7th November 2011

Spinning the Threads of Poverty: how US cotton subsidies cause poverty and trafficking in Southern Benin

Guest article from Neil Howard, a PhD student writing his thesis on anti-trafficking discourse and policy at the University of Oxford.

In 2003, Benin and a small group of cotton-producing African nations took a complaint to the World Trade Organization (WTO) citing massive economic evidence that US cotton subsidies reduced national and household incomes. Noting that US subsidies to 25,000 cotton conglomerates totaled three times the entire USAID budget for Africa’s 500 million people, the plaintiffs demanded the immediate cessation of subsidies and compensation for their lost national incomes.

Though in a separate case the WTO ruled that US subsidies did indeed affect global prices, US negotiators refuted any correlation between reduced prices and lost national or household income in countries such as Benin, and placed pressure on friends and foes alike to ensure that the African initiative was ultimately dropped.

In this article, I will present evidence from my research that challenges the US position. In fact:

  1. US claims of non-causality are false – it is demonstrably true that the effect of subsidy-reduced cotton prices is felt at the level of the farming household,

  2. US subsidies have thus impoverished many vulnerable rural households and this in turn has led to an increase in the labor migration of the young, including into work that has been classified as trafficking, and is often experienced by the young themselves as exploitative.