Burkina Faso Farmers Receive Little Money For Cotton
Burkina Faso Is a very small and very poor landlocked country in Africa, located just north of Ghana and the Ivory Caost. Cotton production is Burkina Faso's main economic mainstay. In most parts of Burkina Faso Cotton production is the only way to make a living for farmers and there families. Three years ago, farmers got 210 CFA (Communaute Financiere Africaine) per kilo of cotton, butin the year ahead, they expect to only get 165 CFA per kilo. This drop in price will be devistating for these already poor farmers and there families. Burkina Faso sees only one reason for lower cotton prices, namely in America's subsidies to its own cotton farmers. These subsidies have led to oversupply of cotton on the world market, and this extra supply is depressing prices for many Burkinabes. Farmers have long wanted the issue of US cotton subsidies to be higher on the agenda of global trade talks. But, with the talks failure over the last coupl of months , their hopes have been dashed. Many beleive that American subsidies will never evaporate.Burkina Faso leaders think that if the problem isn't fixed, people will have to steal to make a living, or just leave the country all together. Up to 310,000 families make their living from cotton in the West African country. If you factor in 15 about dependants for each family, about three million people rely on their income from cotton production.
The dropping cotton prices represent one side of a huge global debate on how to make the world's market more fair for some of the poorest people and countries. Many think that even if their US rivals were no longer receiving subsidies, African producers would still struggle to compete with producers elsewhere in the world.
posted by Anonymous @ 10/06/2006 09:43:00 PM
1 Comments:
Although cotton subsidies paid to a handful (2500) of American corporate cotton "farmers" in the US ($US 4-5 billion/annum) is causing substantial economic prejudices and financial loses to African cotton producing nations in sub-Saharan Africa (SSA) and is seriously threatening both the survival of the cotton sector and the livelihoods of millions of small-scale cotton farmers throughout SSA, simply eliminating US cotton subsidies will NOT revive the cotton sector and will fail to improve the economic and social welfare of cotton farmers in sub-Saharan Africa.
In fact, estimates by the International Cotton Advisory Committee (ICAC), using its World Textile Demand Model, clearly indicate that the elimination of American cotton subsidies would raise cotton prices by $US 11 cents per pound ($0,24 cents/kg).
However, any likely increase in the price of cotton resulting from an end to trade distorting cotton subsidies is:
1) Likely going to be pocketed by the numerous players along the supply chain (i.e. traders, ginners, exporters, government, etc) and is not likely to benefit the cotton farmers in terms of higher farm-gate seed cotton prices, thus failing to reduce poverty among the most vulnerable and affected economic agent within the local cotton supply chain - the African cotton farmer.
2) Any likely increase in the price of cotton lint resulting from an elimination of trade distorting cotton subsidies is inevitably going to be offset by the "invisible hand" of the market; an increase in the price of cotton lint is going to be followed by a corresponding increase in the supply of cotton, bringing back the price to its "equilibrium" level (i.e. demand=supply), thus offsetting the initial price increase resulting from the elimination of the cotton subsidies.
In this context, it seems evident that the solution to reviving the cotton sector in sub-Saharan Africa is to ADD-VALUE to the cotton by locally processing the cotton throughout the supply chain - from spinning yarn, weaving fabrics, dyeing & printing, designing to textile and garment manufacturing. Local value-addition of cotton will enable both cotton farmers and cotton producing nations in SSA break free from the vicious trap cycle of declining cotton prices resulting from trade distorting US/EU cotton subsidies and from the dictate of the world market. Furthermore, processing the cotton locally will create critically lacking investment, desperately needed employment and generate income, thus creating economic growth within the economy. Last but not least, it will provide decent and affordable clothing to the local inhabitants, made by Africans using local African (organic) cotton and manufactured using designs that reflect African cultures, traditions and pride - thus putting a definite end to the daily humiliation Africans have to wear in the form of used clothing - known as "Kifua" or dead white mens' clothing - dumped accross Africa (to add insult to injury!).
Arya.
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