Africa Speaks Reasoning Forum

At the end of the chain, the farmers who face ruin

As Western subsidies distort Africa's markets, Kate Eshelby in Burkina Faso reports on the victims
Published: 14 December 2005

Seydou, dressed in a ripped T-shirt that hangs off his shoulders, looks blank when questioned about the effects of United States subsidies on his only source of income, cotton farming.

"I don't know about cotton in the US but I know cotton prices have fallen here in Burkina Faso," he says solemnly. The farmers working in the cotton fields of Burkina Faso, often in remote locations, have little knowledge of the intricacies of world markets. What they do know is the price they receive for their cotton harvests, essential for basic necessities such as medicines and school fees, is dropping fast.

The end of cotton farming in Burkina Faso and other cotton-producing west African countries is rapidly approaching. World cotton prices have dropped to a historic low because of the EU and US trade subsidies which have artificially distorted world markets.

In Burkina Faso, a former French colony in West Africa, cotton is the country's main cash crop. It is the primary source of foreign income, making up one-third of export earnings, and the lifeblood for the majority of farmers. Here cotton is grown on small, family-owned farms, seldom bigger than five hectares. Yacouba, a farmer, explains: "I also grow maize and groundnuts on the farm, to feed my family, but cotton is my only source of cash."

In America, the benefits of subsidies only reach a small number of people, whereas two million people in Burkina Faso, one of the world's poorest countries with few other natural resources, depend on cotton for survival.

Burkinan farmers are forced to be efficient, also prevailing against climatic uncertainties and poor infrastructure - all this with no support from subsidies.

Fields are prepared by plough and seed planting and picking are done by hand, which explains why cotton is also vital for providing jobs. Pickers are dotted around the fields, plucking the cotton balls from the shoulder-high plants. Some of the women have children tied to their backs and the sacks of cotton are steadily piling up under the shade of a giant baobab tree.

At the World Trade Organisation talks, Burkina Faso is resting its hopes on cotton subsidies being eliminated, or at least reduced, in order to save its fundamental crop from demise.

The US gives approximately $3.4bn (£2bn) a year in subsidies to its 25,000 cotton farmers; more than the entire GDP of Burkina Faso. Subsidies dramatically increased in the US after the 2002 Farm Act and US cotton production has recently reached historic highs. It is now the world's second largest cotton producer, behind China, and the biggest exporter - an easy achievement because US cotton prices no longer bear any relation to production costs.

World cotton prices are in decline due to global over-production, fuelled by the agricultural subsidies. EU and US taxpayers and consumers pay farmers billions of dollars to overproduce products for a stagnant market. These surpluses are then dumped overseas, often in developing countries, destroying their markets and driving down world prices. The livelihood of West Africa's 12 million cotton farmers will soon be destroyed if subsidies are not slashed.

In March 2004, a World Trade Organisation panel ruled that the majority of US cotton subsidies were illegal. The US tried to appeal against this decision but was overruled. All eyes will be on the Bush administration in Hong Kong to see if it will abide by the global trade rules.

The Hong Kong trade talks are the climax of a year in which the European Union and G8 countries agreed to increase aid and provide debt relief to the developing countries. But they did not set a clear date for ending the trade-distorting subsidies and giving market access. For Africa, trade holds the key.

If Africa took just 1 per cent more in world trade it would earn $70bn more annually - three times what it now receives in aid. In 2003 Burkina Faso received $10m in US aid, but lost $13.7m in cotton export earnings, as a result of US subsidies. The US was legally required to eliminate all trade-distorting subsidies by 21 September, but has delayed taking action, in part due to a tussle with the EU.

Issaka Ouandago, from the British charity Oxfam in Burkina Faso, said: "Both the US and EU brag on their boldness, but the actual reform they propose is minuscule, tiny fractions of their massive farm support. The negotiations have recently moved into the finger-pointing phase in which rich countries criticise the inadequacy of each other's proposals. Meanwhile, poor countries await something real."

Oxfam has been supporting the struggle of African cotton farmers. "We can only hope the US reform their subsidy programmes and stop dumping cheap cotton onto the world market. Despite their WTO commitments to reduce trade-distorting subsidies, the EU and US have used loopholes and creative accounting to continue. Such practices are undermining the fragile national economics of countries that depend on cotton," Issaka says.

Burkina Faso will be represented at Hong Kong but it is the richer countries which drive the negotiations, with tools at their disposal, including enticements of aid. West African cotton producers are, however, becoming far stronger as a group. "We have become more united to make our voice heard. Africa is in Hong Kong as one, speaking the same idea," explains Yao, a member of Burkina Faso's National Union of Cotton Producers.

The only reason Burkinan cotton farmers are still surviving is that producer prices have been maintained at a minimum level. The minimum farmers need to break even is about 18p per kg - the price never goes below this level, despite being above current world prices. In recent years the Burkinan cotton companies used their profits from previous harvests to support the farmers; these savings are now depleted. The full effects of world prices have, therefore, not yet been felt by the farmers.

In front of Seydou's mud house, a pile of bright-white cotton sits drying in the glaring sun. Inside the walls are bare, except for a single cross; a bundle of clothes hang from a rope and a pile of maize is stacked in the corner. "I cannot afford to buy things because cotton prices keep fluctuating. I know cotton grows well here but prices are down so I cannot send my youngest son to school. This makes me sad. I know his only chance of a good future is school."

As the sun sets, the workers leave the fields, holding sacks of cotton above their heads. A donkey cart trundles by, carrying a mound of cotton, kicking up a trail of red earth. Their livelihood will depend on the decisions made at the WTO.

http://news.independent.co.uk/world/africa/article333034.ece