Tuesday, February 08, 2011

Cotton Price Supports

Back in the day, Oxfam was waging war against US cotton farm programs on behalf of the African cotton growers (in Burkina Faso, etc.). The argument was the program encouraged US farmers to produce at lower prices, making it impossible for African growers to make a profit.  This was when the cotton price was $.55 or so a pound.

Today, according to this piece by Philip Brasher (hat tip Farm Policy) Oxfam's man in Africa is seeing possibilities for African growers:
Cotton isn't a food crop, but farmers in places such as Mali or Senegal in west Africa could do quite well if cotton prices hold up, Hazard [Oxfam representative] said in a phone interview from Dakar, Senegal. A jump in world cotton prices last year came too late to really benefit farmers as much as it could have, because they have their crop under contract by the time they plant, he said. The world price of cotton shot from 90 cents in August to $1.68 in December, according to the National Cotton Council.
Some west African farmers may switch some of their land from food production to cotton to take advantage of the prices, Hazard said.
 Elsewhere in the piece Hazard notes high food prices may force the poor to cut back on their consumption.

Two observations, after I admit I'm no economist:
  • Last I knew the US cotton program wasn't significantly changed.  Matter of fact Brazil won compensation from us via the WTO. So this big turnaround for cotton means there's other forces at work, stronger forces at work, than simply bad, no-good, unwise, even evil US farm programs.
  • If the high cotton prices will elicit more cotton production from African growers, so eventually might the high rice, etc. prices elicit more rice production.

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