A US intervention in the cotton industry in Africa will not see farmers benefiting from millions of dollars, argues Floor Incorporated Trade Attorneys' senior trade adviser Hilton Zunckel.

Zunckel is currently assisting the Swiss-based think tank, Ideas Centre, in supporting the West and Central African countries with their work on the WTO Cotton Initiative leading up to the Hong Kong Ministerial meeting to be held in December.

A high level trade and diplomacy team headed by US Secretary of Agriculture Michael Johanns and US Trade Representative Robert Portman visited Burkina Faso on November 10 with a view to addressing the WTO Cotton Initiative with the West and Central African countries, which Zunckel argues is certainly less than ambitious.

In Benin, the US announced the launch of the West Africa Cotton Improvement Programme (WACIP), which is aimed at the cotton sectors of Benin, Burkina Faso, Chad, Mali and Senegal.

The program is based on advice from USAID and the USDA, compiled in consultation with experts from these countries to improve production, transformation, and marketing of cotton in the region.

The US believes that the programme will provide an additional $5-million, bringing the total amount of aid from the US to $7-million.

There is however more to this, argues Zunckel.

Oxfam was very prompt in indicating that $2-million of the announced $7-million package is in fact a pre-existing commitment.

“In addition one would not be blamed for wondering whether the description 'million' should rather have been labeled 'billion' to give the proposal any real impact.”

He adds that, at $7-million once off, the US is providing West and Central Africa with the equivalent of what they pay their own cotton growers every 15 hours through each day of the year! “In essence this gesture is very limited indeed.” This is less than half of a single percent of what is paid in cotton subsidies in the US. These subsidy payments suppress global cotton prices and were ruled illegal by the WTO earlier this year. Reform of these subsidies is where the real assistance to African growers lies.

In addition, the US maintains that it will provide countries with assistance through its development agency - The Millennium Challenge Corporation (MCC).

The US is of the view that the MCC offers the most significant opportunity for many key countries to address long-term development obstacles in cotton.

The US argues this will result in hundreds of millions of dollars flowing into the region in grant form in a way set by recipient countries.

Zunckel disagrees, arguing that the MCC is not new or unique to cotton.

“It has been operating for near on three years now and is a US government agency providing aid generally, on the proviso that the assistance is only provided to those countries that 'rule justly, invest in their people, and encourage economic freedom'.”

He adds that the US Congress provided $1-billion in initial funding and President George W Bush requested $3-billion for 2006.

“It is interesting to note that this $3-billion is provided across a spectrum of 23 independent countries; while Congress provides $4-billion annually to a mere 25 000 US cotton growers.”

In addition, a country that is given the privilege of MCC funding eligibility does not mean that it will automatically receive the funds; it is only qualified to present the fund with a funding request for evaluation.

“This is what it means for Burkina Faso now joining Benin, Mali and Senegal as 'eligible' for MCC money,” Zunckel adds.

Currently these requests are bold: Benin's proposal stands at $300-million; Mali's proposal at $212-million; and Senegal's proposal at $255-million.