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STEVE INSKEEP, host:

It's MORNING EDITION from NPR News. I'm Steve Inskeep. Good morning.

This week on MORNING EDITION, we've been asking what holds back Africa? It's the world's poorest continent, and it has stayed poor even as other parts of the world have become richer. One longstanding complaint by African governments is that agricultural subsidies in the United States and Europe are hurting African farmers. We have the final report, this morning, in this series from NPR's Jason Beaubien who spent four years in Africa. He recently traveled to Mozambique to examine how Western farm support programs and trade practices affect cotton producers there.

JASON BEAUBIEN: The cotton crop in northern Mozambique has just been harvested, piles of fluffy white buds are spread out on banana leaves in Americo Candido Asan's field.

Mr. AMERICO CANDIDO ASAN (Cotton Farmer): (Speaking Foreign Language)

BEAUBIEN: The thin, lanky 35-year-old shows how the cotton will be stuffed into large burlap bags. Candido plants five acres of cotton each year in fields several miles outside of town. Candido does all of the work in his field by hand. Once a year, at harvest time, the local cotton company sends a four-wheel-drive truck to pick up his sacks of cotton.

Mr. ASAN: (Speaking Foreign Language)

BEAUBIEN: After the bags are full, Candido says, we sew them shut and the company will collect them.

Cotton is grown in several parts of Africa. Here it's a major crop in South Africa, Zimbabwe, Malawi, and Tanzania, as well as Mozambique. There's also significant cotton production in West Africa, particularly in Mali, Burkina Faso, and Benin. But the African cotton industry is in crisis. Producers say billions of dollars in U.S. subsidies to American farmers have pushed down cotton prices so sharply that African growers can barely make a profit. Candido says the system is unfair.

Mr. ASAN: (Speaking Foreign Language)

BEAUBIEN: Here in Mozambique, we don't have any help from the government, Candido says. So if they have subsidies, it means American farmers have everything prepared for them. But here, we are using our own money, our own labor, and the price always becomes lower and lower because of them, the Americans. It's not fair.

Cotton exporters say this part of northern Mozambique should be able to sell cotton at competitive prices. It has plentiful rainfall; labor, at about a dollar a day, is cheap; the main roads have been rebuilt after a lengthy civil war and are in excellent shape by African standards. There's a functioning railway linking the area with a port on the Indian Ocean. But growers complain they're barely making a living from their crops. And in recent years, several large cotton companies have gone out of business.

Mr. ISSUFO NURMAMADE (Owner, Sanam Company): (Speaking Foreign Language)

BEAUBIEN: Issufo Nurmamade, the owner of a cotton company called Sanam in the city of Nampula, lists the numerous firms that have recently closed down.

Mr. NURMAMADE: (Speaking Foreign Language)

BEAUBIEN: He says he hasn't made a profit off of cotton fiber in three years. His business is only staying afloat because he produces and markets cotton seed oil for the domestic market.

Mozambique exports all of its cotton fiber. The country used to have factories to spin cotton into thread, and there were even several textile factories producing clothes, but they've all shut their doors.

The majority of Africans earn a living, sometimes just a subsistence living through agriculture. Mohammed Lamine, with Oxfam in Dakar, says the billions of dollars in subsidies paid each year to farmers in the U.S. and Europe are undercutting African farmers. And it's not just affecting cotton. Lamine says that cheap, subsidized powered milk from Europe has flooded West African markets.

Mr. MOHAMMED LAMINE (Oxfam, Dakar): If you go through the countryside, you know, in Senegal, or in Mali, or so on and so forth, you will not be able to find local milk, I mean, nowhere. Nowhere. Because the powdered milk has been, has destroyed the whole dairy sector in West Africa.

BEAUBIEN: Lamine says the agricultural policies of the world's richest nations are choking economic development in some of the poorest countries on the globe.

A typical African cotton farmer will earn $300 to $400 a year from his crop. Usually he'll grow other food crops, corn, casaba, peanuts, to feed his family. But cotton may be that farmer's only avenue to cash.

Oxfam estimates that between 2001 and 2003 alone, U.S. subsidies cost African cotton growers roughly $400 million. Lamine says eliminating all cotton subsidies could raise world prices for the commodity by 10 to 12 percent.

While an extra $30 or $40 a year might mean nothing to a Western farmer, Lamine says it would be significant for Africans.

Mr. LAMINE: Saying that if you get rid of all these total subsidies producers will be rich, that's not what we are saying. But let's get rid of one of the major factors that are contributing to the impoverishment of the cotton producers in Africa.

BEAUBIEN: Despite falling cotton prices, U.S. cotton production rose 40 percent between 1998 and 2001. Lamine says this extra cotton is being dumped on the global market at below the cost of production. Last year, the World Trade Organization upheld a ruling against the U.S., stating that American cotton subsidies are illegal. U.S. has moved to eliminate export subsidies, but under the Farm Bill, which expires in 2007, the vast majority of payments to U.S. growers continue.

Back in Mozambique, cotton producers say it's not just agricultural subsidies that are stacked against them. They say the West also dumps secondhand clothes into Africa at prices that stifle local textile production.

On the outskirts of Nampula, used clothes sellers line the road. Blue jeans are hung upside down from small stalls, baby clothes are piled on plastic tarps, there are mounds of socks, heaps of underwear. Josey Castro(ph) is selling T-shirts and shorts, and he's draped his wares over a web of bamboo poles.

Mr. JOSEY CASTRO (Salesman): (Speaking foreign language)

BEAUBIEN: He says he buys the clothes in 100-pound bales from a distributor in town and then sells each shirt or pair of shorts for roughly a dollar apiece. On this day, all of Castro's shirts appear to have come from the Midwest. There's one from the 22nd Annual Detroit Free Press Flagstar Bank Marathon, another from the Walk/Run for the Make a Wish Foundation of Wisconsin. There are competing T-shirts from the University of Michigan and Notre Dame. Another says, Cynthia's Big Bucket of Pasta Birthday Bash, Labor Day Weekend, 2001.

Mr. CASTRO: (Speaking foreign language)

BEAUBIEN: Most people like the shirts with logos, Castro says, but then last week I also sold a lot without any lettering.

In almost every market in Africa you find similar piles of secondhand clothes: polo shirts from bygone corporate picnics; blouses that were once in fashion, or at least looked good in the store; jeans that grew a bit too tight. These castoff clothes, combined with cheap imports of new garments from China and India, make it nearly impossible, business people say, for domestic textile production to develop in Africa.

Vincent Marush Sando, who coordinates a cotton promotion campaign in Mozambique's capital, Maputo, says Africa should place stiff import duties on used clothes from the West.

Mr. VINCENT MARUSH SANDO (Maputo, Mozambique): If you see these secondhand clothes, they're very cheap here. They're very cheap, and the government is failing to protect the marketing.

BEAUBIEN: He says the bigger problem is that African nations have very little influence over he flows of global trade. And as Africans try to find their niche in the world marketplace, he says, the system always seems to be working against them.

Jason Beaubien, NPR News.

INSKEEP: Jason has finished his four years in Africa, and you can hear his entire series on Africa's lagging development by going to npr.org.

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