Oxfam America

Background


AGRICULTURE

Farm and trade policies in the United States and European Union are creating hardships for family farmers everywhere. Seventy-five percent of poor people in developing countries—some 900 million people—depend on agriculture for their livelihood.

Every day the world's wealthy countries provide nearly $1 billion in support to agriculture. Corporate and large-scale farmers in wealthy countries grow more than is needed. The excess is "dumped" on international markets, where it is sold for less than it costs to grow. This dumping drives down prices and destroys the livelihood of farmers in countries that do not subsidize growers and are forced to open their markets to foreign commodities. Since many poor communities rely on agriculture, unfair trade and farm policies that allow dumping are a major cause of poverty. If farmers can’t sell their crops for a fair price, they must leave their lands, their families, and migrate in search of jobs.

Unfortunately, these costly farm and trade policies don’t really help most small farmers in the United States either. Low world prices are forcing US family farmers out of business at a rapid rate, while large-scale, corporate agriculture reaps the benefits of government payments. This trend is limiting farming opportunities in rural America, too.

Case in point: low cotton prices a tragedy for African farmers

American cotton subsidies are a prime example of how US agriculture and trade policies exacerbate poverty in Africa. More than 10 million people in West and Central African countries earn their livelihoods from cotton production, frequently their main source of cash and export revenues. The US is the world's largest exporter and subsidizer of cotton, spending nearly $4 billion a year on subsidies for 25,000 producers. This is roughly three times the entire US AID budget for Africa's 500 million people.

American subsidies have driven down world cotton prices, generating losses to African producers of $301 million in 2001-2002. For the worst-hit countries, these losses outweigh the benefits conferred by US assistance or debt relief. West African cotton farmers are more efficient, low-cost producers than their American counterparts, yet they simply cannot compete with the US producers’ access to huge subsidies.

The effects of these low prices are devastating: farmers can't afford to send children to school, pay for doctor visits or medicines, or invest in their farms. The cotton price crisis is contributing to a downward spiral into poverty for millions of hard-working African farmers.

Oxfam is working to effect the following changes in trade in agriculture:

  • End agricultural export subsidies and supports, and the cycle of over-production and export dumping by rich countries.
  • Eliminate conditions to IMF-World Bank loans that force poor countries to open their markets to foreign goods, regardless of the impact on poor people.
  • Establish stable, higher prices for primary commodities and better pay for small farmers everywhere.
  • Create a more democratic World Trade Organization which gives poor countries a stronger voice.
  • Develop national and regional trade policies that help poor people to access markets and benefit from trade.
  • Encourage rich countries to remove barriers to all imports from all poor countries.