Cotton-Subsidy Reform Could Feed, Educate Millions
Photo credit: Judy Baxter
It's time to write to Congress and ask: What's the cotton-picking idea? A substantial overhaul of American cotton subsidies in the 2007 Farm Bill could result in additional funds that could feed one million children for a year or pay school fees for at least two million children living in impoverished West African cotton-farming households, according to a new study by Oxfam America.
"Previous studies my colleagues and I have done clearly show the trade distorting effects of US cotton subsidies by lowering the world price of cotton, with results at the aggregate level," says Daniel Sumner, director of the University of California Agricultural Issues Center and one of the authors of the Oxfam report. "But these new numbers show that even a modest increase in the world price of cotton that only partly reaches the farmer could greatly improve the daily lives of some of the world's poorest people, and could literally mean that millions of poor people could be fed."
For the typical cotton-growing West African household of 10, who live on less than a dollar a day per person, cotton is often the only source of income. According to the Oxfam study, a complete removal of U.S. cotton subsidies would jack up the world price of cotton by 6 to 14 percent, resulting in a 5 to 12 percent increase in the prices that West African farmers receive for their cotton.
Additional income from increased cotton prices could have significant impact on their lives, says Oxfam, providing extra cash for covering the healthcare costs of four to 10 individuals for an entire year, food for one or two children for one year, or schooling costs for 1 to 10 children. (The country has an adult literacy rate of less than 25 percent.)
"This data clearly exposes the hypocrisy of our policies, giving international aid with one hand and taking with the other through unfair trade rules," says Raymond C. Offenheiser, president of Oxfam America. "With Congress looking at the Farm Bill right now, and renewed interest in the Doha round, this study shows how reform could help millions of poor people who are ready to lift themselves out of poverty through farming and fair trade."
American produces get more federal subsidies with each additional bushel they produce, so it should come as little surprise that farms encourage overproduction. The surplus cotton then floods the international market, lowering world prices and undercutting the livelihoods of millions of already-poor farmers around the globe—a move that is actually illegal under World Trade Organization rules.
"Any delay in reforming the US subsidy program would signal to our trading partners that the US is not serious about a new global trade agreement and, most importantly, would mean continued suffering for millions of poor African farmers who are undermined by US subsidies and dumping." continued Offenheiser. "Reforming the Farm Bill provides us with the opportunity to help more American farmers, reduce the harm of trade distorting subsidies for poor farmers overseas, and put the US in a stronger position in future international trade negotiations."