Oxfam America

African Cotton Farmers Call for End to US and EU Export Subsidies

15 July 2005

Mozambique is at the center of Oxfam's campaign in southern Africa to change trade rules, and help cotton farmers make a decent living.

Cotton farmers from across Africa convened in Maputo, Mozambique June 30 to join the global movement to stop agriculture policies that are depressing world cotton prices.  The event marked the start of a new regional campaign led by Oxfam America and its partners in Mozambique.

“Cotton is at the heart of our lives. Our families are entirely dependent on cotton,” said Alberto Malico, a cotton farmer from the northern province of Nampula, in Mozambique, at a meeting to launch the Mozambique cotton campaign. “Over the years the price of cotton has continued to drop and we know why this is so. We demand a fair deal in the trading of cotton.”

Malico spoke the day before the G8 summit in Scotland, at which leaders of eight of the world’s richest countries met to discuss international trade, and aid to Africa.  Listening to Malico and others speaking about the cotton price crisis in Maputo were trade ministers, ambassadors, and economists from Mozambique and other cotton-producing countries.  Mrs. Graça Machel, for former first lady of Mozambique, also attended and pledged to support the goals of the campaign.

Research by Oxfam shows that the world oversupply of cotton is linked to government subsidies paid to farmers in Europe and the United States, which encourages large corporate producers to grow more cotton than the market is demanding. 

There are as many as 300,000 farmers growing cotton in Mozambique, and another 25,000 laborers depending on the crop for their living.  They form the backbone of Oxfam America’s cotton trade campaign in southern Africa.   In addition to pushing for changes in export subsidy policies for cotton growers in the US, Oxfam America is also helping farmers in cotton growing regions in Mozambique to make a better living and participate in policy decisions that affect their lives, such as the setting of cotton prices paid to growers in Mozambique.

“Oxfam America is developing a livelihoods intervention with its partners to search for and implement lasting solutions to the problems facing the cotton sector,” announced Oxfam America’s director for Southern Africa, Julio de Sousa at the launch event.

This support will include projects to organize grower associations to advocate for better prices and policies, as well as training for farmers to help improve the quality of their cotton and protect the environment.

Unfair Trade at Root of Cotton Problems in Southern Africa

François Traoré, a Burkinabé cotton grower and President of the African Cotton Producer Association, said how the depressed prices for cotton are devastating 10 million growers in Africa: “The only life we know is that of growing cotton,” he said.  “The sustained drop in the price of cotton is killing families right across Africa.”

In the 13-country Southern Africa Development Community region, the four largest cotton exporting countries are Zimbabwe, Tanzania, Mozambique and Zambia. About half of the SADC countries presently have commercial interest in cotton and 80 percent of the population in these countries consists of peasant farmers who rely primarily on agricultural production for their food security and economic livelihood.

Tanzania’s case exposes this vulnerability. At its peak, the cotton industry was Tanzania's largest employer, with 14 textile and spinning mills employing nearly 35,000 people. Today, most of the factories have closed down, and its contribution to the national economy is insignificant.

Since the mid-1990s, the cotton price on the world market has fallen by 54 per cent, threatening the very existence of cotton farming communities.  According to Dr. Reneth Mano, a research associate of Oxfam America, this is creating “beggars out of efficient farmers.” “Africans will never be happy with aid,” he said at the campaign launch event.  “All we are asking for is fair trade. African nations would earn more from trade than from the inflow of aid, if only the playing field was leveled.”

Antonio Fernando

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Mozambican Minister of Industry and Trade, Eng. Antonio Fernando, called for an end to US and EU export subsidies that are depressing world cotton prices.
Graca Machel

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"Farmers are within their right to call for fair trade and are seeking nothing short of trade justice. Political independence will never be a reality until Africans are economically free," said Mrs. Graca Machel, former first lady of Mozambique and President of the Foundation for Community Development in Mozambique.
Cotton Problems
  • Cost to US Taxpayers: During the 2001/02 season, the US government paid more to its cotton farmers in supports than the value of the harvested crop- $3.9 billion in subsidies for a crop valued at $3 billion.
  • Unfair Trade: American farmers receive three times more in subsidies than the entire US Agency for International Development budget for Africa’s 500 million people—while Africans are denied such supports from their own governments under the terms of World Bank and International Monetary Fund agreements for loans.
  • Loss of income for Africans: The economic losses inflicted by the US cotton subsidy program far outweigh the benefits of its aid. For instance, in 2001 Mali received $37 million in aid but lost $43 million as a result of lower export earnings from cotton.
  • Depressed Prices: In the 2001/02 growing season, prices were around 42 cents per pound, the fourth year in succession that they were below the long term average of 72 cents.