NCPA - National Center for Policy Analysis

Cotton Subsidies Wreak Havoc

August 5, 2003

Americans send some of their finest young people to places like Burkina Faso, a small landlocked country in the West African Sahel, where there are almost 80 Peace Corps volunteers. The United States also backs debt-forgiveness programs for Burkina Faso and other types of economic assistance.

But the good accomplished by volunteers and millions of dollars in aid is overwhelmed by the havoc wreaked by Washington's bloated cotton subsidies, according to the New York Times:

  • Washington spends between $3 or $4 billion a year in taxpayer money to grow cotton worth less than that and sells its mounting surpluses at an ever greater loss.
  • By cutting generous checks to 25,000 American cotton farmers whose average net worth is nearly $1 million, Washington underwrites massive overproduction -- causing depressed global prices and a harvest of poverty for Burkina Faso's two million cotton farmers.
  • If the United States terminated its cotton subsidies, commodity prices would rebound to more realistic levels, allowing third-world cotton farmers to compete and earn a profit on their crops.
  • By terminating trade-distorting farming subsidies, Washington would defuse a potent source of feverish anti-Americanism.

Burkina Faso's hand-picked cotton is the cash crop that permits smallholder farmers to buy fertilizer and invest in the other crops that get rotated on the land. If cotton doesn't sell at a decent price, it affects everything else, says Francois Traore, president of Burkina Faso's National Cotton Producers Union.

Source: Editorial, "The Long Reach of King Cotton," New York Times, August 5, 2003.  


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