Cotton
All over the world, in countries both rich and poor, farmers are unable to survive or make a living. Why? Prices are too low—a result of overproduction spurred by US and European farm and trade policies that create unfair trading conditions.
Cotton is a good example of agricultural dumping. The US spends nearly $4 billion annually in cotton subsidies–this is roughly three times the entire USAID budget for the whole continent of Africa. The US is also the world’s large subsidizer. Cotton farmers receive more per capita and per acre than any other group of farmers–in some cases, five times as much. The US is the world’s largest exporter of cotton–more than half of all US cotton is exported– which has a huge impact on global prices, especially when it can be sold at prices that undercut what other farmers can earn.
An Oxfam analysis estimates that global cotton prices are depressed by about 10 percent due to US subsidies. For cotton producing nations in Africa, such as Mali, this is a devastating loss of income. Oxfam estimates that Mali lost $43 million in export earnings due to US cotton subsidies in 2001. By comparison, Mali received $38 million in US foreign assistance. The US has 25,000 cotton farms, while more than three million Malians depend on cotton.
The good news is that change is possible. Global rules for trade are negotiated by country-governments at the World Trade Organization (WTO). Benin, Mali, Burkina Faso, and Chad–on behalf of West and Central African countries–have proposed dismantling cotton subsidies. These four African countries have asked for financial compensation for the damaging impact of US subsidies.