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Helping Africa: Pull the Plug on $3 Billion in Annual U.S.Taxpayer Subsidies to "King Cotton"

What Africa Really Needs

Pulling the plug on subsidies for U.S. agribusiness could mean economic
independence for Africa.

Robert B. Reich

July 08, 2005

Robert B. Reich is the Maurice B. Hexter Professor of Social and Economic
Policy at Brandeis University, and was the secretary of labor under former
President Bill Clinton.

The average income per person in Africa is 11 percent lower today than it
was 40 years ago.

That¹s the bad news. Here¹s the good: Ministers from the world¹s eight
richest nations agreed last month to write off $40 billion in debt owed by
18 of the world¹s poorest nations, mostly in sub-Saharan Africa. African
countries now spend up to 40 percent of their budgets on debt repayments,
more than they spend on health or education. So debt relief will make a big

And this week, the heads of the G8 nations getting together in Gleneagles,
Scotland, hope to forge an agreement to double foreign aid to Africa to an
eventual $25 billion a year.

But neither debt relief nor direct aid will give Africa and other poor
nations what they really need to rise steadily out of poverty. They need to
export what they can grow them when the world market is glutted with sugar and cotton from richly
subsidized American and European agribusinesses.

Last year, the United States paid our cotton growers $3.2 billion in
subsidies. That comes to about half a million dollars per farmer. These
aren¹t family farms, for the most part. They¹re giant agribusinesses. These
big businesses argue that without the subsidies the United States would lose
its cotton industry and we shouldn¹t rely on other nations for a vital
material like cotton.

Now, I can understand the problems of depending on foreign oil. But cotton?

Cotton is about the only cash crop that can grow in places like Burkina
Faso, Mali and Benin, on the southern edge of Sahara. But with the United
States subsidizing our cotton agribusinesses, the typical farmer in West and
Central Africa now earns less than $400 a year. The 12 million people there
who rely on cotton production are struggling to survive.

End rich-nation farm subsidies, and Africa and other poor nations have a
fighting chance. Oxfam estimates that if Africa boosts its share of world
exports by just 1 percent a year, it will earn an additional $70
Look, even if you¹re not particularly concerned about reducing world
poverty, you might still want to stop subsidizing our giant
agribusinesses than $19 billion this year. That $19 billion could go instead to better
schools for our kids here in America, better health care for our children, a
smaller budget deficit.

President Bush says he¹ll push to end farm subsidies stops subsidizing its own farmers. Why wait for them? America should take
the lead. Set an example. Don¹t depend on Old Europe. Make a pre-emptive
strike on behalf of the world¹s poor.