Word: cotton
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That sinking price makes a huge difference in West Africa, where more than 10 million people depend directly on cotton to pay for food, school fees and housing. The crop provides Burkina Faso and Mali with half of all their export earnings; in Benin it accounts for 75%. "If there is no cotton growing in Mali, Mali doesn't work," says Demba Kébé, an adviser to that country's Minister of Agriculture...
...cotton farmers aren't the only ones feeding at the government welfare trough. According to the Environmental Working Group, a Washington lobby group, last year the U.S. doled out more than $12 billion in subsidies to its farmers on everything from corn to sugar to tobacco. The Europeans spew out subsidies, shelling out $53 billion. With cotton, as with other crops, all those subsidies distort global trade by encouraging U.S. farmers to produce more, which drags down world cotton prices and hurts farmers such as Diarra. "I don't blame the Americans, but I want them to allow...
...world of perfect Ricardian economics, West African cotton growers would be thriving. That's because they can produce and trade high-quality cotton more cheaply than just about anyone--for about 31˘ per lb., compared with 68?...
...subsidies U.S. cotton farmers receive help destroy any advantage West Africa's farmers have. Since the mid-1990s, when U.S. exports of subsidized cotton began growing--according to Oxfam, U.S. sales went from a low of 17% of the world export market in 1998 to 41% in 2003--the world cotton price has dropped by more than half. The International Cotton Advisory Committee, which promotes cooperation among cotton-producing countries, estimates that developing-world cotton growers, including Burkina Faso, Brazil, India, Mali and Pakistan, have lost $23 billion over the past four years to Western subsidies. The irony, says Oxfam...
Developing nations are beginning to use the WTO to push back. Brazil, now the world's second biggest cotton exporter after the U.S., last year won a WTO ruling that Washington's cotton subsidies unfairly distorted world trade. A U.S. appeal was denied. And when Congress failed to act on U.S. Department of Agriculture proposals to fix the WTO problem by a September deadline, Brazil, exercising its right under WTO rules to "retaliate," announced that it would no longer honor patents and copyrights on U.S. movies, pharmaceuticals and other items. The U.S. warned Brazil to back off or face...