Burkina Faso: Cotton story
"How can we cope with this problem? Cotton prices are too low to keep our children in school, or to buy food and pay for health," Brahima Outtara, Burkina Faso.
The international cotton trade provides the best example of the damaging effects of commodity subsidies. Because American cotton producers get more federal subsidies with each additional bushel they produce, current farm programs encourage overproduction with the surplus dumped on the international market, lowering prices and undercutting the livelihoods of millions of poor farmers around the world.
Cotton subsidy reform could substantially improve the welfare of over one million West African households—10 million people—by increasing their incomes from cotton by 8 to 20 percent. For farmers living on less than $1 a day, this means more money for food, medicines, school fees, and fertilizer—more money to help sustain lives and livelihoods.
A typical cotton producing household in West Africa has about 10 family members, an average life expectancy of about 48 years and an adult literacy rate of less than 25 percent. Cotton is often the only source of cash income for these families who live on less than $1 a day per person. Added income from increased cotton prices could make a world of difference.
With a complete removal of US cotton subsidies, the world price of cotton would increase by 6-14%, prices that West African farmers would receive for their cotton would increase by 5-12%. At the household level, this increase would result in additional income that could cover all health care costs of four to ten individuals for an entire year, or schooling costs for one to ten children, or a one year supply of food for one or two children.