Women in Zorro village, Burkina Faso, desseding their cotton. But what chance have they got in global commodity markets that are systematically rigged against them? Photo: CIFOR via Flickr (CC BY-NC).
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GM cotton: a false promise for Africa's farmers
27th August 2015
The idea that GMO cotton offers hope to Africa's impoverished cotton farmers is facile and fraudulent, writes Arya Tajdin. In fact it only adds to their vulnerability. Their real problems lie in the structural oversupply of subsidized cotton on world markets, and the flood of 'kifua' - dead white man's clothing - that undermines the continent's textile industries.
Africa is still a plantation and mining economy trapped in the Colonial Pact. Over fifty years after 'independence', Tanzania and other African countries still 'produce what they do not consume and consume what they do not produce.'
Monsanto and the biotech industry claim and argue that genetically modified cotton is the desperately needed panacea to revive Africa's cotton sector.
However, GM cotton neither addresses nor resolves the root economic, structural and political causes behind the collapse of the cotton sector in Africa.
Furthermore, simply increasing cotton yields and production in a context of structural oversupply of cotton on the world market will further depress cotton prices and therefore further worsen the economic plight and suffering of hundreds of millions of small-scale cotton farmers in Africa.
There is intense political lobbying and pressure by Monsanto, the biotech industry and their acolytes to introduce genetically modified cotton in Africa as a 'panacea' to revive the cotton sector. A recent paper published by the African Centre for Biodiversity (ACB) gives a brief informative overview of the industry pressure and agenda to introduce GM cotton in Africa.
Monsanto, the biotech industry and their associates claim that GM/Bt cotton - which expresses an insecticidal toxin - increases yields, decreases pesticide use, and so raises farmers' incomes and profitability.
In fact the exact opposite is true, and several independent studies and empirical evidence have clearly and repeatedly debunked this fraudulent claim. For example, the Bt varieties offer no advantages in rain-fed cotton cultivation. Indeed they only add to the cost of inputs and increase farmers' vulnerability to poor rainfall.
Moreover cotton pests have naturally and predictably developed resistance to Bt cotton. As a result, cotton farmers have to increasingly use more expensive and toxic pesticides to combat pest resistance, increasing production costs and reducing profitability, often to the point of outright loss.
India's farmer suicides - a warning for Africa
We have of course also heard and read about the infamous and tragic waves of mass suicides of Bt cotton farmers in India, rightly termed "genocide" by Vandana Shiva. In fact, according to official statistics from the government of India, over 200,000 indian cotton farmers have tragically committed suicide in India over the last decade. As Vandana Shiva herself writes:
"Every suicide can be linked to Monsanto. Monsanto's GMOs do not improve farmers' lives. They have pushed farmers to suicide. Over 200,000 Indian farmers have committed suicide in the last decade. 84% of the suicides in Vidharbha, the region with highest suicides are linked to debt created by Bt-cotton.
"While Monsanto claims its GMO Bt cotton gives 1500 Kg/acre, the average is 300-400 Kg/acre. The claim to increased yield is false because yield, like climate resilience is a multi-genetic trait. Furthermore, pesticide use has increased 13 times as a result of the use Bt cotton seeds in the region of Vidharbha, India.
"GMOs are non-renewable, while the open pollinated varieties that farmers have bred are renewable and can be saved year to year. The price of cotton seed was Rs 7/kg. Bt cotton seed price jumped to Rs 1,700/kg. This is neither ecological nor economic or social sustainability. It is ecocide and genocide."
Monsanto and the biotech industry of course vehemently deny any responsibility in this 'genocide'. But I wish to move beyond the debate and the outcry to identify, address and resolve the root economic, structural and political causes behind the collapse of the cotton sector in Africa, India and around the world.
Going back to the root causes - systemic oversupply
According to King's Law of Demand, a surplus / deficit in a commodity will lead to a proportionally greater decline / increase respectively in the price of the said commodity relative to the surplus or deficit. In other words, a surplus of 10% in the supply of cotton will lead to a decline of more than 10% in the price of cotton, and vice-versa.
So to make up for the loss in revenue resulting from structural over supply of cotton on the world market which result in constantly declining real prices of cotton, farmers are being pushed into producing ever more cotton.
In turn this creates a further excess of cotton on the world market, further reducing both lint and farm gate prices of cotton, thus further marginalizing and impoverishing both cotton farmers and cotton producing and exporting nations.
As the Brandt Commission wrote and warned over 30 years ago: "Structural over-supply in the commodities market lies at the heart of global poverty and instability." (Willy Brandt, Brandt Report).
Promoted by Monsanto, parroted by their political and agribusiness devotees, and forcefully imposed and dictated by the International Monetary Fund (IMF), the World Bank and so-called 'donors' to African countries, the policy is to create systemic oversupply of 'cash crops' such as cotton, coffee and cocoa.
Their deliberate overproduction and export in raw, unprocessed form, is used to loot the poor countries of their raw materials at low prices, for added value processing and high cost consumption in affluent countries - while plunging entire countries and continents into debt slavery and economic servitude.
The vagaries of the market?
Furthermore, there are several other exogenous economic, structural and political factors which individually and collectively influence and determine the price of cotton on the world market and the profitability of cotton farmers, which GM/Bt cotton does not address nor resolve.
For example, farmers in poor countries are competing against highly capitalised producers whjo are cushioned by illegal US/EU cotton subsidies of some $5 billion / year. These artificially stimulate production in the US/EU which leads to structural oversupply of cotton on the world market. The excess production is 'dumped' on the world market - sold below the cost of production).
This results in the collapse of both cotton lint and farm-gate cotton prices. As a result, hundreds of millions of small-scale (non-subsidized) cotton farmers cannot profitably produce and sell their cotton on the world market, in spite of having an Absolute Comparative Advantage in producing cotton, and sink deeper into endless poverty, hunger and misery.
Also, cotton lint is sold in US dollars on the world market. This can sometimes work to the farmers' gain when the dollar is strong, however it also leaves farmers vulnerable to unpredictable prices falls.
Similar considerations apply to the price of oil, fertiliser and other inputs. Sometimes farmers may benefit - but never so much as to build up a secure cushion against future failures. So when they do lose out, as inevitably they must with the odds stacked against them, many lack the resources to survive the losses.
In addition the International Monetary Fund's (IMF) infamous Structural Adjustment Programs (SAP) have dismantled local subsidies to African cotton farmers / agriculture and liberalized and privatized the sector.
The World Bank has imposed suicidal economic policies on African countries, blindly followed to the letter by incompetent and corrupt so-called African 'leaders' which deliberately promote the monoculture, overproduction and export of cotton.
And so African economies and countries remain trapped in the Colonial Pact and in the vicious trap cycle of debt slavery, economic servitude, so-called 'aid' and unending poverty, hunger and misery.
Africa's leadership deficit
There is a sad but highly evident deficit of wise leadership, intelligent economic policies and political will from so-called African 'leaders' and governments to revive the sector, for example through policies to protect and support local cotton farmers and to promote local value addition and consumption of local cotton textiles to revive local industries.
Instead there is an absence of modern public and industrial infrastructure - in energy, industrial cotton processing machinery, transport - which translates into high costs in energy, production, processing and transport, often combined with high taxes, etc., which result in loss of competitiveness and profitability for cotton farmers, ginners, weavers and for the entire textile chain.
Another problem is the dumping of kifua - used imported clothing from rich countries which literally translates into 'dead white mens' clothing' in Swahili - on African markets, which destroys the local cotton and textile industry.
Again this undermines local value-addition in cotton producing countries. Over 80-90% of cotton is exported raw, with no local employment creation, no revenue generation, no wealth creation, no economic growth generated within the sector and in the economy as a whole.
Africa's exclusive reliance on cotton lint exports (80% - 90%) makes it entirely dependent on the dictates of the world market and the exogenous economic / structural / political factors over which Africa has no control.
So Africa's cotton sector remains trapped in the 'Colonial Pact': to export raw cotton at little or no profit, and import kifua - adding insult to economic injury.
Tanzania's 'kifua' economy
According to statistics published by the Tanzanian Cotton Board, the cotton sector in Tanzania used to provide employment to over 40% of the population, contribute 15%-20% to the GNP and was the second largest source of foreign exchange.
The cotton and textile sector in Tanzania - as in all cotton producing and exporting countries in Africa - has entirely collapsed following the IMF's infamous Structural Adjustment Program and the destructive tsunami wave of liberalization and privatizations that followed.
Over 80% of the cotton produced in Tanzania is exported as raw lint. According to statistics published by the Tanzanian Cotton Board, the Tanzanian government generates on average $US 40 million annually in cotton lint exports, but annually imports over $US 80 million of textiles and garments. Of this 62% constitutes kifua, which destroys the local cotton and textile industry.
As the late President of Tanzania Julius Nyerere said: "Africans produce what they do not consume and consume what they do not produce. That has become the basis for African economic enslavement." In fact, the architecture of African economies has not changed over the last +100 years, since the infamous Berlin Conference.
Indeed, Africa is still in its essence a plantation and mining economy trapped in the Colonial Pact. And sadly, over fifty years after 'independence', Tanzania and other African countries still "produce what they do not consume and consume what they do not produce."
Our task must be to identify, address and resolve the root economic, structural and political causes behind the collapse of the cotton sector in Africa, India and around the world.
Arya Tajdin is Founder and Executive Director at the Yajna Centre, Dar es Salaam, Tanzania. An economist by training. He also works as an independent economic analyst, researcher, writer, public speaker and consultant.
Author's note: I welcome your comments and ideas. Please email email@example.com.
Mission: Yajna Centre's aim is to build a non-violent economic architecture based on the foundation of Non-Violence laid by Mahatma Gandhi. As Gandhi rightly stated: "The extension of the Law of Non-Violence in the domain of economics means nothing less than the introduction of moral values to be used in regulating international commerce. You cannot build a non-violent society based on exploitation. Exploitation is the essence of Violence."
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