DEVELOPMENT-AFRICA: Bright Future for Cotton Producers

By IPS Correspondents Reprint | | Print |

Brahima Ouedraogo

OUAGADOUGOU, Jun 25 2003 (IPS) - By 2010, central and west African countries will start processing 25 percent of their raw cotton into finished products to reduce the negative effects created by subsidies in the developed nations.

”It’s a very ambitious goal. If we process 25 percent, it will be seven or eight times more than we have been getting since we began growing cotton,” explains Victor Ndiaye, the author of a study on the identification and promotion of cotton in west Africa.

Only five percent of raw cotton is processed in the West African Economic and Monetary Union (WAEMU) zone, compared to 62 percent in the United States, 91 percent in China and 100 percent in India.

WAEMU members – Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Niger, Senegal and Togo – are planning to set up a regional training programme for textile workers. They have already announced the reopening of the Ecole Superieure des Industries Textiles in Segou, Mali.

WAEMU and the Central African States Economic Commission (CASEC) need 200 billion CFA (about 363.6 million U.S. dollars) in investments to have the infrastructure available to transform the cotton into finished products.

Of the 41 factories operating in the sub-region in the 1980s, barely 20 remain open today. These plants take in only a fifth of all the regional market revenues – estimated at 700 billion CFA (about 1.2 billion U.S. dollars) – with half going to fraudulent imports and 17 percent to second-hand clothes.

”What’s important is that everyone finally understands that the cotton industry is strategic for our economies,” says Ablasse Ouedraogo, a former assistant director of the World Trade Organisation (WTO).

This initiative is part of the common strategy adopted by the ministers of commerce and agriculture from the sub-region, plus the Sudan, in Burkina Faso on Jun. 18. It aims to promote cotton on the world market and to process it in WAEMU and CASEC zones.

”It’s a rule of economics that raw materials lose more of their value over time than finished products, which gain value over time. The more they are transformed, the more value they take on,” Ndiaye explains. ”We have always been producers of raw materials and we’ve become paupers doing that. We have to start producing finished products instead.

According to projections, 50,000 jobs will be created by the processing of 25 percent of the cotton crop in the WAEMU zone. ”When we buy shirts and T-shirts imported from Asia and Europe, we create jobs and salaries for other people. That’s part of the reason we have so many unemployed people in Africa,” Ndiaye adds.

The WAEMU countries will give priority to the production of thread because, they say, the price of imported printed fabrics is about 40 percent lower than the cost of local product.

Unbleached fabrics also are about 20 percent more expensive than imported ones.

Eric Hazard, a programme director for the Enda Third World, a non-government organisation, says the campaign to process the cotton intensified two years ago. ”It’s a great day, but we have to stay the course, give ourselves the means to do it, and keep the political will strong,” he says.

The cotton-producing companies, who lose 250 million U.S. dollars a year because of subsidies, have called upon the WTO Dispute Settlement Body to award them compensation and stop the developed nations from subsidising their cotton industries.

The Unites States, which is a net exporter of cotton, gave their cotton farmers around 4 billion U.S. dollars worth of subsidies last year, three times more than the aid it gives to sub-Saharan Africa.

The subsidies have led to massive over-production of cotton, causing cotton crops to halve in value since the 1990s.

On Jun. 10, the president of Burkina Faso, Blaise Compaore, appeared before the Trade Negotiations Committee of the World Trade Organisation in Geneva to demand ”more justice and equity” for millions of west and central African producers.

”Our countries which have very fragile economies have made adjustments so they can be more competitive and increase their level of participation in trade. It’s in this spirit that the states of west and central Africa have gradually abolished subsidies to their agricultural sectors,” said Compaore.

”But the impact of these reforms on our countries’ development has been wiped out by certain WTO member countries’ continued support for their agricultural sectors, in total contradiction to the fundamental goals of the WTO,” he said.

”Cotton is one of the few areas where the liberalisation of trade and respect for multilateral rules decreed by the WTO will lead to trade advantages for African countries, which are among the poorest in the world,” Compaore said.

In 2001, the rich countries gave their farmers six times more subsidies than they granted to development aid. Mali, in 2001, for example, received 37 million U.S. dollars in aid, but lost 43 million because of a fall in export receipts due to subsidies.

In April, Benin, Burkina Faso, Mali and Chad appealed to the World Trade Organisation to discuss the subsidy issue at the next WTO ministerial session in Cancun, Mexico. In 2001, cotton represented nearly 30 percent of the three countries’ export receipts.

Commerce and agriculture ministers from central and west Africa met in Ouagadougou, the capital of Burkina Faso, last week, to discuss preparations for the WTO conference in Cancun in September.

”The Ouagadougou meeting gave us hope by providing an opportunity where we could confirm the unity of action necessary for the survival of thousands of producers and people in west and central Africa,” the minister of commerce, Benoit Ouattara, of Burkina Faso, said triumphantly.

”It’s a revolution. This meeting was held at the right time as the cotton crisis demands a policy decision,” says Francois Traore, president of the Confederation of Small Farmers of Burkina Faso.

For Ouedraogo, it is a question of survival. ”The cotton industry is going to disappear if nothing is done. Ninety-five percent of our crop is exported in its raw state,” he laments.