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April 11, 2007

West African cotton farmers ruined by US subsidies

Karim Ouattara, a cotton farmer in Burkina Faso, should be a happy man. His has just produced a bumper crop of the "white gold" upon which millions of West Africans depend. Six tonnes of picked and priced cotton lie heaped on his farm, ready to be sold.

But Ouattara, who for 20 years has made a living on the plantations of the region's biggest cotton producer, has yet to see his cheque. His workers remain unpaid, and for the first time he has been advised to store his crop until the processing plants, themselves struggling to break even, can afford to buy the country's record 800,000 tonnes harvest. In an unprecedented move, Sofitex, the largest of Burkina Faso's three cotton companies, has advised farmers to build a storage shed for every 50 tonnes of the latest harvest.After four consecutive years of plummeting prices on the world market, the industry that provides the backbone to West African economies is now on the brink of collapse.

Cotton provides nearly 70 per cent of Burkina Faso's cash exports, and income for more than a quarter of its 13 million people. The global cotton market has been brought to breaking point by factors known locally as "the monster with three heads": a weak dollar, low world prices and US cotton subsidies.

2007 will be crucial for the futures of 10 million West African farmers as the US re-negotiates its Farm Bill, which has attracted international condemnation. America's 25,000 cotton farmers receive subsidies totalling some $4bn, allowing them to undercut their developing competitors. The subsidies were ruled illegal by the World Trade Organisation three years ago, yet only 10 per cent have been dropped so far, and Washington still pays many times more in subsidies to these farmers than it gives in aid to Africa each year. As a result, world cotton prices are now at the lowest since the Great Depression of the 1930s.

Global trade talks have also stalled since West Africa's four main cotton-producers; Burkina Faso, Mali, Chad and Benin, demanded fair trading conditions for farmers who earn barely enough to cover production costs.

Mr. Outtara is in despair, saying, "Cotton production is meant to be a way out of poverty, not a means of keeping us there." When he finally sells his crop and repays his loans, Mr Outtara expects to make a profit of just 25,000 CFA (West African francs). That is $50. He can no longer afford to pay university fees for Mariam, his 23-year-old daughter, who has dropped out of her accounting course. "I just have to hope the price will pick up. If it doesn't, it will be a catastrophe," he said.

It is a word increasingly heard around the region."The situation is criminal," François Traoré, president of the Association of African Cotton Producers, said of the American subsidies."Families who don't even know where America is are being punished by their policies. We are not their enemies. Why are they destroying us with their riches? One day, when we face the same God, how will they explain themselves?"

The Bush Administration has said it will consider increasing aid to boost African farmers' productivity, but that has been dismissed by developing nations, which would rather have a "fair playing field."

With many farmers running at a loss, most are reducing production or switching crops. For Amadou Traoré (no relation to François), this harvest will be his last. He is turning to maize, which now sells for a third of the price of cotton. "It may not sell as well, but at least you know you can feed your family," he said.

* 20 million farmers in 33 African states rely on cotton production for their living.

* The price of West African cotton has fallen every year since 2003, plummeting from 42 cents to 32 cents per kg.

* Every acre of cotton farmland in the US attracts a subsidy of $230. Economists estimate US farmers would make a loss without the subsidy.

* In 2004/2005, the amount paid out to American cotton farmers came to a total of $4.2 billion dollars. The same year, farmers in Burkina Faso produced a bumper crop of cotton more efficiently, and yet made a loss of $81 million.

The Times

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