World Trade
Farmers in the USA receive $ 3,900 million of tax payers' money per year to grow cotton. This allows them to produce cotton for $1.06 per kg.
The low cost of this cotton puts cotton growers in Africa out of business. The unsubsidised cost of cotton is $1.72. The West African countryBenin loses 1.4% of its annual income every year due to the USA subsidies. This leads to 33% of its population having a life expectancy of only 48 years. The USA subsidy is three times the amount of aid given by the USA to the whole of Africa.
The contrast is shown by the story of two farmers:
- David Griffin grows cotton on 30,000 acres of land that his family owns in the USA state of Arkansas. His company received over $ 24 million in subsidies between 1995 and 2003. The family live in a home worth $ 1million (2005) and own several businesses. In the USA, the larger farms get a bigger subsidy.
- Michael Ahinon has a 20 acre farm in the village of Kotokpa in Benin. With no government subsidy, his cotton growing business struggles to make a profit.
Chicken farmers in Europe benefit from subsidised grain. This puts countries like Senegal and Ghana at a disadvantage. European countries receive subsidies for growing tomatoes. Countries in West Africa have been forced to dismantle their tariffs against European tomatoes by pressure from theWorld Trade Organisation. The result is that many African tomato growers go out of business.
Europe subsidises fishing boats that ply the waters of the African coast where royalties of less than 1% are paid. The local fishing industry cannot compete and fishermen go out of business.
Kenya can export pineapples to Europe without incurring tariffs. If the pineapples are made into chunks and tinned, they face a tariff of 27%.
Sugar prices in Europe are three times the world average. However, subsidies mean that sugar can be exported to Africa at 40% of the cost of production. South African sugar producers cannot compete.
