Home

African Cotton Farmers Hurt by Subsidies

Posted on February 2, 2010 by Alok Amatya
Topics: Agriculture, Trade
Countries: Mali, United States
Cotton farmers in western Africa have been badly affected by a global drop in prices. Photo: <a href="http://www.flickr.com/photos/carsten_tb/384806027/">10b travelling (flickr)</a>
Cotton farmers in western Africa have been badly affected by a global drop in prices. Photo: 10b travelling (flickr)

Falling cotton prices hurt African farmers far more than their American counterparts. And American subsidies may be to blame for the Africans' pain, according to a documentary on Dev.tv, a nonprofit media outlet.

American farmers profit by growing more cotton since the U.S. government has promised them a fixed price no matter how much they produce. But American subsidies cause the market to be flooded with cotton, according to an industry expert in Benin, Bernard Adikpeto. "Because the U.S. subsidizes its cotton production, its farmers put a surfeit of 1 million tonnes in the market in 2001, leading to a drop in cotton prices."

On the other hand, African farmers don't get any subsidies, so they are hit hard when cotton prices fall in the free market. Consequences are especially bad because this crop is a crucial source of income in countries of Central and West Africa. For example, the cotton industry in Burkina Faso employs more than 2 million people and generates 40 percent of the nation's export revenue. Nearly 40 percent of Chad's population is involved in producing cotton, and two-thirds of its total export comes from this crop. In all, more than 10 million African farmers have lost income since the price of cotton fell worldwide.

What's ironic is that African farmers are losing money while selling a product they produce more competitively than others. Central and West African countries produce cotton at half the cost of the U.S. and Europe. Yet, these African nations bear a loss of $1 billion in the cotton economy every year.

To learn more on this topic, you can watch the documentary below :

Bookmark/Search this post with:
Keywords: Benin, Burkina Faso, Chad, cotton

Comments

Thu, 02/18/2010 - 08:41 — Stan Afman (not verified)

I already eared about this

I already eared about this problem something like 10 years ago. As long as subsidies stay how they are in developed country, it's not possible to expect a growth of all Africa. There is the same problem with lot of raw material. Thanks for the video.
loi scellier

Post new comment

Your email address is kept private and will not be shown publicly.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd> <img> <blockquote>
  • Lines and paragraphs break automatically.

More information about formatting options


Stories We're Watching
Subscribe

Time for Next Stage of Sustainable Business

Reuters - Fri, 03/12/2010 - 13:12
Corporate America needs to track its use of energy and resources as closely as it does its hiring and cash flow if it wants to keep pace with social concern about climate change and other sustainability issues, an investor group argues in a new report.

Rush for Patents May Hinder Transfer of New Climate-related Technologies

Policy Innovations - Fri, 03/12/2010 - 14:35
Mitigating overly rigorous intellectual property rights lies at the core of any meaningful international mechanism for facilitating sustainable technology transfer to developing countries.

Egypt to Secure $430 Million Loan for Wind Farm

Reuters - Fri, 03/12/2010 - 05:39
Egypt is set to secure a $430 million loan from Japan to fund a 220-megawatt wind farm as it tries to boost its renewable energy output.

Western U.S., Canada Go Own Way On Carbon Trading

Reuters - Thu, 03/11/2010 - 16:18
As U.S. prospects for a national climate change bill fade, five U.S. states and Canadian provinces are on track to start a cap-and-trade market for carbon dioxide in 2012, say officials who see fading federal momentum boosting regional efforts.

US Remittances Keep Haiti Afloat

IRIN News - Fri, 03/12/2010 - 07:44
Haiti's economy depends on the estimated $1.5 billion a year in remittances sent home by its million-strong diaspora. Dilip Ratha, lead economist at the World Bank said the figure could be even higher, accounting for perhaps half the national income.
See all Breaking News >

Recent comments

  • "Esther, Wow! Thank you for commenting. One of the best things (among many) about applying these controlled random..."
    by Jill Scantlan
    on A 'Rising Star' in Economics
  • "Thanks for this article. One small correction though. What the post refers to as "my best known work" (the work on..."
    by Esther Duflo
    on A 'Rising Star' in Economics
  • "This is so sad, and at the same time so true. We talk so much about terrrorism on news that we forget about poverty and..."
  • "Microfinance is amazing. Allowing millions to send their children to university in order to "break the chain" and give..."
  • "UPDATE: Following an investigative report on BBC NewsNight, British Parliament has now passed a bill that will..."

Countries

An initiative of Mercy Corps
“You must be the change
you wish to see in the world”
— Mahatma Gandhi
Learn more about Mercy Corps >

Efficiency

Over the last five years, more than 89% of Mercy Corps' resources have been allocated directly to programs

Excellence

America's premier charity evaluator gives Mercy Corps four stars in organizational efficiency. Click here to learn more.

High Value

Every dollar you donate to Mercy Corps helps us secure $11.16 in donated food and other critical supplies.

Mercy Corps — Dept. W — 45 SW Ankeny — Portland, OR 97204
 All original content Copyright © 2009 Mercy Corps. Quoted and linked content is property of the creator(s). Mercy Corps will not sell, rent or trade your personal information.