NCC Responds to Misinformation About Cotton Program

In response to recent press accounts regarding the U.S. cotton program's impact on the international cotton market, a NCC report affirms that the program has not caused economic harm to West African cotton producers.

Published: February 27, 2002
Updated: November 9, 2007

The Facts about West Africa and the Cotton Market
National Cotton Council
November 2007

There has been a sustained campaign against U.S. cotton, orchestrated by international aid organizations such as Oxfam, alleging that U.S. agricultural subsidies harm poor farmers worldwide and that the U.S. cotton program particularly harms poor West African cotton producers.  Despite efforts by the National Cotton Council (NCC) and others to set the record straight, the repeated errors and misrepresentations continue.  It appears that some organizations believe that if a statement is repeated often enough, it must be true.  But these claims are not true, and they have been proven incorrect, repeatedly.  

Most economic studies that have examined the impact of the U.S. cotton program have found only a minimal impact on the world price of cotton – and those findings were made several years ago, before U.S. acreage began declining.  It is increasingly evident that the economic plight of West African cotton producers is the product of internal conditions endemic to those countries – not the U.S. cotton program. 

Most agricultural observers are keenly aware of the increases in the prices of U.S. grains and oilseeds in the past year.  Cotton has been rising in value as well, just not as dramatically as other commodities.  With the differential increases in prices, U.S. growers have reduced their cotton acreage and expanded production of grains and oilseeds.  Growers in the rest of world have been expanding cotton area, as the following table demonstrates:

2002

2007

 

  US cotton acreage was 13.7 million

  US acreage was 10.6 million

Down 23%

  China cotton acreage was 10.3 million

  China acreage was 15.1 million

Up 46%

  India cotton acreage was 18.9 million

  India acreage was 23.5 million

Up 24%

  Brazil cotton acreage was 1.8 million

  Brazil acreage was 2.8 million

Up 54%



In addition to expanded area, rising yields have also contributed to increased world cotton production.  Using 3-year average yields to account for weather events, the three years ending in 2002 and 2007 show:

2002

2007

 

  China avg. yield was 1,001 lbs/ac

  China avg. yield was 1,107 lbs/ac

Up 14%

  India avg. yield was 263 lbs/ac

  India avg. yield was 453 lbs/ac

Up 72%

  Brazil avg. yield was 975 lbs/ac

  Brazil avg. yield was 1,173 lbs/ac

Up 21%



The increase in both area and yield in these 3 countries has resulted in a rise in annual total production of 29 million bales between 2002 and 2007.  This contrasts sharply with the West African experience where total area in cotton has fallen from just under 4 million acres harvested in 2002 to 3.1 million acres in 2007, down 20%.  While other countries have experienced dramatic improvements in yields, the same cannot be said for West African countries.

The world market conditions facing West Africa have been no different than those facing China, India and Brazil.  So, why is West Africa different from the rest of the developing world?  To a large extent, parastatal corporations continue to hold a monopoly over the cotton marketing systems in West Africa.  These corporations eliminate competition and keep the West African cotton producer dependent on them as the only source for inputs and for sales of cotton.  The economic power of these institutions results in less than 50 percent of the world price of cotton getting to the West African cotton producer.  The UN’s Food and Agriculture Organization has indicated that cotton farmers in Burkina Faso often receive less than 40 percent of the world market price for their product.

In addition to receiving less for each pound of fiber than their counterparts in other developing countries, West African cotton farmers are losing ground in terms of productivity.  West African countries continue to reject biotech cotton, while the rest of the world benefits from its pest control and increased yields.  This rejection comes in spite of a study by the World Bank concluding that welfare in developing countries would be enhanced far more from the adoption of biotech cotton than by the removal of all cotton subsidies and tariffs.

The U.S. cotton industry, while being wrongfully accused of causing economic hardship in Africa, has done far more to improve the situation there than most organizations claiming to care.  Since early 2004, the NCC has engaged in a number of outreach activities with the West African countries of Benin, Burkina Faso, Chad and Mali. These efforts are aimed at helping raise their agricultural productivity, spur economic growth and alleviate hunger and poverty. All of the U.S. cotton industry’s work has been in close cooperation with USDA and US-AID and has now been folded into the U.S. government program known as the West African Cotton Improvement Project (WACIP).

These assistance programs are targeted at the real issues in West Africa, from infrastructure to competition to production technologies.  West African countries have so far been granted $700 million in Millennium Challenge funding by the United States and another $500 million has recently been proposed just for Burkina Faso.  These programs, if managed effectively, can have real long-term impacts on the lives of West African cotton farmers.