Letter from Saskatchewan

Without sustainable alternatives,
ending subsidies only shifts misery

By Paul Beingessner


Meet Paul

Saskatchewan farmer Paul Beingessner has missed only a handful of deadlines in writing a weekly column during the past eight years. He covers Canadian agriculture from a High Plains perspective. His straight-talk style informs readers about corporate influence in national and international agriculture, national ag politics on both sides of the border, and why some farmers do the things they do. Click here for more information about Paul.


TRUAX, Saskatchewan, Canada, October 2, 2003: "Oh, I wish I was in the land of cotton." So begins the popular Confederate song from America's civil war era. I don't imagine a lot of Canadian farmers today spend much time thinking about the land of cotton, but you can bet there are farmers all over the world that do. Cotton, you see, is a commodity that epitomizes the struggle that sank the WTO efforts at Cancun, Mexico.

Cotton is the main agricultural export for some of the world's poorest countries. Mali is a good example. With an average income of $300 per year, this African nation of 9 million is one of the 10 poorest countries in the world. About one-third of the population relies on cotton production for its income. Traditionally, cotton production has been good to the small-scale farmers that grow it. A typical farmer used to earn an income of about $1000 per year - three times the national average. Income from this exported crop drove the economy of Mali, providing money for health care, education and development.

But the bloom is off cotton. For two years, world prices have been at rock bottom, as production has outstripped demand. Cotton prices have fallen by 50 percent since the mid-1990s. Cotton producing countries in sub-Saharan Africa, countries like Mali, Benin, Burkina Faso and Chad have suffered severe economic losses as a result.

This is not to say that all cotton farmers are doing poorly. In the "land of cotton", the southern U.S., many cotton farmers are doing rather well, thank you. This is not from the sale of their production, but rather from the subsidies the government pours into their pockets, subsidies that average $230 U.S. per acre. Thus, in 2001/2002, the 25,000 American cotton farmers pocketed nearly $3.9 billion in subsidies. This is more than the entire GDP of Burkina Faso, where 2 million people depend on cotton for a living. Just 10 of these American cotton farms received a total of $17 million in subsidies. And they still had their cotton to sell after that!

It is not hard to see why poor countries dependent on cotton production were front and center in the group of countries that effectively ended the chance for success of the world trade talks in Cancun. In their eyes, American and European subsidies encourage cotton production and result in these countries dumping cotton on world markets below the cost of production. In doing so, the enrichment of 25,000 American farmers contributes to the impoverishment of millions of farmers in poor countries and the devastation of the economies in those most heavily dependent on this product.

The complaints of poor agriculturally-dependent countries do not end with cotton. Sugar producers in the U.S. and Europe are protected behind huge tariff walls that keep prices in these markets high and keep poor countries like Mozambique out. An end to subsidies like these was a key demand of the Group of 21 developing countries in Cancun. It is also a key demand by international agencies like the World Bank and development organizations, including those working under the United Nations.

Such demands pose a dilemma for farmers in countries like the U.S. and Canada. Many farmers cannot help but sympathize with the plight of their fellow farmers around the world. As much as we love our way of life, we know that its failure would not mean that we, or our children, will starve, a situation that occurs in Africa. Yet, farmers know that opening our markets to imports from poor countries will cause our prices to fall. Relieving the dire circumstances of some third world farmers could come at the cost of our own viability. It would, at the very least, mean we would have to dramatically restructure parts of our industry.

Lifting fellow human beings from dire poverty is a laudable, indeed essential humanitarian goal, one whose long delay is an affront to our claim to be civilized. However, it cannot fall solely on the backs of farmers in developed countries. A policy that simply opens world markets and reduces subsidies, without dealing with a myriad of other issues, would simply shuffle the misery around. It would not deal with the domination of agriculture worldwide by a handful of agribusiness corporations. It would not ensure stable, sustainable production in any country. It would, in fact, simply continue to pit farmer against farmer in a game that no one wins. No one, that is, except those who have always grown rich from someone else's labor.

© Paul Beingessner, beingessner@sasktel.net . The author is a columnist, transportation consultant and third-generation farmer in Truax, Saskatchewan.