7055 AGRIBUS Paper 1
29 August 2014 Hannah Twine 1194821
Decline in world cotton prices effects on poverty in West African cotton exporting countries rural poverty.
Introduction
Over 2001-2002, world cotton prices fell by almost 40% as a response to government subsidies in market-dominators Europe, China and the United States, a trend towards using synthetic fibres, and economic downturn decreasing the demand for garments.
This paper will explain the price transmission between world cotton prices to the domestic prices in the West African ‘Cotton Four’ (‘C4’) countries of Benin, Mali, Burkina Faso and Chad. It will analyse the short- and long-term effects on domestic farmers’ income, the implications for domestic production of cotton and other relevant crops in these countries, and then look at the effects on the labour markets of these nations.
This paper will find that, in the long-term, spatial price transmission is present in the global cotton market and this both directly and indirectly affects farmers’ welfare in the C4 nations. This will be displayed through looking at the price elasticity of cotton. The paper will then seek to make recommendations for the C4 governments and relevant stakeholders such as agricultural associations to respond to global changes, caused by the transmission mechanism, more effectively
It is valuable to engage in conversations regarding the implications of policy and price transmission in agricultural markets as this can
Former president George Washington once said, “Agriculture is the most healthful, most useful, and most noble employment of man,” (George Washington Quote). Since Washington’s presidency, countless advancements and developments within the agricultural industry have allowed the United States to grow, develop, and become one of the most prosperous countries in the entire world. Nevertheless, this prosperity is also marked by several key historical events, such as the Agricultural and Industrial Revolutions, which have caused the core values and traditions that this great nation was built on to slowly disappear. Today, the majority of Americans have no knowledge, understanding, or appreciation for the agricultural industry, causing them to take for granted the basic necessities they rely on each day. This disconnection has created a gap between producers and consumers, which is known as
Agricultural subsidies is a very complex and controversial economic topic today. It will continue to be a hot topic as government continues it. It is largely debated in the United States as well as in other countries. The reason it is so largely debated is because it literally have an effect on the entire world market. Not to mention that the farm has been booming the last 5 to 10 years. This topic also tends to draw strong opinions in our area in particular due to the large agricultural community in our region. However, even within different states there are many supporters as well as opponents to these government subsidies.
During the time of the Civil War, there were slaves working on farmers, these slaves were not compensated for their labor and services and were producing cotton for a little to nothing cost. Since the Civil War, America has produced an immense amount of cotton and would export it to different parts of the world. America has also had enough workers to meet the exact supply and demand, which follows the demand policy. Correspondingly, the manifest destiny caused for cotton growers further west. Due to the cotton growers going further out west, cotton became easier to grow and easier to protect. These technological advancements simplified the process by which people were able to grow cotton and export it to China for the workers to create these shirts. There are now many subsidiary industries to cotton; industries are always producing new clothes every day. Due to this
Although a 2002 agriculture law superseded many parts of FAIRA, acreage was still increased because of the growing demand for corn in animal feed, the need for corn in ethanol manufacturing, and the increased possibility to make food with corn byproducts. These seem to be good and fair reasons to focus our efforts on increasing output, however, the same issue arises: the more corn that is made, the less stable a livelihood farming becomes, regardless of the subsidies that the federal government provides.
These assumptions include: farmers had to compete with industries for workers; the emancipation of slaves left farmers with no workforce, forcing them into industry jobs; and income taxes drove farmers into debt. After our hypothesis was written, we consulted Mr. Nelson on advice in moving forward. With him, we created a list of variables to focus on: taxes, land, population, and crop production. We chose to focus on Al Valorem Taxes, as a farmer’s business depends on their land. We also chose to focus on cotton production because cotton farms were the most successful and thus biggest of farms. We filtered through data from the National Archives and U.S. Census Bureau to separate data related to these variables, and then created a separate graph for each topic. After analyzing the data trends, we researched the reasons behind these trends, and then looked for other problems related to our argument that we did not include in our assumptions.
farms to keep their prices low, can eventually cause the market to fail. (58) The article The
This article written in the Texas Agriculture, a magazine published by the Texas Farm Bureau, is about all the factors impacting farmers that effect their income. Over the past couple years, a combination of things has caused the average Texas farmers income to drop. The primary audience for this article is the farmers in Texas as they are experiencing these issues first hand. The secondary audience would be consumers who have noticed price fluctuations in products at the store and are wondering the reason.
There is a market trend of supply and demand in an economy and this is measured through the equilibrium process and the actors that affect supply and demand. The farmers are the market suppliers and hence they determine their produce by measuring the equilibrium market prices and quantities. The suppliers are aware that when the prices of commodity increases the demand of the same commodity decrease and when demand increases supply decreases until the market reaches an equilibrium point. There are various factors that affect
By 1791, the U.S. was the largest producer of raw material in the world. In the South, cotton was the main exported crop, which of course led to an increasing demand for both slaves and land. But because of this,
We have to take into consideration the other commodities that were becoming global trading items, and not just assume the only item the entire globe showed interest in was cotton. Also, with resources such as steel coming into the picture, that led to new developments such as railroads and better machinery in factors. That alone sped up the industrial revolution by giving more transportation routes and faster production. This being said, we have keep in mind the idea that cotton was a major factor in the growth of capitalism and the development of the industrialized world, however it was not the only factor. No global phenomena can be explained by a single factor. It is the give and take and working together of all the constituents of capitalism that helped shape the world into an industrial one. Although not all countries in the world have had the chance to develop like other parts, the ones that did owe a lot of their thanks to cotton, the commodity that outshines the
In the 1850s, cotton was a very valuable cash crop. We sold this cotton to the British for money, and the South's economy relied on this crop. One bad thing about growing this upland cotton is that the seeds inside the crop have to be removed by hand. Slaves were used to gather and remove seeds from the cotton, but they could not gather more than they could deseed, so they could not produce cotton very fast.
After the invention of the cotton gin, the production of unprocessed cotton doubled each decade after 1800. Other inventions of the Industrial Revolution were the machines to spin and weave cotton and the steamboat to transport it. America was growing three quarters of the world's supply of cotton in the mid-century. Most of it was shipped to England or New England where it was made into cloth. During this time, tobacco’s value decreased, rice exports stayed at the same price, and sugar began to flourish, but only
Supply and demand are the rulers of price in the capitalist economy of the United States, and farm goods rely on these factors as much as any other commodity. The demand for food remains relatively stable although slightly increasing year to year, but the supply fluctuates greatly depending on
With the elimination of U.S. government subsidies, cotton textile manufacturers will pay more for cotton. As the leading buyer of cotton, the Chinese apparel industry’s profitability will be reduced due to their inability to pass on increased cotton prices to their buyers. China’s manufacturing costs had already increased by as much as 40% due to higher market wages and costs with complying with worker and environmental protections. Although China has substantial labor and is accused of utilizing sweat shops to keep their costs extremely low, their increasing manufacturing costs have opened the door to other countries with cheap labor such as Vietnam and Pakistan.
Political factors impact the agricultural sector in factors relating to regulation, distribution, and consumption of foods in a given country. Government policies and imposed regulations have a direct effect on nutritional choices that a consumer makes, and this, in turn, affects the agriculture market (KPMG, 2012). For example, policies governing food prices or the amount of information that a consumer will receive affects the choice of the consumer. Food regulation and safety measures implemented influence the supply of food products, and ultimately determines the market choice for consumers (KPMG, 2012). Economic factors have a direct effect on the agricultural industry. On one hand, the input cost such as the price of seeds, fertilizers, and cost of labor affect the productivity of the industry. The economic status of a country also affects the industry’s productivity. For example, in developing countries, the agricultural sector is less developed owing to limited resource input and poor infrastructure (KPMG, 2012).