere. The main growing countries are China, the United States and India. The only major European producers today are Turkey (number eight in the world ranking) and Greece (number ten) – though the white fibres of the cotton boll once replaced those of the originally dominant textile plants such as hemp and linen from Europe.

The U.S. subsidizes cotton farming

Until 2003/2004, cotton was the most widely used textile fibre in the world, at more than 26 million tonnes. It has now been overtaken by the man-made fibre polyester, though the quantity of cotton grown in all five continents remains as high as before. It remains the most important source of income for many farmers, especially in the poorer countries, and a major export product for the state. For example, the farmers in West Africa grow cotton very economically, without use of pesticides – and get little thanks for their labours. Their crop accounts for only about 4% of global production. Africa’s farmers are afraid not only of droughts, but of a powerful opponent in the world markets – the United States.

There it costs three times as much to grow a kilogramme of cotton as it does in Burkina Faso; but the Africans have to work hard to sell their produce in the free market, while the Americans can rely on generous government support. 25,000 US cotton farmers receive about 4 billion dollars of subsidies from their government every year. They receive 230 dollars just for cultivating one acre of land (4047 sqm). This injection of funds enables them to export 70% of their crop at prices significantly below their own production costs.

There is evidently a contradiction there. The United States advocate private-sector initiative, and free development of business; every US government so far has also advised other countries to privatise and liberalise their economic structures and free them from government controls. And yet every US government so far has operated a policy of subsidising US cotton growers.

Unfair markets

That distorts competition in the cotton market. And the subsidies, as the free market shows, make products cheaper all the time; from 2001 to 2003 alone, they cost African countries about 400 million dollars of income. That is the amount lost to millions of farmers who grow their cotton on small plots of land, have no other source of income, and earn less than 400 dollars a year. 400 million dollars are an enormous amount of money for a farming society like this, and cannot be compensated by development aid from the USA. The American cotton subsidies are three times as much as the budget of the government aid organisation USAID for Africa.

The World Trade Organization (WTO) has now criticised this dumping policy, and called on the United States to stop subsidising their own cotton growers. There are some reforms in progress, but nothing decisive has happened so far. For many of the poor countries, cotton is still no more than a hope of better times to come.