Cotton is "white gold"

Further to the earlier article on cotton

The BBC World Service tracked a kilo of cotton from its origins in West Africa to the department stores of New York for Cotton T-shirts - the product of a number of different global industries, with production in almost every country in the world - are one of the best products for tracking globalisation. There are 2 to 3 million cotton producers in West Africa, whilst some 15 million people depend directly of indirectly on the cotton sector; many of these belong to the poorest sectors of society.

It is well worth summarising here to demonstrate how Capitalism is a world system .
Burkina Faso, Benin, Chad, Mali are some of the world’s poorest countries with a Human Development Index ranking of 169, 158, 166 and 164 (out of 173) respectively. These countries accounted for 10% of total cotton exports in 2001. Cotton exports account for 42 % of exports for Mali, 34% for Chad, and 45% for Burkina Faso and 65% for Benin.
In Burkina Faso a typical cotton farm is a freehold, worked on by a family who cultivate the six or eight hectares of land.

"Cotton is very special as probably the only commodity where you have producers from developing countries with a plough and a pair of oxen, competing with producers from developed countries with a cotton picker [-machine] which costs $300,000," says Gerard Estur, a freelance international cotton consultant. "These two are competing in the same world market."

One kilo of Burkina Faso-produced raw cotton is worth $0.32 (£0.16). For many of the cotton producers the cash they get from selling the cotton is the only money they receive in the whole year. They have no alternative cash crop. But cotton prices globally are declining

From the farm the cotton is transported to the ginning factory to make lint - a process which takes the cost per kilo to $0.76. The companies have not made money for the last three seasons, and prices are well below the costs of production with the companies almost bankrupt.

The cotton is now transported for export to the Togo port of Lome, where it is sold to merchants at $1.20 per kilo. Over half of it is sold to China: loaded onto cargo ships for ports such as Shanghai, where it is sold to local spinning factories for $1.32 per kilo.

Bonded Servitude

The International Labour Rights Fund, is critical of the conditions in both the spinning factories and the garment manufacturers, of which there are thousands in Shanghai - staffed by some of the more than 100 million "floating workers" who have migrated from inland.

"They're bound to their factories, because they're not allowed to live - they don't have residents permits for the areas They're not allowed to live in the areas where the good jobs are unless they have a job - so they're bound to their factories for permission to live in the area, which makes it very difficult for them to quit, or to look for another job if conditions are bad."

The garments themselves - made for many of the West's most famous brands, often in the same massive factory - are now taken to port and loaded for export to the US.

The average price of a T-shirt imported into the US is $1.51, but a downtown department store in Manhattan will sell two for $20.

Cotton that started in Africa costing $0.76 a kilo is now worth $25 a kilo.

"The way it's produced is going to cost in human lives, in misery, in environmental degradation. And some way down the line, we're all going to pay those costs." Says Bama Athreya, director of ILRF

Cotton Subsidies

Details of domestic subsidies to American and European domestic cotton growers can be seen here US , and here EU

The United States’ 25,000 cotton farmers, chiefly in Texas, California and Mississippi, receive billions in government subsidies, which encourage farmers to grow and export more cotton, thus driving down international prices and reducing the incomes of African cotton growers, in the eyes of many economists. In crop year 2002, the US government provided $3.4 billion in total subsidies to the cotton sector. To put this figure into perspective, it is nearly twice the total US foreign aid given to sub-Saharan Africa. It is also more than the GDP of Benin, Burkina Faso, or Chad, the main cotton-producing countries in the region.

US subsidies have led to depressed world cotton prices, which in turn have cost countries in Africa millions of dollars in lost export earnings. This means less revenue, which these countries badly need to fund basic services such as education and healthcare, and to finance debt. Oxfam estimates that sub-Saharan African countries lost $305 million due to US subsidies in crop year 2001. These are some of the poorest countries in the world, and these losses are not a one-time event. For the 2002 crop year, Oxfam estimates sub-Saharan African countries lost $94.6 million. All told, between crop years 1998 and 2002, the USA spent $14.8 billion on cotton subsidies. This is virtually the same as the total value of cotton produced during that time - $21.6 billion. Harvesting government subsidies is nearly as lucrative as growing cotton in the USA. Without subsidies, most US cotton production would not be economical.

The losses associated with cotton subsidies exceed the value of US aid programs in some of the major cotton-producing countries in Africa. For example, in 2002:

• Burkina Faso: received $10 million in US aid, yet lost $13.7 million in export earnings;
• Chad: received $5.7 million in US aid, but lost nearly the same amount in export earnings;
• Togo: received $4 million in US aid, but lost $7.4 million in export earnings.

European Union’s cotton regime also has a significant and measurable impact (EUR 0.8 billion in subsidies spent annually (mainly to Greece, Spain and Portugal), with exports from Greece increasing by 209% between 1991 and 2001.European cotton farmers receive by far the highest level of support per kilo in the world. Prices paid to cotton farmers in the EU were 154% above world prices in 2001/2002, significantly higher than prices paid in the US. On average, aid for cotton production amounts to an average of EUR 600 million for Greek producers and EUR 200 million for Spanish farmers.

Socialists have always known that there is no such thing as “fair trade” or a “free market” . The peoples of Africa and of the rest of the world will always be subjected to the vagaries and vacillations of capitalist competition .