If Oxfam and other non-governmental organizations really want to help cotton farmers in West Africa, they could start by spending money to help those growers improve their yields, according to a National Cotton Council economist.
In recent years, Oxfam International, the British-based charity organization, has almost single-handedly turned the bashing of the U.S. cotton program into a cottage industry, including blaming U.S. cotton subsidies for the impoverishment of West African cotton farmers.
But Oxfam and, more recently, European Union representatives, consistently fail to tell the rest of the world the whole story, says Gary Adams, vice president for economic services at the Memphis, Tenn.-based Cotton Council.
Speaking at the Beltwide Cotton Conferences in San Antonio, Adams said cotton farmers in the West African countries, which include Benin, Burkina Faso, Chad and Mali, have been stuck on a yield plateau in recent years.
“During the past decade, average yields in West Africa have remained flat, while the average across all other countries has increased by 150 pounds per acre,” he said. “Or to look at it another way, at a world price of 60 cents per pound, an average acre of cotton outside of Africa would generate $90 more in revenue due to yield growth over the past decade.
“West Africa’s potential growth depends on correcting the imbalances that harm their competitive position.”
Adams, President and CEO Mark Lange and other council staff members have had to become experts on West African cotton to try to fend off the increasing attacks on U.S. cotton by U.S. media outlets, NGOs such as Oxfam and foreign governments.
In recent weeks, that has included writing a lengthy response to a series of articles in the Memphis Commercial Appeal, entitled “Smothered by Cotton Subsidies,” that once again tried to cast U.S. cotton as the villain in Africa’s failing cotton economy.
“The cotton-producing countries in West Africa, mostly former colonies of France, have gained increased attention, primarily due to their role in bringing cotton front and center at the World Trade Organization,” Adams said in San Antonio.
The countries account for only 4 percent of world cotton production, but, because they have little in the way of a textile industry, most of their cotton must be exported as raw fiber, making them more significant players in the overall trade picture.
“We are well aware of their claims of economic injury caused by the presence of the U.S. cotton program,” Adams said. “However, their potential for growth is not determined by the U.S. cotton program, but, instead, will depend on whether or not they can address a number of internal issues related to their production, ginning and distribution systems.”
Members of the Cotton Council staff and USDA agencies have already begun working with soil scientists, entomologists and officials with the classing services of the four primary cotton-producing countries in West Africa to help improve those areas of production.
But much more will have to be done to help West African cotton producers pull their yields up to the levels of other countries, according to Adams.
In its response to the Commercial Appeal series, the Cotton Council noted that those producers are suffering from a long history of official corruption that dates back to the colonial era.
“One of the most brutish facts is that many of the governments in the developing world steal from their own citizens through institutional arrangements that control access to production inputs and market outlets,” the council letter said.
“West African cotton farmers have no choices about from whom they buy inputs or outlets into which they sell their cotton. While a cotton farmer in Brazil or Australia is selling their cotton for 50 cents per pound today, the West African farmer is getting 32 cents per pound.”
Adams, who spoke on “Cotton’s Global Market” at the Beltwide, said West Africa is only one of several regions in the world that are becoming important to U.S. cotton producers because of the increased focus on exports.
While U.S. textile mills formerly bought 60 percent or more of the U.S. crop, increased import competition has diminished the role of the U.S. textile industry, forcing the producer sector to turn its attention to exports. The latter could reach 16 million bales, or 70 percent of the U.S. crop, in 2005-06.
“It’s important to remember that trade occurs at more than just the raw fiber level,” said Adams. “Currently, 5 million bales of the yarn, thread and fabric that are still produced by the U.S. textile industry are exported to other countries, primarily in this hemisphere, for further processing.
Little finished product
“That leaves only a small amount that is completely manufactured into a finished consumer product within the United States. Adding up fiber exports and textile exports suggests that 90-plus percent of the U.S. cotton crop enters export channels at some stage.”
Adams also discussed the outlook for other countries that either purchase U.S. cotton, such as Mexico and China, or have the potential to displace U.S. cotton exports, such as Brazil, India or China.
Brazil, he noted, is a country with a “tremendous potential” to expand production with some estimates suggesting that it could bring 250 million acres of new land into crop production or roughly the equivalent of the amount of land growing row crops in the United States.
“It’s clear that expansion of agricultural production is a priority for Brazil’s government as evidenced by the recent increases in government support for agriculture,” he said. “A recent USDA report estimates that $13 billion in government support is now provided through credit and investment programs.”
Brazilian producers traditionally have benefited from lower production costs than those in the United States, he noted, but the recent strengthening of the real against the dollar has increased the costs of imported inputs and reduced their competitiveness in world markets.
“Current expectations call for a drop in both production and exports in the short term. However, longer term, Brazil still must b e viewed as a country with the potential to increase production and exports, assuming they address some long-standing transportation issues.”
India and China continue to pose interesting problems for the United States, he said: India because it devotes more area – 22 million acres – to cotton production than any other country, and China because it is now both the world’s largest cotton producing and the world’s largest textile exporting country.
“India’s production potential also depends on their ability to improve yields,” said Adams. “Prior to 2003, yields averaged below 300 pounds per acre. Since then we’ve seen a 100-pound improvement, primarily due to improved hybrid varieties and the introduction of Bt varieties.”
China is now the largest spinner of cotton at an estimated 43 million bales and, consequently, the largest importer with potential purchases of 16 million bales in 2005-06. With purchases of 5 million bales in the first five months of this marketing year, China is also on pace to be the largest consumer of U.S. cotton.
“It is likely that the United States will sell China 7 million to 8 million bales of the 2005 U.S. crop.”