The Business of Cotton - Subsidies, organics and GMOs
By all accounts, Africa can be a major player in the global cotton market. How soon it realizes that potential depends on how well it keeps other people’s agendas at bay.
A report released in June by Oxfam America, the international development advocacy organization, says that the income of West African farmers could increase by about 5 percent if the United States eliminated subsidies for its cotton industry. Oxfam’s report, “Impacts of Reductions in U.S. Cotton Subsidies on West African Cotton Producers,” found that eliminating those subsidies would increase world cotton prices by 6 percent to 14 percent. That translates to an extra $46 to $114 a year for a typical cotton-producing household in West and Central Africa, where more than 10 million people depend on cotton farming for their major source of income.
Cotton has been grown in West Africa for more than a hundred years, and a significant traditional textiles industry has existed in the region for more than 50 years. Globally, cotton is the largest nonfood crop grown, with 40 million farmers. But cotton production and trade continue to be distorted by the subsidies U.S. and European Union farmers receive from their governments to offset their high production costs and keep prices low. Subsidies, in fact, are one of the main reasons why developing countries walked away from World Trade Organization talks to eliminate barriers to trade. By artificially increasing cotton production and exports and depressing world prices, they reduce the export earnings of developing countries, thus curtailing the revenues of several million poor farmers.
Thanks largely to the cotton industry’s powerful lobby, the likelihood of the U.S. government eliminating cotton subsidies is practically nil. According to the Department of Agriculture, U.S. cotton subsidies in fiscal year 2005, which ended Sept. 31, 2006, totaled more than $4 billion. Congress currently is considering subsidies for the U.S. industry in the 2007 Farm Bill, which will set the level of subsidies for the next five years.
Meanwhile, cotton industry representatives from across the continent and worldwide met in Cape Town, South Africa, in June for the Africa Regional Organic conference aimed at strengthening the production of organic cotton in Africa. The global market for organic cotton is growing by 100 percent a year and is expected to reach $2.6 billion by the end of 2008. Growing cotton organically eliminates the high costs of fertilizers and pesticides while providing extra income from rotation crops like peanuts and soy beans.
The Cape Town meeting was hosted by the Organic Exchange, a nonprofit Texas trade organization working to expand the use of organically grown cotton, and by Woolworth’s South Africa and the Shell Foundation. The foundation provides seed capital and business mentoring to help farmers in developing countries tap into the organic market and promotes strategic partnerships with major retailers. At the conference, Nordstrom pledged $100,000 to the Organic Exchange to be used to support a farm development project for small-scale African growers. Woolworths has pledged to help develop an organic cotton pipeline in South Africa by 2012.
Writing in the June 7 issue of the Black Agenda Report, managing editor Bruce Dixon warns farmers to be wary of such corporate gifts. He points specifically to a recent $150 million outlay by the Gates and Rockefeller foundations to spark a “green revolution” in Africa with genetically altered crops. The foundations argue that such crops will rescue Africa from endemic shortfalls in food production.
“Of course, U.S.-based agribusiness holds the patents to these wonder crops, and can exercise their proprietary ‘rights’ at will,” Dixon writes. “Are corporate foundations really out to feed the hungry, or are they hypocritical Trojan horses on a mission to hijack the world’s food supply, to create the most complete and ultimate state of dependency?”
Last year, Dixon notes, the Gates Foundation hired former Monsanto Co. vice president Robert Horsch as senior program officer for Africa. The world’s leading producer of genetically engineered seeds, Monsanto invented biotechnology and the patenting of life forms by corporations, he argues. “This is the context for the ‘philanthropy’ of the Gates and Rockefeller foundations and their expressed concern for foisting a ‘green revolution’ upon Africa,” he says.
Such arguments aren’t stopping African countries from going ahead with plans to introduce genetically modified crops. Kenya, for example, is conducting trials of a genetically modified cotton variety developed through its own research. The hope is that cotton varieties carrying this particular gene will exhibit resistance to the bollworm.
By Rosalind McLymont