Chicago Tribune: End to subsidies is best aid for Africa
The United States government last year paid 7,500 of the country's biggest cotton growers $3.2 billion in production subsidies - nearly a half-million dollars per farmer on average. The subsidies are necessary, producers argue, because foreign cotton growers, in places like West Africa and Brazil, can grow cotton much more cheaply than those in the United States. Without the help, they argue, they would be out of business.
Europe, similarly, pays about $3.2 billion dollars a year in subsidies to its sugar producers, guaranteeing them prices for their crops that - like cotton in the United States - give them an income three times higher than what they would get selling their products on an open world market.
The subsidies promote overproduction, cost taxpayers billions and artificially push down crop prices worldwide. In Africa, where governments can't afford to give their farmers such assistance, the subsidies create a disaster.
In dry countries like Burkina Faso, Mali and Benin, perched on the southern edge of the Sahara, cotton is about the only viable crop. Growers there can produce it at about a third of what it costs in the United States, according to Oxfam, a British anti-poverty group. In a free-trade environment, the growers would be able to boost their sales, their families' income and the welfare of their extremely poor countries.
But subsidies to U.S., European and even Chinese cotton farmers mean the 10 million people who rely on cotton in West and Central Africa are struggling to survive, hit by unfair competition and artificially low world prices for cotton. They're eager to improve their plight through trade rather than aid, as the wealthy world has long urged. It's just that the rich nations won't let them.
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One of the ironies of rich-world agricultural subsidies is that they hurt even the rich nations themselves. U.S. taxpayers each year hand over $19 billion in agricultural subsidies primarily to a small pool of already wealthy corporate farmers.
