Pietra Rivoli, in her book Travels of a T-shirt in the Global Economy
reveals some fascinating insights into the brutality of US Agricultural Protectionism.
“Texas Cotton Farmers have both a kindred spirit and a staunch ally in George W Bush, who spends long weekends in his ranch in Crawford, Texas. According to at least some observers, the definitive source of US cotton farmers’ comparative advantage is their ability to get help from friends in high places.”
Some amazing facts:
* The 2002 Farm Bill therefore brings the cotton farmers income up to a minimum of 72.24 cents per pound. The average world price of cotton in mid-2004 was 38 cents per pound.
* US Government Subsidies under the Cotton Program – approx $4 billion in 2000 – exceed the entire GNP of a number of the world’s poorest cotton producing countries, as well as the United States entire USAID budget for the continent of Africa.
* The 2002 Farm Bill protects against:
* Bad weather: Crop Disaster Program reimburses farmers for losses due to unusual weather
* Bad credit: Farm Loans programs provide financing to farmers who are unable to get credit elsewhere
* Bad luck: The US Government offers a variety of crop insurance schemes
* The primary effect of US cotton subsidies is to increase the supply of cotton in the US and decrease the world price for cotton. Declines in world cotton prices, in turn, lower the income of farmers outside the United States.
* Most of American cotton’s history – from plantation slavery, to sharecropping to company towns to Bracero workers – is about yet another way of avoiding having to find workers and pay the market wage
* Suppressing the labour market has been a central how of American dominance in the global cotton industry. And in suppressing the labour market, basic freedoms were denied to generations of people – slaves, sharecroppers, and migrant workers. It was not the perils of the labour market but the absence of the market that doomed these generations of workers.
How on earth can African farmers compete with that ? Even if Africa has lower labour costs, the brutality of US Agricultural protectionism policy suggests the African continent is doomed to poverty before it starts.
“Indian and Pakistani farmers fare little better. In 2001, 500 Indian cotton farmers committed suicide as worms ate the last of their cotton. The farmers could hear the worms chomping, with a sickening click click sound that kept the villagers awake all night. Dealers had furnished the farmers with pesticides at 36% interest, but it was the wrong pesticide with the wrong directions, and the farmers couldn’t read anyway.
There was no government extension service to give the right advice, no federal financing to replace the money lender, no public school to learn to read, and in the end, no way out. The pesticide so useless to the worms, worked quickly as a poison, and hundreds of farmers dropped twitching to the ground in the middle of the cotton fields.
They never had a chance against George W Bush.”
Excerpts from Travels of a T-shirt in the Global Economy (pages 54-57) by Pietra Rivoli.
