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July 19, 2006

US cotton farmers see the effects of American subsidies on Africa

A poor man's field may produce abundant food, but injustice sweeps it away."
(Prov 13:23)

A while ago, I wrote about the US cotton subsidies, how they depress world prices and harm the economy of poor cotton-producing countries such as Burkina Faso. Burkina loses more money through the effect of US cotton subsidies than it receives through US aid. These subsidies have been declared illegal by the WTO.

Then, to the hope of millions, the US announced it was scrapping its cotton subsidies.

US farmers see the reality for themselves
But it seems there is still a problem. US cotton farmers have recently visited Burkina's neighbour, Mali, and said themselves that US cotton subsidies are hurting Africans and "worsening hardship in the world's poorest region". In 2004-05, $4.2 billion in government subsidies was given to just 25 000 US cotton producers, affecting between 15 and 20 million people in Africa who depend on the crop.

In addition, a paper produced by TCS observes: "The vast majority of these and other commodity subsidies go to the largest and most profitable farm operations. ... one farm in Arkansas received $23 million in cotton subsidies between fiscal years 1996 and 2001."

The situation as it stands
So what happened to that "scrapping" of the subsidies?

Well, in fact, Congress only agreed to scrap one part of the subsidies (the the Step 2 cotton export subsidy program if you are interested), and that only comes into effect as from next month. Oxfam does a good analysis of that decision here.

It was a good start, but leaves $3.2 billion in annual cotton subsidies and $1.6 billion in export credits untouched - all equally illegal and unjust.

West Africa have seen a 14% increase in their cotton yields, but the absence of an equitable price, caused by the western subsidies, meant a 31% loss in the income they received from it. While the price of imports such as oil are rising, the price Burkina can receive for its key export is falling due to western subsidies. So we keep Burkina poor by our unjust trade rules, and then appease our consciences by giving a few million in aid.

International deliberations
Ahead of the WTO, the leaders of Burkina Faso, Mali, Chad and Benin have been continuing their fight for the elimination of cotton subsidies worldwide. President Blaise Compaore of Burkina Faso spoke to the Trade Negotiating Committee of the WTO in June, and, with the president of Mali, has written a letter to the New York Times condemning the subsidies.

One year after the climax of the Make Poverty History campaign at the G8 summit in Edinburgh, the EU and US are still arguing over who needs to make more cuts to their subsidies and tariffs. The Middle East crisis then inevitably kicked concern for Africa onto the sidelines. Yesterday, there was more hope as trade ministers have been sent to meet at the WTO with a principle of "more flexibility" in the aim of resolving the issues of trade subsidies and tariffs.

Parallel to the G8 summit in Russia, there is another summit in Gao in Mali, trying to bring attention to the region's issues. With immigration from Africa to Europe a major concern for the "rich nations", the gathering in Mali observes that "working to improve the standard of living in sub-Saharan Africa is the only way to stem the tide of immigration".

Justice and common sense
The obvious injustice of the vast discrepency of wealth between the rich and poor world is also a cause for international social disruption - whether that be immigration or terrorism.

Justice in trade rules for the poor, giving a fair income for their work, is not only right on its own merit, but is beneficial to all. It gives dignity to people, allowing them to work to improve their lives rather than being so dependant on aid. And it takes away one of the main incentives to the international social unrest that so threatens our world today.

Please pray and campaign for trade justice for the poor:
UK:
Tear Fund
US: ONE

A good paper by Oxfam on the cotton issue is available here.

Tags: burkina faso africa burkina aid trade wto cotton justice poverty g8 subsidies farming agriculture

Posted by Keith at July 19, 2006 07:58 AM

Comments

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