Fairtrade and Cotton Farmers in Mali

An FT Magazine article last weekend investigated whether Fairtrade has improved the life of cotton farmers in Mali, a West African country.

Fairtrade works like this:

In coffee, for example, the grower of any arabica (higher-quality) coffee beans is guaranteed whichever is the higher of $1.26 per pound or five cents above the world market price, which is currently around $1 per pound. [Farmers'] cooperatives are also paid a variable "social premium" to be spent collectively on projects of communal benefit.

Does this work for Malian cotton farmers? In early June, Alan Beattie, the article author, visited Batimakana, a village in Kita - "a region that will supply cotton for M&S jeans."

Every third or fourth dwelling [which is a typical Malian hut of mud, thatch and straw] has a motorbike outside - a lifeline more than a luxury, given that the nearest medical clinic is 10 kilometers away.

The male elders of the village are swathed in robes and turbans and dignified with venerable age, several with eyes rheumy or sightless from river blindness disease.

For a kilo of raw cotton, the Fairtrade minimum price is 36 eurocents; this year conventional cotton will fetch 24 eurocents.

It lets families send children to school. It means they can buy seeds fro vegetables and ox-drawn ploughs for their fields. It also ... bought the plastic chairs that the translators and [the FT correspondent] are sitting on.

How about the effect of paying "social premium"?

[T]wo years' worth of social premium has built a concrete grain store. ... The village uses the store to prevent big swings in food prices, buying grain cheaply after harvest and releasing it gradually through the year.

In Dougourakoroni, another Fairtrade certified community in the region, the rremium has built a brick school in the village. Previously, children had to walk 7km to school, and fewer attended.

Critics argue that Fairtrade, by paying above the market price, "encourages farmers to stay in unprofitable sectors, inducing oversupply and pushing down prices for everyone else." Does it?

Since cotton is a greedy plant that strips the soil of nutrients, it has traditionally been rotated with other crops, and that has not changed.

In Batimakana, just as before, only 20 percent of the land is used for cotton.

Any co-operative growing any product anywhere in the world can sell only as much at Fairtrade prices as has been ordered from that co-operative by buyers. Cotton is an annual crop, so farmers know their demand before planting. ... If farmers produce more than contracted under a Fairtrade agreement, they can sell the rest at conventional prices, but are not guaranteed to make money from it [because all of Mali's cotton is bought by the state marketing board, which sells it on to the big cotton brokers of Europe and America and is criticised for passing less than half the export earnings on to the farmers].

It seems to be the state marketing board that hinders diversification:

[I]t does deliver seeds, pesticide and fertiliser to farmers on credit ... and collects the cotton after harvest. Malian farmers growing other crops will often also contract to grow cotton because it is their only source of fertiliser.

So everything with Fairtrade is rosy? Turn to the long-term future:

Mali is struggling to rebuild the fully integrated cotton-to-clothing industry it once had before it was blown away by Bangladesh and China. [B]ecause the batch needs to be kept separate, spinning Fairtrade lint requires a faintly bizarre and time-consuming ritual. Every machine has first to be shut down and cleared of conventional cotton from the previous run before the Fairtrade bundles are fed in. It can take several days to do the switchover, and ... some Fairtrade batches are too small to make it worthwhile.