The Great Cotton Stitch Up

First appeared at Ctrl.Alt.Shift on December 6 2010

Money given to help EU and US cotton farmers is ruining the chances of the West African cotton industry and distorting the global cotton market, according to a report released last week by the Fairtrade Foundation called The Great Cotton Stitch Up.

The report focuses on four West African countries referred to as ‘the C-4’ (cotton four): Benin, Burkina Faso, Chad and Mali, which all rely on cotton more than any other country to make money from exports.

Although the EU only produces 2% of the world’s cotton, its farmers get subsidies of $2.51 per pound of cotton, which is more than the market price. The US and the EU have spent $31.45 billion over the past nine years, which has led to what Fairtrade calls a ‘dampening down’ of cotton prices and reduced demand for West African cotton.

According to Fairtrade the ‘stitch up’ is that, although cotton is the most used natural fibre in the world, countries where it is cheap to produce remain poor and dependent on aid. the reprt claims this is largely down to subsidies to farmers in richer countries. Cotton should be something that helps lift countries like Chad and Mali, where 40% of the population depend on the cotton industry, out of poverty. Fairtrade says this is more likely to happen if the C-4 are on a level playing field with the EU and the US.

In 2001, the Doha Development Round (DDR), negotiations which aimed to create global trade rules that would simulate growth in opportunity and wealth for developing countries, began. However, little has been achieved over the last decade.

Fairtrade admits that if subsidies were eliminated production would decline in countries like the US, but that it would rapidly expand in other countries like the C-4. This argument could lead to criticisms from the ‘we-look-after-our-own’ brigade: why shouldn’t the EU give an advantage to their own farmers? The answer to this would be that EU and US aid to developing countries could be reduced if Southern countries had more economic independence.

The report accuses the EU and US of taking the easy option: giving aid to countries instead of reforming the systems that keep people trapped in poverty. The document states that the original aims of the Doha Round have been ‘glossed over’. It’s well known that a fundamental power imbalance is one of the major issues in the fight against poverty, but Fairtrade hope that the C-4 coalition will strengthen the position of these countries in global negotiations, along with support from countries like India.

The Indian government came under criticism from the US after its government introduced the Minimum Support Price for its cotton farmers after thousands committed suicide over debt. This is, however, despite the fact that the average Indian government assistance is 15 times less than that given to US farmers.

Fairtrade and eliminating subsidies are not the solution to a fairer global system, but they are a good place to start. The power that certain countries have over others is not only unjust but also unsustainable. Radical and lasting changes need to be made to combat global inequality, but while we are pushing for these to happen, any step towards equality is a good thing.

Words: Amy Hall

Download the full report here.

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