Fields of conflict over US cotton

By James Westhead
BBC News, Lubbock , Texas

Here in Texas they call it white gold.

The never-ending fields of fluff are said to have created more wealth, and more misery throughout history than almost any other legal crop.

The ubiquitous fibre sustained slavery, triggered industrial revolution in Britain and civil war in America .

Now cotton is at the centre of a new war.

This time it is between the richest and the poorest nations on earth, as US cotton subsidies become the symbol of global trade inequity and a key battleground at this week's world trade talks in Hong Kong .

Billions in hand-outs

On the front-line of the cotton war stands Rickey Bearden - a cotton grower surveying his family's 6,000 acre farm on a bright winter's day near Lubbock in northern Texas .

Mechanical cotton harvesters scour the fields fitted with on-board computers, global-positioning satellite monitors and air-conditioned cabs.

It is a highly-mechanised, highly-efficient operation. In one day each can reap enough cotton to make 200,000 T-shirts for high street shops.

Yet despite this ruthless efficiency - like the rest of the American cotton industry he cannot compete on the world market without a big helping hand.

Mr Bearden gets up to 20% of his income - not from cotton - but in subsidies from the US government.

It is part of a $4bn-a-year hand-out to his industry already partly ruled illegal by the World Trade Organization and now African countries at this week's talks want them cut further.

Mr Bearden is worried.

He says, "It would be devastating not only for cotton producers like me but for the whole economy here in Texas . So much is intertwined with cotton - the men who work for me, the men who work in the gins and their families would suffer."

Unfair trade

Yet half a world away in impoverished sub-Saharan West Africa , trade campaigners say 20 million small cotton farmers are suffering now.

Although they work small plots with primitive equipment, ironically their handpicked cotton is better quality.

Yet due to the subsidised US fibre swamping the world market they cannot get a good price.

The aid charity Oxfam estimates they lose 26% of their potential income due to the subsidies. It claims in Benin alone 60,000 farmers have given up farming because they cannot compete against artificially low prices.

Oxfam's senior policy adviser Gawain Kripke, lobbying at the talks in Hong Kong , argues: "Cotton subsidies are having a negative impact on millions of farmers in developing countries.

"These poor farmers are getting less for their cotton. The countries that export cotton are getting less revenue and getting deeper into debt and farmers individually can't afford basic things like health care and even food in some cases."

He calculates that the US spends almost three times as much on subsidies for cotton as it does on aid for the whole of Africa and argues the harm done by unfair trade cancels out any benefits from aid.

High plains Texas

Cotton is likely to prove one of the most contentious issues at this week's talks.

Four of the poorest African cotton-producing countries Mali , Chad , Benin and Burkina Faso have submitted a formal demand to the WTO that US subsidies are harming them so severely they should be eliminated altogether.

In the cotton gins of the high plains of Texas this kind of suggestion is less than welcome.

The cotton industry disputes all Oxfam's claims. It strongly denies that the US financial support for cotton distorts the world market or that scrapping their generous subsidies would make trade any fairer.

The spokesman for the Plains Cotton Growers, Roger Haldenby, insists, "taking support away from our cotton would hurt American farmers but it wouldn't help African farmers one iota".

"The slack in world production would soon be taken up by other big producers like China and Pakistan , the price would fall back again and the poor African farmers would be no better off."

Irony of cotton trade

The president of American Farm Bureau Federation, Bob Stallman, who is in Hong Kong advising the US negotiating team, insists cotton should not be separated off from all the other agricultural trade issues.

He argues any deal on reducing US subsidies would have to be tied to Europe cutting tariffs to open up new markets for his members.

He says cutting cotton subsidies without such a "quid pro quo", was "a political impossibility" and admitted there was little prospect of any agreement.

However back in Lubbock , the irony of the cotton trade is clearly on display in the local clothes shops.

They are full of T-shirts and jeans manufactured from locally grown cotton.

Yet on closer inspection their labels reveal a United Nations of "Made in ..." everywhere from China to Indonesia and from Vietnam to Honduras .

American subsidies have paid for the cotton to be exported half-way round the world only for it to be shipped back home again as T-shirts to be sold to the very Americans who grew it in the first place.

Story from BBC NEWS: http://news.bbc.co.uk/go/pr/fr/-/1/hi/business/4525380.stm