Nov 15-30, 2019
African cotton is known for its quality, fiber strength and demand in the international market. The climatic conditions in most of the countries in the western Africa and parts of Eastern Africa are conducive for cotton cultivation. The question then arises why the farmers are not enthused to cultivate cotton?
The reasons are not far to seek. Most of the cotton grown in the continent, particularly in countries like Lesotho, Benin, Burkina Faso, Chad and Mali is exported to various destinations. For making certain type of textiles and fabrics, African cotton is preferred. But most often African cotton is priced out because of the heavy subsidy given to cotton farmers, particularly in the US.
For instance, between 2005-2017, the US subsidy given to cotton farmers aggregated to US$ 38 billion. Despite the World Trade Organization’s stipulation not to give subsidies beyond a threshold limit, the US is adamant that it would not roll back, though it may take a different stand vis a vis other countries, when its exports get adversely affected. It is estimated that the subsidy element is as high as 74% of the value of produce, while the stipulated level of subsidy fixed by WTO is 10% of the value of produce. Flouting the norms further, the US is extending a Marketing Facilitation Program, under which it has provided US$462 million direct payments to cotton producers whose export earnings have fallen due to the US-China trade war. As a result, despite the low cost of cultivation in African region (US$1.23 per kg) as against the US (US$1.88 per kg), the US exporters of cotton is enjoying an upper hand
What lies ahead for Africa? The continent can take recourse to three steps. Foremost, is extending the subsidy to the farmers in the cotton growing countries to overcome the disadvantages being faced in the export market as against its competitors. The debt ridden economies in Africa can ill-afford such pricey incentives. The way out is creating a dedicated fund by charging a nominal fee from countries’ exporters?
Along with that, cotton growing countries in the continent can adopt genetically modified cotton seeds, which care pest resistant and high yielding. Many countries including India, China and the US are using GM seeds not alone for cotton cultivation but also for growing other crops as well.
The third approach could be to promote corporate farming in cotton by involving big companies from other parts of the world by leasing huge tracts of land. Many countries are prepared to take the land on long lease. Recently some of the Gulf countries like Abu Dhabi had acquired huge tracts of land in Africa, presumably for agricultural purposes. Of course a fine line should be drawn between indiscriminate sale of land and carful and planned monetization. That can help augment agricultural production, exports and revenue flows.
