Fairtrade Foundation report reveals $47bn subsidies locking West African farmers in poverty

15 November 2010

Fairtrade Foundation report exposes devastating effects of rich nations’ protection

Cotton: the most used natural fibre in the world should be the 'white gold' that propels 10 million West African farmers out of poverty.

After all, the West African nations of Benin, Burkina Faso, Chad and Mali, know as the Cotton-4 (C-4), produce the cheapest cotton in the world.

But a major new report from the Fairtrade Foundation today reveals how the West African cotton industry is blocked by a wall of free cash dished out by the United States and European Union to their farmers.

Combined, the US and EU lavished $31.45bn over the past nine years on their cotton farmers so dampening down global cotton prices, reducing demand for West African cotton and restricting their ability to export their way out of poverty, so perpetuating reliance on aid.

The EU pays out $2.51 per pound of cotton to support its 100,000 cotton growers, which is more than the market price for cotton.

It is estimated that lost income to West African cotton producing nations through the price dampening effect of subsidies totals $250m each year.

The Great Cotton Stitch-Up will be published three days ahead of the European Commission’s proposals to reform the €50bn common agricultural policy through which cotton subsidies are disbursed.

It is understood the EU draft will not include reform of its $7bn cotton subsidy regime.

The Fairtrade Foundation is launching a campaign demanding the EU scraps its trade distorting cotton subsidies in a move that would isolate the US which dishes out $24.25bn to just 3,500 farms. One farm has received $24m in handouts over the past 14 years. The report focuses on the powerful US cotton lobby which funds American politicians, as well as detailing the challenges faced by the C-4 which are among the least developed countries on earth.

Harriet Lamb, executive director of the Fairtrade Foundation, said:

'This report reveals one of the greatest trade injustices of our time. Ten million farmers are locked into poverty while trade distorting subsidies are paid out by the EU and the US. It is incredible that EU cotton subsidies are worth more per pound than what cotton trades for on global markets. This is why we are calling on the EU to eliminate its cotton trade distorting subsidies and to include this urgently needed measure in the new Common Agricultural Policy reform process launching this week.

'In Mali, we’re working with one co-operative of 8,000 members who have been able to earn 50% more by producing and selling organic Fairtrade cotton. As a result, 95% of their children are enrolled in school compared with a national average of 43%. This is what a small uplift in farmers’ income can achieve. It is time to end the Great Cotton Stitch-up.'

Daouda Samake, a farmer and member of the Mobiom Fairtrade cotton-growing co-operative in Southern Mali, said:

'Cotton is our only income. These (US subsidies) are the reason we’re not producing as much cotton. Mali cotton farmers are hardly able to cover their living costs. They’ve got a lot of debts and so people are walking away from cotton. That makes me really angry. If it was you, what would you think? The economy of the country suffers. Mali is hugely dependent on cotton. It obviously hurts the economy if there are less people producing cotton. It’s the main export for Mali and the state does not have funds to pay for healthcare and education.'

The C-4 were seen as the quintessential example of grievous trade injustice when, in 2001, world superpowers started negotiations to frame new global trade rules.

In the shadow of 9/11, the Doha Development Round was meant to help poor countries access world markets.

But as we enter the tenth year of Doha negotiations, the Great Cotton Stitch-Up shows little has been achieved to help the C-4 trade their way out of poverty.

Please find the full report here
The Great Cotton Stitch Up The Great Cotton Stitch Up

Read the reports major findings
Main Findings of The Great Cotton Stitch-Up Main Findings of The Great Cotton Stitch-Up

Read more about Fairtrade Cotton here

– ENDS –

Eileen Maybin
Head of Media Relations
020 7440 7686/07770 957 451
eileen.maybin@fairtrade.org.uk

Martine Julseth
Media and PR Manager
020 7440 7695/07825 827 791
martine.julseth@fairtrade.org.uk

Faith Mall
Media and PR Manager
020 7440 8597/07766 504 947
faith.mall@fairtrade.org.uk

Neil Martin
Assistant Press Officer
020 7440 7620
neil.martin@fairtrade.org.uk


Notes to Editors
1. The FAIRTRADE Mark is a certification mark and a registered trademark of Fairtrade Labelling Organisations International (FLO) of which the Fairtrade Foundation is the UK member. The Fairtrade Foundation is an independent certification body which licenses the use of the FAIRTRADE Mark on products which meet international Fairtrade standards. This independent consumer label is now recognised by 72% of UK consumers and appears on products as a guarantee that disadvantaged producers are getting a better deal. Today, more than 7.5 million people – farmers, workers and their families – across 58 developing countries benefit from the international Fairtrade system.

2. Over 4,500 products have been licensed to carry the FAIRTRADE Mark including coffee, tea, herbal teas, chocolate, cocoa, sugar, bananas, grapes, pineapples, mangoes, avocados, apples, pears, plums, grapefruit, lemons, oranges, satsumas, clementines, mandarins, lychees, coconuts, dried fruit, juices, smoothies, biscuits, cakes & snacks, honey, jams & preserves, chutney & sauces, rice, quinoa, herbs & spices, seeds, nuts & nut oil, wines, beers, rum, confectionary, muesli, cereal bars, yoghurt, ice-cream, flowers, sports balls, sugar body scrub and cotton products including clothing, homeware, cloth toys, cotton wool and olive oil.

3. 7 in 10 households purchase Fairtrade goods, including an extra 1.3 million more households in 2008, helping Fairtrade sales reach an estimated £700m in 2008, a 43% increase on the previous year. There are over 460 producer organisations selling to the UK and by the end of October 2008 872 certified producer groups were in the global Fairtrade system, representing more than 1.5 million farmers and workers.