A Tale of Two Cotton-Pickin' Farmers
Gillian Virata

Terry Pepper and Hamidou Coulibaly have never met, and since they live 6,060 miles apart, they are not likely to. Yet something, over which neither of them has any control, distresses them both-the low price of cotton.

Terry and Hamidou are both hard-working cotton farmers whose labors are either rewarded or punished by the world price of cotton. However, since Terry's farm is in the United States and Hamidou's is in Mali there are marked differences in the ways they farm, live, and reap benefits from their harvests.

Cotton Farming in Texas
Terry runs a 1,500-acre farm, which has been in his wife's family since 1926. (A football field is about half a hectare.) He uses four 140- to 180-horsepower tractors to cultivate his fields. These are "medium-age" tractors, he says, "not new, not fancy, because those would be too expensive." The tractors can plow nine rows wide, which is about 30 feet across.

With the world price of cotton staying low for an unusually long period of time (33 months) in the 1990s, Terry shifted to organic farming "hoping to find a niche market for cotton that was not controlled by global traders and politics." But because of the high cost of labor for weed control, his production cost remains at $110 an acre, about the same as conventional, nonirrigated cotton in neighboring fields.

The drought that has hit O'Donnell, Texas for the past 10 years or so has negatively impacted Terry's yield. His yield, at 172 pounds an acre, is well below the yield of the average American farmer, which is about 700 pounds an acre. His cost of $0.64 a pound, however, is not far from the average cost of American farmers of $0.73 a pound, by African estimates.

American farmers have spent more to produce a pound of cotton than what they could get for it in the world market. They have depended on subsidies from the U.S. government to maintain their farms. According to the International Cotton Advisory Committee, the U.S. government spent about $3.2 billion in 2002-2003 to support the cotton industry.

"As a producer, I don't like subsidies," says Terry. "It would be nice to a make a little profit [without subsidies]." But without subsidies, he conjectures, "production in the U.S. will eventually evaporate." In his view, this poses a risk to the country in the event the supply of cotton from elsewhere gets cut off.

For Terry, the future is "a little scary." He could, if needed, fall back on his training as an accountant. But he "hopes and prays" he can continue to work on the farm. If, for some reason, he had to stop farming, half of the farm, which is rented, would stay with its owners. "Since in our area there are not really alternative options at this point, we would either sell or rent our own land, most likely to another cotton farmer.

Subsistence Farming in Mali
Hamidou lives in Mali, one of the 10 poorest countries in the world. Most of Mali's 12 million citizens are subsistence farmers, and Hamidou is no exception. This means he depends on his farm for everything he and his family needs. He grows corn and millet for their food and cotton for spending money.

Hamidou's "farm" is 17 acres and he grows about 357 pounds of cotton an acre. In 2002, his earned just $500 for his entire cotton crop after paying for fertilizers, insecticides, and other expenses.

"What we get is not enough," Hamidou explains. "We have to pay taxes, and I have to pay for clothes and medicine. I have children who go to school. I have to pay for their clothes and their school supplies."

Fred de Sam Lazaro, correspondent of The NewsHour, reports that Hamidou had to borrow money "to support his extended family of 40 members." Some of Hamidou's neighbors were worse off, having to sell their important draft animals to make ends meet or to borrow $30 (10% of their annual income) to buy medicine.

Most African farmers work on small plots, usually ranging in size from less than 2.5 acres to about 17 acres. They work barefoot and use hoes, with their large families working alongside them. Their hoes are made by blacksmiths from scrap metal-they have short handles and a blade that is just a couple of inches wide.

Some of the more advantaged communities have a single plow, which they share. They still have draft animals, an ox, or, in poorer communities, a donkey. Most communities in neighboring Burkina Faso, for example, are too poor to even have a draft animal. An animal, they say, "makes the difference between night and day."

Many Africans still farm in much the same way their fathers and grandfathers did before them. But while their methods may be less efficient than those of American farmers, they also cost much less.

African farmers can "produce cotton at less than 50 cents a pound" reports Marc Lacey in The New York Times, quoting figures from Burkina Faso. This is more than $0.20 a pound lower than the
cost of producing cotton in the U.S. And yet,

because the low price of cotton persisted through the 1990s and into 2003, for some time African cotton farmers have not earned enough to support their families.

Connected by Subsidies and Price
And here is where Terry and Hamidou's lives are intertwined. Because of low world prices, the U.S. government subsidizes the farms of cotton farmers like Terry. These subsidies encourage them to keep growing large amounts of cotton, keeping the world supply of cotton very high and, in turn, depressing prices. The low prices then cause the U.S. government to increase its subsidies, and a vicious circle continues.

Terry and other farmers in Organic Exchange, an organization representative of the organic fiber industry, often discuss the global effects of U.S. subsidies.

"It's hard to compare apples and oranges; they work under different conditions," he says.
"[They] can produce a pound of cotton cheaper than I can, but [they] also do not have to pay for regulations imposed by government that help maintain the standards of living we all enjoy in the US. So I see subsidies as a way for our government to level the playing field for global marketing of my fiber while maintaining the current standard of living of all Americans."

Some African farmers conclude that President Bush helps himself to cotton subsidies, as some African leaders have been known to do with government funds. The American system of lobbying, campaign contributions, and special interest groups has, perhaps, yet to be explained to Hamidou and his fellow farmers.

However, such an explanation would do little to help Hamidou's plight. In 2001, the life expectancy in Mali was 48.4; in the U.S. it is 76.9. And with a literacy rate in Mali of 26.4, meaning less than 3 out of 10 persons above the age of 15 can read and write, Hamidou's options are limited.

The World Bank, the IMF, and the International Cotton Advisory Committee have concluded that removing direct subsidies in all countries would cause the world price of cotton to go up by $0.31 a pound. If the U.S., as the world's largest cotton exporter, continues to subsidize its cotton farmers, the price of cotton will remain low.

For Terry, removing the subsidies could eventually mean losing a way of life that he cherishes. For Hamidou, if the subsidies stay, life will continue to be a struggle to survive, and he will consider himself lucky if he lives beyond the age of 52.

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Gillian Virata is a consultant for the World Bank.

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