Sunday, October 01, 2006
THE COLLAPSE OF THE COTTON AND THE TEXTILE SECTOR IN SUB-SAHARAN AFRICA...
US COTTON SUBSIDIES HAVE REPLACED AFRICAN SLAVES ON COTTON PLANTATIONS...
Collapse of the cotton sector in sub-Saharan Africa
Forty years of economic mismanagement and looting and exploitation of farmers by African governments combined with massive and illegal trade distorting global cotton subsidies (+$US 10 billion/year) paid to industrial cotton “farmers” in the US, the EU and in other industrialized countries « dumped » on world markets have led to the collapse of the cotton sector throughout sub-Saharan Africa. As a direct result, millions of (non-subsidized) small-scale cotton farmers in sub-Saharan Africa have been thrown deeper into poverty as they cannot competitively produce and sell their cotton on the world market, despite their Absolute Comparative Advantage in producing cotton.
Furthermore, the influx of cheap “sweat shops” textiles and garments from China and other high volume/low- wages/low-cost garment producing nations in the Far East coupled with the massive influx of cheap used clothing “dumped” across sub- Saharan Africa (SSA) over the last three decades have led the collapse of the entire textile sub-sector in SSA, further deepening the crisis within the entire sector. This has led to massive job losses within the entire textile sector, from cotton growing to garment manufacturing.
“Illegal” US cotton subsidies
In September 2004, a WTO dispute panel found that $3.2 billion in annual cotton subsidies and $1.6 billion in export credits paid by the US in cotton and other commodities were illegal under WTO rules. “The majority (78%) of US cotton subsidies benefit the largest 10% of cotton producers ( 2500 ) in the US. Loopholes in the subsidy rules allow industrial-sized farms to collect payments in excess of $1 million, while smaller cotton farmers throughout sub-Saharan Africa (+10 million) are driven out of cotton farming by declining cotton prices on the world market resulting from cotton subsidies and continually rising inputs costs (fertilizers, equipment, tools, etc…) resulting from unfair Terms of Trade.
United States Department of Agriculture (USDA) and the Organization for Economic Cooperation and Development (OECD), found that in 2003 agriculture exports from U.S. based global food companies were sold well below the cost of production:
·Cotton was exported at an average price of 47 percent below cost of production;
·Wheat was exported at an average price of 28 percent below cost of production;
·Soybeans were exported at an average price of 10 percent below cost of production;
·Corn was exported at an average price of 10 percent below cost of production;
·Rice was exported at an average price of 26 percent below cost of production.
Agricultural subsidies
Presently, the so-called “Third World” is receiving $US 50 billion in so called “aid” revenue, while the industrialized nations (G8) are spending more than $US 300 billion annually in agricultural subsidies, financed by taxpayers and consumers, leading to over-production and environmental damage.
These highly subsidized agricultural products are then “dumped” in so-called “Third World” countries in the name of “free trade.” Both the EU and the USA export their agricultural products at a price 1/3 lower than the cost of production.
Local (non-subsidized) African farmers (+80% of the African population) are unable to compete against these highly subsidized agricultural products “dumped” onto the local market and are forced to abandon their land, entering into a vicious cycle of unemployment and poverty. As a result, the overall agricultural sector collapses and the country is drawn into a vicious cycle of poverty, “so-called “aid” and debt. (Example: Sugar, cotton, rice, etc.)
Export Dumping Estimate (EDE)
·Measures the gap between the export price and the cost of production
PRODUCT/COUNTRY/EDE (%)/% OF TOTAL WORLD EXPORTS
Wheat/USA/46%/50%
Wheat/EU/34%/50%
Maize/USA/20%/50%
Skimmed milk/EU/50%/Largest exporter
White sugar/EU/75%/Largest exporter
EU, USA and Japan monopoly in these heavily subsidized commodity markets results in setting “dumping” prices on world market ( ie. World prices unrelated to and well below the cost of production).
·Annual direct loss to developing nations: $US 20 billion
(source: World Bank, 2001)
•
Agricultural subsidies (% of total output)
Countries Agricultural subsidies ( % of total output) Annual subsidies amount per capita
Japan 60% $US 24,000
EU 40% $US 16,000
USA 25% $US 21,000
SOURCE: Oxfam trade report
Note: African farmers struggle on an average annual income of $US400 with no subsidies. (Source: World Bank)
Structural over-supply
Agricultural subsidies leading to structural over-supply are at the root cause of declining agricultural commodity prices on the world market, with disastrous economic and social consequences for small holder farmers living off agriculture and for the countries producing and relying heavily on the export revenue from these commodities. Furthermore, declining world prices lead to further increases in production to make up for the loss in income resulting from lower prices, which in turn leads to further over-supply and further price declines. This is a vicious cycle.
Example: Ghana (2nd largest producer of cocoa in the world)
In response to declining prices of cocoa on the world market, Ghana increased its production from 320,000 MT to 450,000 MT between 1996 and 2000. This led to an excess supply of cocoa on the world market, with a resulting further 40% decline in the price of cocoa during the same period.
“Structural over supply in the commodity market lies at the heart of global poverty and instability.” ( Brandt Report, 1980)
Impact of decline in price commodities
In more than fifty so-called “third world” countries, more than fifty percent of export earnings depend on three cash crops. Thus, a substantial decrease in the world price of any of these leads to severe economic crisis for both the farmers and for the countries producing these crops, and throws them into a vicious cycle of poverty, “aid” and debt.
Effects of commodity price decline in Sub-Saharan Africa
·Over 80% of the population in sub-Saharan Africa are small-holder farmers who earn a living through agriculture.
·Agriculture accounts for over 50% of export earnings in Sub-Saharan Africa.
·Most countries in Sub-Saharan Africa depend on 2-3 primary agricultural commodities for their exports.
·Thus, a substantial decrease in the world price of any of these leads to severe economic crisis for both the farmers and for the countries producing these crops, and throws them into a vicious cycle of poverty, “aid” and debt.
( Source: International Task Force on Commodity Risk Management, 1999)
“Trade in this area is vital for poverty reduction since more than 2/3 of the world’s poor live in rural areas” (Oxfam Trade Report)
Managing structural over supply
“ Proper economic prices should be fixed not at their lowest possible level, but at the level sufficient to provide producers with proper nutritional and other standards in the conditions in which they live… and it is in the interest of all producers alike that the price of a commodity should not be depressed below this level, and consumers are not entitled to expect that it should.” (John Maynard Keynes, Economist 1946)
Keynes called for an institutional response to the problems posed by falling and unstable commodity prices in 1944. Unstable commodity prices during the 1920’s was seen as one of the major factors leading to the Great Depression of the 1930’s. Today, many developing nations and millions of small-scale farmers throughout SSA remain highly dependent on the export of non-processed primary commodities (i.e. cotton, coffee, cocoa, etc)
The Brandt Report also called for measures aimed at the “stabilization of commodity prices at remunerative levels” Unfortunately, this coincided with the start of the systematic assault on international commodity agreements which were seen as generating inflation in rich countries. The creation of a global supply management commodity institutions is an urgent necessity to stabilize the highly unpredictable and volatile commodity market, since all existing trade rules and institutions have failed to do so.
“ Trading patterns established after the discovery of the New World and developed through slavery and colonialism remain intact. Commodity market instability and ruinously low prices are consigning whole swathes of the developing world to mass poverty. There is a growing danger that countries dependent on primary commodities will become increasingly desperate enclaves of despair.” Oxfam Trade Report
Agricultural dumping
Dumping of commodities (selling primary commodities at prices unrelated to and well below production cost) is one of the most damaging of all current distortions in world trade. Yet, since its inception the WTO has refused to address or even acknowledge its negative impacts on rural economies around the world. Developing country agriculture, vital for food security, rural livelihoods, poverty reduction and generating foreign exchange, is crippled by the predatory competition from major commodities sold at well below cost of production prices in world markets.
Decline of cotton world prices
According to Oxfam, “since 2001 when the slump in cotton prices started, Africa looses on average $US 441 million a year as a direct result of cotton subsidies. Today, cotton prices are at their lowest levels again, down by 30% between 2004 and 2005, at an average of $US 48 cents/pound. According to recent estimates, cotton prices will stay at very low levels ( between $US 0,48 to $US 0,54/pound ) for the next five years.”
This grim prediction will have devastating economic and social consequences for both millions of cotton farmers and for cotton producing nations in sub-Saharan Africa who depend on cotton export revenue.
Graph of world cotton prices
Cotton global demand & supply (2004-2005) (Source: cottonafrica)
·World production : 23 million metric tons
·World consumption : 21.5 million metric tons
·Excess cotton on world market : 1.5 million metric tons.
·Available stock on world market : 7.5 million metric tons
·Cumulative stock on world market : 9 million metric tons
·Thus, the increase of world market stock from 7.5 million MT to 9 million MT will further decrease prices of cotton on world markets in 2005/2006.
Root cause of the collapse of the cotton sector in SSA
However, although cotton subsidies are causing enormous financial loses to cotton producing countries in SSA, the near-collapse of the cotton sector is not exclusively related to the issue of cotton subsidies. In fact, as the following study clearly demonstrates, even if US cotton subsidies were entirely eliminated, the price of cotton on the world market would only increase
marginally by an average of $ 0,05 cents/Ib, which would clearly be insignificant to either revive the cotton sector and/or to significantly improve the economic and social welfare of small-scale cotton farmers. Furthermore, any likely increase in the price of cotton resulting from a suppression of cotton subsidies would naturally be offset by the laws of demand and supply. ( see graph below)
Study commissioned by Brazil on the impact of cotton subsidies on the world price of cotton Source: Oxfam briefing paper 64. “ Dumping: the beginning of the end? Implications of the ruling in the Brazil/US cotton dispute.
Root cause of the collapse of the cotton sector in SSA
The root cause leading to the collapse of the cotton sector throughout sub-Saharan Africa lies in the fact that Tanzania and other African cotton producing nations continue to produce and export non-processed cotton lint – instead of adding value to the cotton. Over the last forty years the value of (non-oil/non-mineral) primary agricultural commodities have steadily been declining on the world market, while the value of imported manufactured goods have been steadily increasing, mainly due to unfair terms of global trade. In 1975, 8 tons of African coffee could buy 1 tractor; by 1990, it took 40 tons of the same coffee to buy one tractor*.
*source: Crowley Sarah, Teaching about Fair Trade, May 1998.
Cotton sector in Tanzania
According to statistics published by the Tanzanian Cotton Lint Board, the cotton sector in Tanzania provides employment to over forty percent of the population, contributes 15%-20% to the GNP and is the second largest source of foreign exchange. However, over 80% of the cotton produced in Tanzania is currently exported raw (non-processed) in the form of lint. The government generates on average $US 40 million annually in cotton lint exports and imports $US 80 million of textiles and garments annually, out of which 62% constitutes used clothing known as “kifua" meaning "dead white man's clothing".
Tanzania cotton & textile annual trade balance (1998-2002)
.Average annual value of cotton exports : $US 40 million
.Average annual value of textiles & garment imports: $US 80 million ( out of which 62% constitutes used garments)
.Annual trade deficit: $US 40 million ( see graphs below)
Thus, such “colonial” economic policies and trade practices lead to important financial loses for the country; but more importantly, exporting non-processed cotton lint traps Tanzanian cotton farmers into the vicious trap cycle of trade distorting cotton subsidies, which result in continuously declining prices of cotton on the world market, thus further marginalizing and impoverishing farmers. Furthermore, exporting non-processed cotton fails to create desperately needed local employment. Last but not least, to add insult to injury, local inhabitants are left with no other alternative than to wear their humiliation daily in the form of “mitumba” ( used clothing “dumped” in Tanzania and throughout sub-Saharan Africa)
Collapse of the textile industry in sub-Saharan Africa
Unfair trading rules and policies designed by the G8 countries, enforced by the WTO and implemented by the IMF through its Structural Adjustment Programs have also in large part resulted in the collapse of the local textile industry in sub-Saharan Africa (SSA). The liberalization of the sector resulting in the removal of trade barriers within the textile sector in Africa has led to an influx of cheap clothing from China and other low cost textile and garment producing nations in the Far East which has driven out of business many of the less competitive local textile firms.
Furthermore, over the last 3 decades, used clothing “dumped” across sub-Saharan Africa has flooded the market with cheap second hand clothing and dealt a final and decisive blow to the local textile sector, further undermining and preventing its revival. The collapse of both the cotton sector and the textile sector in SSA (from cotton growing to garment manufacturing) has resulted in huge job loses within the entire textile sub-sector.
“Local” textile firms
“Made in Uganda, sold in the USA”
Today there are no “local” textile firms in sub-Saharan Africa (i.e. vertically integrated-locally/domestically owned textile firms producing for the domestic/local market). In fact, most textile firms operating in sub-Saharan Africa are foreign-owned who import most of their raw materials, yarn, fabrics and other inputs from abroad, use local “slave-labor, ” pay “slave wages” as their basis for comparative advantage ( average monthly wage: from $15 in Malawi to $45 in other East African countries) and export the finished garments abroad. Many of these companies are owned and operated by South East Asians. One such textile firm, Tri-Star Apparel Ltd in Uganda, proudly boos:t “ Made in Uganda, sold in the USA”.
Furthermore, to attract Foreign Direct Investment (FDI) in the sector in exchange for “slave jobs” and much sought after tax revenue, African governments offer attractive and generous investment incentive packages that include tax breaks, export subsidies, profit expatriation, and other benefits. In addition, all of these companies operate with impunity from Export Processing Zones (EPZ) which have become infamous for exploitative employment practices, inhumane working conditions and for gross violations of international and local labor laws.
“ International corporations continue to locate in nations where wages, taxes, trade, financial and environmental restrictions are lowest. There is virtually no regulation of corporate practices, which are often at odds with the development objectives and national interests of poor countries” Brandt Report
Where markets are working exclusively, dominated by special interests, distorted by bad policy or inappropriate regulations, they offer poor people fewer chances to participate in the fruits of economic growth.
As Oxfam points out:
“The quality and success of export growth is determined by the extent to which it is built on dynamic linkages within the local economy” (vertical/horizontal integration). Delocalization of the means of production in low-wages countries fails disastrously to meet this principle.” Oxfam Trade report
“In countries with high concentration of rural poverty, the combination of rapid import liberalization and the promotion of labor-intensive export production can have profoundly anti-poor outcomes” Oxfam Trade Report
Thus, under this model, there is very little economic and social benefit derived for both workers and the country where these firms operate as it fails to stimulate and develop the local textile sector through a vertically-integrated approach (from cotton growing to garment manufacturing using local cotton, local yarn, local fabric, and other local inputs), and given its export-oriented nature, it fails to provide affordable clothing for the local market.
Furthermore, over and above the excessive economic and social abuses created by this development model, the garment and textile industry in Africa is facing two additional sources of crisis that pose a sever threat to it’s sustainability and is resulting in wiping out hundreds of thousands of jobs that have been created in the past few years through ‘enabling’ trade legislation and agreements such as the Multi Fiber Agreement (MFA) and the African Growth and Opportunity Act (AGOA)
In fact, .the expiry of the Multi Fiber Agreement (MFA) on 01 January 2005 and the expiry of the 3rd Country Clause of the African Growth and Opportunity Act (AGOA) in September 2007 is further threatening the future of the cotton and the textile sector in Tanzania and throughout SSA and the jobs of those employed within this industry.
Challenges facing the export-oriented textile firms operating in Africa
.End of the Multi-Fiber Agreement (MFA) on 01 January 2005
.AGOA- expiry of the “Third Country Clause” in 2007
End of the Multi-Fiber Agreement (MFA)
On 1 January 2005, the Multi-Fiber Agreement (MFA), which has governed garment and textiles imports to the EU and US through a system of quotas since 1974, came to an end. The quota system, although initially introduced to protect the domestic industries in the EU and US, has in practice provided many developing countries with access to markets and shelter from the rigors of global competition. From 01 January 2005, these countries will have to compete with the world’s most efficient garment producing countries, particularly China and India. Clothing brands and retailers will have greater freedom to consolidate their supply base, concentrating on those countries offering the best deals.
The agreement to phase out the MFA has been hailed by some as a real success in the battle for a more open market – so why the commotion? The concern is that retailers and brands will stop or substantially reduce sourcing from many less competitive poor garment producing countries in Africa, with serious economic and social consequences including substantial job losses. The second potential impact of the ending of the MFA is that the largely Asian owned producers in Africa may be tempted to relocate to factor markets closer to home with lower transport costs for fabrics and to consumer markets easily compensating for any increase in tariffs faced by such a move. A WTO study released in September last year showed that China and India would probably come to dominate about 80% of the global textile market in a post-MFA era, while the remaining 20% would be shared by the rest of the world. Unfortunately this prediction has already materialized. In fact, since the expiry of the MFA on 01 January 2005, hundreds of textiles firms across sub-Saharan Africa have already closed down and hundreds of thousands of workers have lost their jobs.
Africa Growth and Opportunity Act ( expiry of 3rd Country Clause in 2007)
What encourages these producers to stay besides the extremely favorable investment conditions facilitated by export led growth strategies based on foreign direct investment, is of course the Africa Growth and Opportunity Act (AGOA) of the US. This legislation gives quota free and duty free access to the US market to 38 African countries across a many more tariff lines than covered by the general system of preferences (GSP).
The AGOA currently allows less developed countries (LDC’s) to source fabrics from anywhere and not just the US and other AGOA eligible countries as otherwise prescribed by the act. The clause allowing the so-called 3rd Country provision of fabric is to be removed in September of 2007. The delay around the extension of AGOA to 2015 and the extension of the 3rd country provision clause from September 2004 to 2007 caused a number of closures in Africa demonstrating the vulnerable nature of the industry in Africa.
The entire spread of the commodity type of mass production that we see in the S. E. Asian firms operating in Africa have been driven by seeking competitive advantage. It was the MFA and the AGOA that brought them here. The trade agreements, the special preferences, the exemptions from duties and quotas have made this region falsely and temporarily competitive. These industries now have to make the transition from operating from within a protected competitive environment to being intrinsically competitive themselves.
Given this background of cumulative loses and the grim future prospects facing both the cotton and textile sector in sub-Saharan Africa, an urgent solution must be found to rescue and revive these crucial sectors and to save both the millions of cotton farmers and the cotton producing countries in sub-Saharan Africa from total collapse.
Proposed solution
Local value-addition of organic cotton
In this challenging context, the solution lies in local value-addition and in developing a local market for (organic) cotton so as to break-free from both exclusive reliance on cotton lint exports and from the dictates of the world market. To do so, local processing of (organic) cotton – from spinning yarn to weaving fabrics to producing garments - must be promoted and encouraged. Processing the cotton locally would add-value to the cotton, thus enabling Tanzanian cotton farmers break-free from the vicious trap cycle of trade distorting global cotton subsidies.
Furthermore, adding-value locally would create desperately needed local employment and will generate income throughout the supply chain, thus effectively reducing poverty among cotton farmers and the local population. Finally, it would enable Tanzania and other cotton-producing nations in sub-Saharan Africa become self-sufficient in textile and garment production and consumption.
Constraints to local value-addition
However, Tanzania and other cotton producing nations in SSA do not have a Comparative Advantage in the production of textiles and garments vis-à-vis high-volume/low-wage/low-cost textile giants like China and India, due to several economic, political and structural constraints.
According to a US International Trade Commission report :
“ Sub-Saharan Africa (SSA) is not a particularly low-cost area for production of textiles and apparel, given the labor costs, low productivity, long lead times, and high cost of other inputs compared with those in Asia. Most companies located their production in SSA because of quotas on other suppliers. These quotas, combined with duty-free, quota-free access to the EU and, since October 2000, to the U.S. market, has led to increasing exports of mainly apparel items from SSA. Most companies interviewed indicated that because of the importance of quotas, it will be difficult for SSA to compete in a quota-free world. They indicated that EU and AGOA preferences will not be enough to keep the industry competitive. A number of SSA companies reported they are already losing sales in the EU market to countries such as Bangladesh, even with EU quotas in place. Most SSA firms view vertical integration as the means of survival in a quota-free world.”
Source: US International Trade Commission January 2004
[Excerpt: for full report see http://hotdocs.usitc.gov/pub3671/pub3671_I.pdf
Environmental constraints
Furthermore, in addition to economic constraints related to trade distorting global cotton subsidies, the conventional cotton sector is condemned to collapse and disappear as it is extremely polluting and is thus not ecologically and environmentally sustainable. In fact, the conventional cotton sector utilizes only around 3% of the global agricultural arable land surface but consumes annually more than 25% of all agricultural industrial chemicals produced globally (i.e. pesticides, insecticides, herbicides, fertilizers, etc.)
Note: See study on environmental impact of conventional cotton growing from Harvey Baker- the environmental director of the AUSTRALIAN COTTON FOUNDATION Title: Environmental Audit of Cotton Production in Australia
Organic cotton
With the increasing global concern for the preservation of the natural environment and the growing number of environmentally and socially conscious consumers worldwide, organic agriculture is a market that is rapidly growing. Organic agriculture in general and organic cotton specifically is a fast growing and expanding global sector and most cotton producing nations in SSA are well-suited for organic cotton production and have a de-facto Absolute Comparative Advantage in producing organic cotton due to the favorable climate, abundant land, good soil fertility, and abundant and inexpensive labor. Organic cotton is proving to be an environmental, social and economic viable alternative to the conventional cotton sector, as demonstrated by a number of successfully running organic cotton project in Africa and around the world.
Furthermore, organic cotton provides an opportunity for farmers to break away from the dependence on expensive imported agricultural inputs, thus breaking the vicious cycle of poverty resulting from unfair Terms of Trade (i.e. continuous rising prices of agricultural inputs and continuous fall in the price of agricultural commodities on the world market). Moreover, organic cotton translates into better health for both the environment and the farmers, promotes food security and self-sufficiency (crop rotation) and provides a better income resulting from lower cost (no expensive chemicals used) and higher organic cotton prices.
However, although organic cotton provides an economically viable and environmentally sustainable alternative for cotton farmers in Africa, efforts must be made to further process the organic cotton locally, from spinning yarn to weaving cloth, so as to create employment and generate income along the entire supply chain.
Proposed solution
I have personally researched and designed the following project in response to the severe crisis prevailing within both the cotton and the textile sector in sub-Saharan Africa.
Mass production vs production by the masses
My project aims to process organically grown cotton locally using simple and inexpensive hand-operated cotton processing machinery and tools throughout the supply chain– from hand-spinning yarn, hand-weaving fabrics, dyeing & printing using natural dyes, designing using designs that reflect African cultures and traditions to tailoring garments - while respecting both ecological standards of production (organic cotton, natural dyes, etc.) as well as non-exploitative labor standards, thus reaching a perfect balance between ecological standards of organic production and non-exploitative labor standards throughout the supply chain in the production of textiles and garments. This would set a new standard and an example in the global textile industry and garments thus produced would find a ready local, regional and export market within the growing number of socially and environmentally conscious consumers worldwide.
The objectives of the project are:
1) To revive the cotton and textile sector in sub-Saharan Africa through the development of a vertically-integrated economically-viable, socially non-exploitative and environmentally sustainable textile and garment industry - from organic cotton growing to garment manufacturing- for both local/regional consumption and export markets.
2) To create (desperately lacking and needed) local employment throughout the local supply chain - from organic cotton growing, picking, spinning yarn, weaving fabrics, dyeing & printing, designing, to garment tailoring - thus generating income and creating economic growth within the sector and throughout the economy, thereby effectively reducing poverty among the local population.
3) To help cotton producing nations in sub-Saharan Africa achieve self-sufficiency in production and consumption of garments using socially non-exploitative labor practices and environmentally sustainable production methods, and to provide affordable and quality clothing to the people of Africa that reflect African cultures, traditions, values and designs, made by Africans using local (organic) cotton
4) To enable African cotton farmers break free from the vicious trap cycle of trade distorting global cotton subsidies and from the dictates of the world market.
The local production of hand-woven fabrics has the potential to revive both the cotton and the textile sector in sub-Saharan Africa, from cotton growing to garment manufacturing and to provide employment and income to millions of Africans working along the entire supply chain. As noted above, the production process includes (organic) cotton growing, picking, pre-spinning slivers, spinning yarn, weaving fabrics, dyeing & printing fabrics, designing and garment tailoring. Thus, local-value addition will provide employment and generate income for millions of Africans working within each one of these sectors. Each of these activities can be carried out in both rural and urban areas using manual labor aided by the use of simple and inexpensive hand-operated cotton processing machinery and tools.
Cotton farmers can grow and sell their cotton on the local market (thus breaking free from the vicious trap cycle of trade distorting cotton subsidies and from the dictates of the world market) to locally owned and operated ginners who will gin/sliver the cotton and sell it to local hand-spinners. Hand spinners will produce hand-made yarn using a simple and inexpensive spinning wheel. Hand spinners will in turn sell their hand-spun yarn to weavers who will hand weave the yarn into fabrics using an inexpensive locally made hand-loom. Fabrics will then be dyed locally using natural dyes. African designers will design garments that reflect African cultures, traditions, values and designs and skilled local tailors will manufacture the final garment. Finally, local, regional and global consumers will have access to affordable clothing that reflect African cultures, traditions and designs made locally with local (organic) cotton and local labor using socially non-exploitative labor practices and environmentally sustainable production methods. The production and local processing of organic cotton – from cotton growing to manufacturing – constitutes an economically, socially and environmentally viable alternative solution to revive both the cotton and the textile sector in SSA.
Mass production verses production by the masses
Mass production: (centralized production)
.Exploits labor ( average wage in the "sweatshops" textile industry = $1/day for +12 hour shifts, with no social benefits and flagrant and repeated violations of basic International Labor Organization’s (ILO) labor standards.
.Capital intensive: Low employment creation level as the textile industry is capital intensive. Objective is to maximize profits; to do so, labor costs are constantly reduced by paying “slave” wages and/or reducing the number of workers employed. Thus, in this context, there is a constant inherent conflict of interest between the welfare of the workers on the one hand and the shareholders of the company.
.Kills the “human spirit” (i.e. creativity, intelligence, artistic skills, etc…)
.Environmentally and ecologically non-sustainable: Whole production process – from cotton growing to cotton processing – is extremely polluting to the environment and is thus not ecologically and environmentally sustainable.
Production by the masses (decentralized production)
.Uses non-exploitative production methods.
.Labor intensive industry: Employs a large number of people in a wide geographical area including the rural areas where unemployment is widespread. Objective is to create local employment through non-exploitative labor practices and to generate income directly for the local inhabitants.
.Respects human dignity and favors development of the “human spirit” (i.e. intelligence, creativity, artistic skills, etc…)
.Environmentally and ecologically sustainable: Uses environmentally and ecologically sustainable production methods throughout the supply chain, from organic cotton growing and throughout the processing stages ( i.e. spinning, weaving, dyeing & printing using natural dyes, to garment tailoring.)
Mahatma Gandhi’s example
The same issues surrounding the scale of production have been important in India since mass produced textiles were introduced during the British Empire. The poverty and enforced idleness that resulted at that time were devastating since people lost both the means of making a living and the basis for their way of life. Gandhi led the struggle for independence in India by advocating that everyone should wear garments made of hand spun yarn and hand woven fabrics. His work illustrates how important it can be to produce unique textiles on a small scale.
The world has changed considerably since Ghandi’s time, but there are striking similarities between the crisis prevailing within the textile sector in SSA today and the issues Gandhi struggled against within India’s textile sector half a century ago. Now, with globalization, it is necessary to deal with powerful influences from new technology and the information explosion as well as the dominance of capital costs and the productivity of labor. However, we either can choose to adopt Gandhi’s non-violent, non-exploitative, socially and environmentally friendly production methods, or we can blindly follow the journey on the tracks of globalization leading to…
As Mahatma Gandhi rightly said:
“You cannot build a non-violent society on exploitation;
exploitation is the essence of violence.”
Collapse of the cotton sector in sub-Saharan Africa
Forty years of economic mismanagement and looting and exploitation of farmers by African governments combined with massive and illegal trade distorting global cotton subsidies (+$US 10 billion/year) paid to industrial cotton “farmers” in the US, the EU and in other industrialized countries « dumped » on world markets have led to the collapse of the cotton sector throughout sub-Saharan Africa. As a direct result, millions of (non-subsidized) small-scale cotton farmers in sub-Saharan Africa have been thrown deeper into poverty as they cannot competitively produce and sell their cotton on the world market, despite their Absolute Comparative Advantage in producing cotton.
Furthermore, the influx of cheap “sweat shops” textiles and garments from China and other high volume/low- wages/low-cost garment producing nations in the Far East coupled with the massive influx of cheap used clothing “dumped” across sub- Saharan Africa (SSA) over the last three decades have led the collapse of the entire textile sub-sector in SSA, further deepening the crisis within the entire sector. This has led to massive job losses within the entire textile sector, from cotton growing to garment manufacturing.
“Illegal” US cotton subsidies
In September 2004, a WTO dispute panel found that $3.2 billion in annual cotton subsidies and $1.6 billion in export credits paid by the US in cotton and other commodities were illegal under WTO rules. “The majority (78%) of US cotton subsidies benefit the largest 10% of cotton producers ( 2500 ) in the US. Loopholes in the subsidy rules allow industrial-sized farms to collect payments in excess of $1 million, while smaller cotton farmers throughout sub-Saharan Africa (+10 million) are driven out of cotton farming by declining cotton prices on the world market resulting from cotton subsidies and continually rising inputs costs (fertilizers, equipment, tools, etc…) resulting from unfair Terms of Trade.
United States Department of Agriculture (USDA) and the Organization for Economic Cooperation and Development (OECD), found that in 2003 agriculture exports from U.S. based global food companies were sold well below the cost of production:
·Cotton was exported at an average price of 47 percent below cost of production;
·Wheat was exported at an average price of 28 percent below cost of production;
·Soybeans were exported at an average price of 10 percent below cost of production;
·Corn was exported at an average price of 10 percent below cost of production;
·Rice was exported at an average price of 26 percent below cost of production.
Agricultural subsidies
Presently, the so-called “Third World” is receiving $US 50 billion in so called “aid” revenue, while the industrialized nations (G8) are spending more than $US 300 billion annually in agricultural subsidies, financed by taxpayers and consumers, leading to over-production and environmental damage.
These highly subsidized agricultural products are then “dumped” in so-called “Third World” countries in the name of “free trade.” Both the EU and the USA export their agricultural products at a price 1/3 lower than the cost of production.
Local (non-subsidized) African farmers (+80% of the African population) are unable to compete against these highly subsidized agricultural products “dumped” onto the local market and are forced to abandon their land, entering into a vicious cycle of unemployment and poverty. As a result, the overall agricultural sector collapses and the country is drawn into a vicious cycle of poverty, “so-called “aid” and debt. (Example: Sugar, cotton, rice, etc.)
Export Dumping Estimate (EDE)
·Measures the gap between the export price and the cost of production
PRODUCT/COUNTRY/EDE (%)/% OF TOTAL WORLD EXPORTS
Wheat/USA/46%/50%
Wheat/EU/34%/50%
Maize/USA/20%/50%
Skimmed milk/EU/50%/Largest exporter
White sugar/EU/75%/Largest exporter
EU, USA and Japan monopoly in these heavily subsidized commodity markets results in setting “dumping” prices on world market ( ie. World prices unrelated to and well below the cost of production).
·Annual direct loss to developing nations: $US 20 billion
(source: World Bank, 2001)
•
Agricultural subsidies (% of total output)
Countries Agricultural subsidies ( % of total output) Annual subsidies amount per capita
Japan 60% $US 24,000
EU 40% $US 16,000
USA 25% $US 21,000
SOURCE: Oxfam trade report
Note: African farmers struggle on an average annual income of $US400 with no subsidies. (Source: World Bank)
Structural over-supply
Agricultural subsidies leading to structural over-supply are at the root cause of declining agricultural commodity prices on the world market, with disastrous economic and social consequences for small holder farmers living off agriculture and for the countries producing and relying heavily on the export revenue from these commodities. Furthermore, declining world prices lead to further increases in production to make up for the loss in income resulting from lower prices, which in turn leads to further over-supply and further price declines. This is a vicious cycle.
Example: Ghana (2nd largest producer of cocoa in the world)
In response to declining prices of cocoa on the world market, Ghana increased its production from 320,000 MT to 450,000 MT between 1996 and 2000. This led to an excess supply of cocoa on the world market, with a resulting further 40% decline in the price of cocoa during the same period.
“Structural over supply in the commodity market lies at the heart of global poverty and instability.” ( Brandt Report, 1980)
Impact of decline in price commodities
In more than fifty so-called “third world” countries, more than fifty percent of export earnings depend on three cash crops. Thus, a substantial decrease in the world price of any of these leads to severe economic crisis for both the farmers and for the countries producing these crops, and throws them into a vicious cycle of poverty, “aid” and debt.
Effects of commodity price decline in Sub-Saharan Africa
·Over 80% of the population in sub-Saharan Africa are small-holder farmers who earn a living through agriculture.
·Agriculture accounts for over 50% of export earnings in Sub-Saharan Africa.
·Most countries in Sub-Saharan Africa depend on 2-3 primary agricultural commodities for their exports.
·Thus, a substantial decrease in the world price of any of these leads to severe economic crisis for both the farmers and for the countries producing these crops, and throws them into a vicious cycle of poverty, “aid” and debt.
( Source: International Task Force on Commodity Risk Management, 1999)
“Trade in this area is vital for poverty reduction since more than 2/3 of the world’s poor live in rural areas” (Oxfam Trade Report)
Managing structural over supply
“ Proper economic prices should be fixed not at their lowest possible level, but at the level sufficient to provide producers with proper nutritional and other standards in the conditions in which they live… and it is in the interest of all producers alike that the price of a commodity should not be depressed below this level, and consumers are not entitled to expect that it should.” (John Maynard Keynes, Economist 1946)
Keynes called for an institutional response to the problems posed by falling and unstable commodity prices in 1944. Unstable commodity prices during the 1920’s was seen as one of the major factors leading to the Great Depression of the 1930’s. Today, many developing nations and millions of small-scale farmers throughout SSA remain highly dependent on the export of non-processed primary commodities (i.e. cotton, coffee, cocoa, etc)
The Brandt Report also called for measures aimed at the “stabilization of commodity prices at remunerative levels” Unfortunately, this coincided with the start of the systematic assault on international commodity agreements which were seen as generating inflation in rich countries. The creation of a global supply management commodity institutions is an urgent necessity to stabilize the highly unpredictable and volatile commodity market, since all existing trade rules and institutions have failed to do so.
“ Trading patterns established after the discovery of the New World and developed through slavery and colonialism remain intact. Commodity market instability and ruinously low prices are consigning whole swathes of the developing world to mass poverty. There is a growing danger that countries dependent on primary commodities will become increasingly desperate enclaves of despair.” Oxfam Trade Report
Agricultural dumping
Dumping of commodities (selling primary commodities at prices unrelated to and well below production cost) is one of the most damaging of all current distortions in world trade. Yet, since its inception the WTO has refused to address or even acknowledge its negative impacts on rural economies around the world. Developing country agriculture, vital for food security, rural livelihoods, poverty reduction and generating foreign exchange, is crippled by the predatory competition from major commodities sold at well below cost of production prices in world markets.
Decline of cotton world prices
According to Oxfam, “since 2001 when the slump in cotton prices started, Africa looses on average $US 441 million a year as a direct result of cotton subsidies. Today, cotton prices are at their lowest levels again, down by 30% between 2004 and 2005, at an average of $US 48 cents/pound. According to recent estimates, cotton prices will stay at very low levels ( between $US 0,48 to $US 0,54/pound ) for the next five years.”
This grim prediction will have devastating economic and social consequences for both millions of cotton farmers and for cotton producing nations in sub-Saharan Africa who depend on cotton export revenue.
Graph of world cotton prices
Cotton global demand & supply (2004-2005) (Source: cottonafrica)
·World production : 23 million metric tons
·World consumption : 21.5 million metric tons
·Excess cotton on world market : 1.5 million metric tons.
·Available stock on world market : 7.5 million metric tons
·Cumulative stock on world market : 9 million metric tons
·Thus, the increase of world market stock from 7.5 million MT to 9 million MT will further decrease prices of cotton on world markets in 2005/2006.
Root cause of the collapse of the cotton sector in SSA
However, although cotton subsidies are causing enormous financial loses to cotton producing countries in SSA, the near-collapse of the cotton sector is not exclusively related to the issue of cotton subsidies. In fact, as the following study clearly demonstrates, even if US cotton subsidies were entirely eliminated, the price of cotton on the world market would only increase
marginally by an average of $ 0,05 cents/Ib, which would clearly be insignificant to either revive the cotton sector and/or to significantly improve the economic and social welfare of small-scale cotton farmers. Furthermore, any likely increase in the price of cotton resulting from a suppression of cotton subsidies would naturally be offset by the laws of demand and supply. ( see graph below)
Study commissioned by Brazil on the impact of cotton subsidies on the world price of cotton Source: Oxfam briefing paper 64. “ Dumping: the beginning of the end? Implications of the ruling in the Brazil/US cotton dispute.
Root cause of the collapse of the cotton sector in SSA
The root cause leading to the collapse of the cotton sector throughout sub-Saharan Africa lies in the fact that Tanzania and other African cotton producing nations continue to produce and export non-processed cotton lint – instead of adding value to the cotton. Over the last forty years the value of (non-oil/non-mineral) primary agricultural commodities have steadily been declining on the world market, while the value of imported manufactured goods have been steadily increasing, mainly due to unfair terms of global trade. In 1975, 8 tons of African coffee could buy 1 tractor; by 1990, it took 40 tons of the same coffee to buy one tractor*.
*source: Crowley Sarah, Teaching about Fair Trade, May 1998.
Cotton sector in Tanzania
According to statistics published by the Tanzanian Cotton Lint Board, the cotton sector in Tanzania provides employment to over forty percent of the population, contributes 15%-20% to the GNP and is the second largest source of foreign exchange. However, over 80% of the cotton produced in Tanzania is currently exported raw (non-processed) in the form of lint. The government generates on average $US 40 million annually in cotton lint exports and imports $US 80 million of textiles and garments annually, out of which 62% constitutes used clothing known as “kifua" meaning "dead white man's clothing".
Tanzania cotton & textile annual trade balance (1998-2002)
.Average annual value of cotton exports : $US 40 million
.Average annual value of textiles & garment imports: $US 80 million ( out of which 62% constitutes used garments)
.Annual trade deficit: $US 40 million ( see graphs below)
Thus, such “colonial” economic policies and trade practices lead to important financial loses for the country; but more importantly, exporting non-processed cotton lint traps Tanzanian cotton farmers into the vicious trap cycle of trade distorting cotton subsidies, which result in continuously declining prices of cotton on the world market, thus further marginalizing and impoverishing farmers. Furthermore, exporting non-processed cotton fails to create desperately needed local employment. Last but not least, to add insult to injury, local inhabitants are left with no other alternative than to wear their humiliation daily in the form of “mitumba” ( used clothing “dumped” in Tanzania and throughout sub-Saharan Africa)
Collapse of the textile industry in sub-Saharan Africa
Unfair trading rules and policies designed by the G8 countries, enforced by the WTO and implemented by the IMF through its Structural Adjustment Programs have also in large part resulted in the collapse of the local textile industry in sub-Saharan Africa (SSA). The liberalization of the sector resulting in the removal of trade barriers within the textile sector in Africa has led to an influx of cheap clothing from China and other low cost textile and garment producing nations in the Far East which has driven out of business many of the less competitive local textile firms.
Furthermore, over the last 3 decades, used clothing “dumped” across sub-Saharan Africa has flooded the market with cheap second hand clothing and dealt a final and decisive blow to the local textile sector, further undermining and preventing its revival. The collapse of both the cotton sector and the textile sector in SSA (from cotton growing to garment manufacturing) has resulted in huge job loses within the entire textile sub-sector.
“Local” textile firms
“Made in Uganda, sold in the USA”
Today there are no “local” textile firms in sub-Saharan Africa (i.e. vertically integrated-locally/domestically owned textile firms producing for the domestic/local market). In fact, most textile firms operating in sub-Saharan Africa are foreign-owned who import most of their raw materials, yarn, fabrics and other inputs from abroad, use local “slave-labor, ” pay “slave wages” as their basis for comparative advantage ( average monthly wage: from $15 in Malawi to $45 in other East African countries) and export the finished garments abroad. Many of these companies are owned and operated by South East Asians. One such textile firm, Tri-Star Apparel Ltd in Uganda, proudly boos:t “ Made in Uganda, sold in the USA”.
Furthermore, to attract Foreign Direct Investment (FDI) in the sector in exchange for “slave jobs” and much sought after tax revenue, African governments offer attractive and generous investment incentive packages that include tax breaks, export subsidies, profit expatriation, and other benefits. In addition, all of these companies operate with impunity from Export Processing Zones (EPZ) which have become infamous for exploitative employment practices, inhumane working conditions and for gross violations of international and local labor laws.
“ International corporations continue to locate in nations where wages, taxes, trade, financial and environmental restrictions are lowest. There is virtually no regulation of corporate practices, which are often at odds with the development objectives and national interests of poor countries” Brandt Report
Where markets are working exclusively, dominated by special interests, distorted by bad policy or inappropriate regulations, they offer poor people fewer chances to participate in the fruits of economic growth.
As Oxfam points out:
“The quality and success of export growth is determined by the extent to which it is built on dynamic linkages within the local economy” (vertical/horizontal integration). Delocalization of the means of production in low-wages countries fails disastrously to meet this principle.” Oxfam Trade report
“In countries with high concentration of rural poverty, the combination of rapid import liberalization and the promotion of labor-intensive export production can have profoundly anti-poor outcomes” Oxfam Trade Report
Thus, under this model, there is very little economic and social benefit derived for both workers and the country where these firms operate as it fails to stimulate and develop the local textile sector through a vertically-integrated approach (from cotton growing to garment manufacturing using local cotton, local yarn, local fabric, and other local inputs), and given its export-oriented nature, it fails to provide affordable clothing for the local market.
Furthermore, over and above the excessive economic and social abuses created by this development model, the garment and textile industry in Africa is facing two additional sources of crisis that pose a sever threat to it’s sustainability and is resulting in wiping out hundreds of thousands of jobs that have been created in the past few years through ‘enabling’ trade legislation and agreements such as the Multi Fiber Agreement (MFA) and the African Growth and Opportunity Act (AGOA)
In fact, .the expiry of the Multi Fiber Agreement (MFA) on 01 January 2005 and the expiry of the 3rd Country Clause of the African Growth and Opportunity Act (AGOA) in September 2007 is further threatening the future of the cotton and the textile sector in Tanzania and throughout SSA and the jobs of those employed within this industry.
Challenges facing the export-oriented textile firms operating in Africa
.End of the Multi-Fiber Agreement (MFA) on 01 January 2005
.AGOA- expiry of the “Third Country Clause” in 2007
End of the Multi-Fiber Agreement (MFA)
On 1 January 2005, the Multi-Fiber Agreement (MFA), which has governed garment and textiles imports to the EU and US through a system of quotas since 1974, came to an end. The quota system, although initially introduced to protect the domestic industries in the EU and US, has in practice provided many developing countries with access to markets and shelter from the rigors of global competition. From 01 January 2005, these countries will have to compete with the world’s most efficient garment producing countries, particularly China and India. Clothing brands and retailers will have greater freedom to consolidate their supply base, concentrating on those countries offering the best deals.
The agreement to phase out the MFA has been hailed by some as a real success in the battle for a more open market – so why the commotion? The concern is that retailers and brands will stop or substantially reduce sourcing from many less competitive poor garment producing countries in Africa, with serious economic and social consequences including substantial job losses. The second potential impact of the ending of the MFA is that the largely Asian owned producers in Africa may be tempted to relocate to factor markets closer to home with lower transport costs for fabrics and to consumer markets easily compensating for any increase in tariffs faced by such a move. A WTO study released in September last year showed that China and India would probably come to dominate about 80% of the global textile market in a post-MFA era, while the remaining 20% would be shared by the rest of the world. Unfortunately this prediction has already materialized. In fact, since the expiry of the MFA on 01 January 2005, hundreds of textiles firms across sub-Saharan Africa have already closed down and hundreds of thousands of workers have lost their jobs.
Africa Growth and Opportunity Act ( expiry of 3rd Country Clause in 2007)
What encourages these producers to stay besides the extremely favorable investment conditions facilitated by export led growth strategies based on foreign direct investment, is of course the Africa Growth and Opportunity Act (AGOA) of the US. This legislation gives quota free and duty free access to the US market to 38 African countries across a many more tariff lines than covered by the general system of preferences (GSP).
The AGOA currently allows less developed countries (LDC’s) to source fabrics from anywhere and not just the US and other AGOA eligible countries as otherwise prescribed by the act. The clause allowing the so-called 3rd Country provision of fabric is to be removed in September of 2007. The delay around the extension of AGOA to 2015 and the extension of the 3rd country provision clause from September 2004 to 2007 caused a number of closures in Africa demonstrating the vulnerable nature of the industry in Africa.
The entire spread of the commodity type of mass production that we see in the S. E. Asian firms operating in Africa have been driven by seeking competitive advantage. It was the MFA and the AGOA that brought them here. The trade agreements, the special preferences, the exemptions from duties and quotas have made this region falsely and temporarily competitive. These industries now have to make the transition from operating from within a protected competitive environment to being intrinsically competitive themselves.
Given this background of cumulative loses and the grim future prospects facing both the cotton and textile sector in sub-Saharan Africa, an urgent solution must be found to rescue and revive these crucial sectors and to save both the millions of cotton farmers and the cotton producing countries in sub-Saharan Africa from total collapse.
Proposed solution
Local value-addition of organic cotton
In this challenging context, the solution lies in local value-addition and in developing a local market for (organic) cotton so as to break-free from both exclusive reliance on cotton lint exports and from the dictates of the world market. To do so, local processing of (organic) cotton – from spinning yarn to weaving fabrics to producing garments - must be promoted and encouraged. Processing the cotton locally would add-value to the cotton, thus enabling Tanzanian cotton farmers break-free from the vicious trap cycle of trade distorting global cotton subsidies.
Furthermore, adding-value locally would create desperately needed local employment and will generate income throughout the supply chain, thus effectively reducing poverty among cotton farmers and the local population. Finally, it would enable Tanzania and other cotton-producing nations in sub-Saharan Africa become self-sufficient in textile and garment production and consumption.
Constraints to local value-addition
However, Tanzania and other cotton producing nations in SSA do not have a Comparative Advantage in the production of textiles and garments vis-à-vis high-volume/low-wage/low-cost textile giants like China and India, due to several economic, political and structural constraints.
According to a US International Trade Commission report :
“ Sub-Saharan Africa (SSA) is not a particularly low-cost area for production of textiles and apparel, given the labor costs, low productivity, long lead times, and high cost of other inputs compared with those in Asia. Most companies located their production in SSA because of quotas on other suppliers. These quotas, combined with duty-free, quota-free access to the EU and, since October 2000, to the U.S. market, has led to increasing exports of mainly apparel items from SSA. Most companies interviewed indicated that because of the importance of quotas, it will be difficult for SSA to compete in a quota-free world. They indicated that EU and AGOA preferences will not be enough to keep the industry competitive. A number of SSA companies reported they are already losing sales in the EU market to countries such as Bangladesh, even with EU quotas in place. Most SSA firms view vertical integration as the means of survival in a quota-free world.”
Source: US International Trade Commission January 2004
[Excerpt: for full report see http://hotdocs.usitc.gov/pub3671/pub3671_I.pdf
Environmental constraints
Furthermore, in addition to economic constraints related to trade distorting global cotton subsidies, the conventional cotton sector is condemned to collapse and disappear as it is extremely polluting and is thus not ecologically and environmentally sustainable. In fact, the conventional cotton sector utilizes only around 3% of the global agricultural arable land surface but consumes annually more than 25% of all agricultural industrial chemicals produced globally (i.e. pesticides, insecticides, herbicides, fertilizers, etc.)
Note: See study on environmental impact of conventional cotton growing from Harvey Baker- the environmental director of the AUSTRALIAN COTTON FOUNDATION Title: Environmental Audit of Cotton Production in Australia
Organic cotton
With the increasing global concern for the preservation of the natural environment and the growing number of environmentally and socially conscious consumers worldwide, organic agriculture is a market that is rapidly growing. Organic agriculture in general and organic cotton specifically is a fast growing and expanding global sector and most cotton producing nations in SSA are well-suited for organic cotton production and have a de-facto Absolute Comparative Advantage in producing organic cotton due to the favorable climate, abundant land, good soil fertility, and abundant and inexpensive labor. Organic cotton is proving to be an environmental, social and economic viable alternative to the conventional cotton sector, as demonstrated by a number of successfully running organic cotton project in Africa and around the world.
Furthermore, organic cotton provides an opportunity for farmers to break away from the dependence on expensive imported agricultural inputs, thus breaking the vicious cycle of poverty resulting from unfair Terms of Trade (i.e. continuous rising prices of agricultural inputs and continuous fall in the price of agricultural commodities on the world market). Moreover, organic cotton translates into better health for both the environment and the farmers, promotes food security and self-sufficiency (crop rotation) and provides a better income resulting from lower cost (no expensive chemicals used) and higher organic cotton prices.
However, although organic cotton provides an economically viable and environmentally sustainable alternative for cotton farmers in Africa, efforts must be made to further process the organic cotton locally, from spinning yarn to weaving cloth, so as to create employment and generate income along the entire supply chain.
Proposed solution
I have personally researched and designed the following project in response to the severe crisis prevailing within both the cotton and the textile sector in sub-Saharan Africa.
Mass production vs production by the masses
My project aims to process organically grown cotton locally using simple and inexpensive hand-operated cotton processing machinery and tools throughout the supply chain– from hand-spinning yarn, hand-weaving fabrics, dyeing & printing using natural dyes, designing using designs that reflect African cultures and traditions to tailoring garments - while respecting both ecological standards of production (organic cotton, natural dyes, etc.) as well as non-exploitative labor standards, thus reaching a perfect balance between ecological standards of organic production and non-exploitative labor standards throughout the supply chain in the production of textiles and garments. This would set a new standard and an example in the global textile industry and garments thus produced would find a ready local, regional and export market within the growing number of socially and environmentally conscious consumers worldwide.
The objectives of the project are:
1) To revive the cotton and textile sector in sub-Saharan Africa through the development of a vertically-integrated economically-viable, socially non-exploitative and environmentally sustainable textile and garment industry - from organic cotton growing to garment manufacturing- for both local/regional consumption and export markets.
2) To create (desperately lacking and needed) local employment throughout the local supply chain - from organic cotton growing, picking, spinning yarn, weaving fabrics, dyeing & printing, designing, to garment tailoring - thus generating income and creating economic growth within the sector and throughout the economy, thereby effectively reducing poverty among the local population.
3) To help cotton producing nations in sub-Saharan Africa achieve self-sufficiency in production and consumption of garments using socially non-exploitative labor practices and environmentally sustainable production methods, and to provide affordable and quality clothing to the people of Africa that reflect African cultures, traditions, values and designs, made by Africans using local (organic) cotton
4) To enable African cotton farmers break free from the vicious trap cycle of trade distorting global cotton subsidies and from the dictates of the world market.
The local production of hand-woven fabrics has the potential to revive both the cotton and the textile sector in sub-Saharan Africa, from cotton growing to garment manufacturing and to provide employment and income to millions of Africans working along the entire supply chain. As noted above, the production process includes (organic) cotton growing, picking, pre-spinning slivers, spinning yarn, weaving fabrics, dyeing & printing fabrics, designing and garment tailoring. Thus, local-value addition will provide employment and generate income for millions of Africans working within each one of these sectors. Each of these activities can be carried out in both rural and urban areas using manual labor aided by the use of simple and inexpensive hand-operated cotton processing machinery and tools.
Cotton farmers can grow and sell their cotton on the local market (thus breaking free from the vicious trap cycle of trade distorting cotton subsidies and from the dictates of the world market) to locally owned and operated ginners who will gin/sliver the cotton and sell it to local hand-spinners. Hand spinners will produce hand-made yarn using a simple and inexpensive spinning wheel. Hand spinners will in turn sell their hand-spun yarn to weavers who will hand weave the yarn into fabrics using an inexpensive locally made hand-loom. Fabrics will then be dyed locally using natural dyes. African designers will design garments that reflect African cultures, traditions, values and designs and skilled local tailors will manufacture the final garment. Finally, local, regional and global consumers will have access to affordable clothing that reflect African cultures, traditions and designs made locally with local (organic) cotton and local labor using socially non-exploitative labor practices and environmentally sustainable production methods. The production and local processing of organic cotton – from cotton growing to manufacturing – constitutes an economically, socially and environmentally viable alternative solution to revive both the cotton and the textile sector in SSA.
Mass production verses production by the masses
Mass production: (centralized production)
.Exploits labor ( average wage in the "sweatshops" textile industry = $1/day for +12 hour shifts, with no social benefits and flagrant and repeated violations of basic International Labor Organization’s (ILO) labor standards.
.Capital intensive: Low employment creation level as the textile industry is capital intensive. Objective is to maximize profits; to do so, labor costs are constantly reduced by paying “slave” wages and/or reducing the number of workers employed. Thus, in this context, there is a constant inherent conflict of interest between the welfare of the workers on the one hand and the shareholders of the company.
.Kills the “human spirit” (i.e. creativity, intelligence, artistic skills, etc…)
.Environmentally and ecologically non-sustainable: Whole production process – from cotton growing to cotton processing – is extremely polluting to the environment and is thus not ecologically and environmentally sustainable.
Production by the masses (decentralized production)
.Uses non-exploitative production methods.
.Labor intensive industry: Employs a large number of people in a wide geographical area including the rural areas where unemployment is widespread. Objective is to create local employment through non-exploitative labor practices and to generate income directly for the local inhabitants.
.Respects human dignity and favors development of the “human spirit” (i.e. intelligence, creativity, artistic skills, etc…)
.Environmentally and ecologically sustainable: Uses environmentally and ecologically sustainable production methods throughout the supply chain, from organic cotton growing and throughout the processing stages ( i.e. spinning, weaving, dyeing & printing using natural dyes, to garment tailoring.)
Mahatma Gandhi’s example
The same issues surrounding the scale of production have been important in India since mass produced textiles were introduced during the British Empire. The poverty and enforced idleness that resulted at that time were devastating since people lost both the means of making a living and the basis for their way of life. Gandhi led the struggle for independence in India by advocating that everyone should wear garments made of hand spun yarn and hand woven fabrics. His work illustrates how important it can be to produce unique textiles on a small scale.
The world has changed considerably since Ghandi’s time, but there are striking similarities between the crisis prevailing within the textile sector in SSA today and the issues Gandhi struggled against within India’s textile sector half a century ago. Now, with globalization, it is necessary to deal with powerful influences from new technology and the information explosion as well as the dominance of capital costs and the productivity of labor. However, we either can choose to adopt Gandhi’s non-violent, non-exploitative, socially and environmentally friendly production methods, or we can blindly follow the journey on the tracks of globalization leading to…
As Mahatma Gandhi rightly said:
“You cannot build a non-violent society on exploitation;
exploitation is the essence of violence.”
KING LEOPOLD II OF BELGIUM'S SPEECH TO BELGIAN MISSIONARIES ON THEIR "CIVILIZATION" MISSION IN THE CONGO...
Copy of a speech delivered by King Leopold II of Belgium in 1883 to belgian missionaries who were about to embark upon their "civilizing" missionary journey to the Congo (DRC).
"Revered Fathers and Dear Compatriots, the task asked of you to accomplish is very delicate and demands much tact and diplomacy. Fathers, you are going to preach the Gospel, but your preaching must be inspired by first, the interest of the Belgium government state.
The main goal of your mission in the Congo is not to teach the African (Negro) the knowledge of God, because they already know him.... Your role essentially will be to easily facilitate the task of the administrative and the industrial personnel. That is to say, you will interpret the Gospel in the way to protect and serve the interest of Belgium, in that part of the world. To do so, you will see that our savages be not interested in the riches that their soil possesses in order that they not want them. Thus they will not be involved in the murderous competition with us and dream to live a luxurious life. You will take them away from anything or act that procures them with the courage to confront us... Your actions will be essentially on the younger people that they might not rebel We must force them into submission and obedience Avoid, by all means, the Blacks becoming rich. Cause them to sing each and every day that it's "impossible for a rich man to enter into Heaven." Make them pay tithes each Sunday for church. Utilize this money that is intended for the poor, for our own business investments. Teach the Africans to forget about their heroes in ordre to worship and give praise to ours.
My Dear compatriots, if you apply to the letter all this, the interest of Belgium in the Congo will be protected for many centuries. I thank you."
Over 100 years later, not much has changed; Belgium's missionaries' "civilizing" mission has been replaced by Belgian and other European bureaucrats preaching "democratic" and "good governance" lessons and "free market" economics...The tools and methods have changed, the aim remains unchanged... The chains and whips of belgian colonialism have been
replaced by more subtle and powerful chains...
"Revered Fathers and Dear Compatriots, the task asked of you to accomplish is very delicate and demands much tact and diplomacy. Fathers, you are going to preach the Gospel, but your preaching must be inspired by first, the interest of the Belgium government state.
The main goal of your mission in the Congo is not to teach the African (Negro) the knowledge of God, because they already know him.... Your role essentially will be to easily facilitate the task of the administrative and the industrial personnel. That is to say, you will interpret the Gospel in the way to protect and serve the interest of Belgium, in that part of the world. To do so, you will see that our savages be not interested in the riches that their soil possesses in order that they not want them. Thus they will not be involved in the murderous competition with us and dream to live a luxurious life. You will take them away from anything or act that procures them with the courage to confront us... Your actions will be essentially on the younger people that they might not rebel We must force them into submission and obedience Avoid, by all means, the Blacks becoming rich. Cause them to sing each and every day that it's "impossible for a rich man to enter into Heaven." Make them pay tithes each Sunday for church. Utilize this money that is intended for the poor, for our own business investments. Teach the Africans to forget about their heroes in ordre to worship and give praise to ours.
My Dear compatriots, if you apply to the letter all this, the interest of Belgium in the Congo will be protected for many centuries. I thank you."
Over 100 years later, not much has changed; Belgium's missionaries' "civilizing" mission has been replaced by Belgian and other European bureaucrats preaching "democratic" and "good governance" lessons and "free market" economics...The tools and methods have changed, the aim remains unchanged... The chains and whips of belgian colonialism have been
replaced by more subtle and powerful chains...
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