It is impossible not to take advantage of Erik Orsenna’s recent testimony before the Senate Commission for Economic Affairs to recommend his book “Journey to the Lands of Cotton, A Brief Manual of Globalization” once again!
The commercial success of the book demonstrates moreover that it is still possible to explain the most complex economic questions to French readers and show them the strategic importance of agriculture!
From the “survival of millions of Africans” whom, unable to make a living from agriculture, contribute to the pauperization of cities and eventually the flow of emigration, to the Brazilian ambition of becoming the “world farm” and the “Uzbek silk road”, Erik Orsenna provides a brilliant presentation of the stakes in a sector that Europe considers as a mere budgetary adjustment variable and a source of fruitless spending for the future!
How can we not anticipate the consequences of the decrease of arable land in Egypt, China and eventually in all the major regions of the world, classifying agricultural production as “world heritage for 9 billion men and women in 2050”? Indeed, we must never forget that the first asset of mankind is, above all material goods, food and therefore agricultural production!
“Journey to the Lands of Cotton”, as Erik Orsenna rightfully points out, also provides exemplary insight into the excesses of globalization without any rules other than those that the free market imposes on mankind.
I cannot resist quoting a football metaphor that Erik Orsenna uses in his book to raise awareness of the importance of rules: “Imagine a match without a referee, played in the dark and where the stakes were a matter of life or death? Who would play by the rules?”
It is in this spirit that we question the major international institutions in order to know when and how they will officially recognize that “in a world without economic borders, salaries as well as sanitary, social and environmental standards” could “constitute as many factors of unfair competition as exchange rates”.
At a time when high-ranking officials and economic policy makers are becoming more aware of the problems caused by the highly unfair redistribution of the “dividends of globalization”2 , this book is one of the testimonials “combining the vision of a philosopher, writer and economist” that, we hope, will mark a turning point in the political conception of globalization.
If the environment and energy are now classified as “values to protect or to save”’, the first being moreover highly dependent on the management of the second, it is high time we understood that the absence of rules for international exchanges will place agricultural products one day on the “endangered species list”!
Referring to his experience as a professor of international financial economics and ministerial advisor specialized in raw materials, Mr. Erik Orsenna indicated that the problem of cotton, which is at the heart of his journey, concealed fundamental economic questions. He added that this raw material provided work for hundreds of millions of people worldwide and that it was the last important natural fiber – used ten times more than linen or wool. He specified that his research had led him to examine agricultural, commercial, financial, legal, and scientific questions, his discoveries having exceeded his expectations […].
M. Erik Orsenna then went on to present the itinerary of his journey to the lands of cotton that started in Africa and ended in the Vosges in France. He reminded his audience that his study had lasted almost two years and that it had been made possible thanks to his personal network.
Concerning his journey in Africa, and in particular Mali, Burkina Faso, Chad and the Central African Republic, Mr. Eric Orsenna insisted on the dependence of these States on cotton, which serves as a monetary surplus. He underlined the fact that this fiber, which is sold on international markets, is a major source of currency that is reinvested in animal husbandry and other crops, but also that cotton seeds are used as animal feed and to produce oil. He then highlighted the importance of the technical aspects of cultivating cotton by reminding us that this was carried out, in the African countries he had visited, by companies organized like large kolkhozes. Noting that even if they were wasteful and often competitive, these organizations fulfilled real public service missions by building roads or dispensaries and providing training. He added that their planned privatization would inevitably be accompanied by an erosion of the social services they provide.
Mr. Erik Orsenna also said that, for these countries, the survival of millions of people still depends on cotton production. He estimated that its collapse would cause a massive rural exodus leading to pauperization in the cities and, in the end, an increase in emigration flows. He then insisted on telling the members of the commission the reasons behind the deficit the West African cotton companies are currently experiencing.
The first reason is the $3.5 billion in annual subsidies that the United States pays out to its cotton farmers. Since its textile industry has virtually disappeared, the United States is now the leading exporting country in the world for cotton and its exports are driving world prices down which, because of this, are undervalued by about 15%. Mr. Erik Orsenna regretted that the joint claim filed by Africa and Brazil with the World Trade Organization (WTO), which led to the condemnation of the United States, had not however put an end to these illegal subsidies. He explained that abolishing them would raise prices for cotton producing countries. If that were the case, highly responsive countries like Brazil would undoubtedly increase cotton production, since it would be more profitable, and reduce the land devoted to the cultivation of soy beans, which implied that a rise in cotton prices would not benefit Africa in the long term. Mr. Erik Orsenna finally broached the question of training for farmers, recognizing that this was essential to improve yields and, indeed, as important as action to prevent soil depletion.
In his opinion, the second reason behind the African cotton producer’s deficits stems from fixed Euro/CFA franc parity which is not discussed much nowadays. Mr. Erik Orsenna wondered if it were appropriate to link, monetarily, the world’s poorest countries to one with the strongest currencies. He specified that with the price of cotton set at around 58 cents a pound, and a euro/dollar parity of 1.35, African cotton companies were in the red, whereas with parity set at 1.15 all the companies would clear a profit. He pointed out to the members of the commission the resulting economic instability for African cotton producing countries.
Mr. Erik Orsenna then insisted on the importance of awareness campaigns and training on these questions. Regarding this point he called attention to the Cotton University he has contributed to create, via the Foundation for world agriculture and Rural Life (FARM), and whose aim is to train peasant confederations as well as the African elite in trade and economic progress. He reminded the commission that the France-Africa summit would be held on the 15th and 16th of February 2007 in Cannes and that he would be holding a half-day session devoted to raw materials. He went on to explain that he was currently trying to express his concerns to the president of France, the president of the European Commission and the European Commissioner for Development and Humanitarian Aid.
Mr. Erik Orsenna continued to recount his trip to the United States. He underlined that the current cotton producing states – California and Texas - are not traditional regions for this crop (historically they are Alabama and Mississippi) and defended the theory according to which this change was linked to the political importance of these new cotton producing states and the influence of their agricultural lobbies. Pointing out that the United States ensured one quarter of the world’s cotton exports, he questioned the drilling in water tables that these cotton crops caused and expressed doubts as to the sustainability of this practice, regretting the negligence of American authorities in this area.
Mr. Erik Orsenna then described his trip to Brazil, and more precisely to the westernmost part of the country. He confirmed that Brazil could be considered as the world’s farm and called attention to the impressive vibrancy of this large South American country. He said he was struck by the boom in genetic engineering techniques, mentioning that the Brazilians had inserted arachnid genes in cotton seeds, notably to create stronger, more flexible material. He mentioned that these materials had great potential for the aeronautics industry.
Mr. Erik Orsenna then went on to tell the commission about his trip to Egypt. He highlighted the importance of demographic pressure, noting the increase over several years of the ochre color of the towns and the decline in the green color of subsistence crops. He then wondered about the consequences of this decrease in viable land, making a link with China which is also facing a decline in arable land. Mr. Erik Orsenna then asserted that because of the length of its fiber, Egyptian cotton was the most beautiful cotton in the world. He underlined the paradox that has led this high-quality end product to be sold at such a high price that Egypt has to import low quality cotton for its own population.
Mr. Erik Orsenna then went on to describe his trip to Uzbekistan, highlighting the multiple influences that have forged this country at the crossroads of the civilizations of “The Silk Road” and the fact that its water resources – which cotton requires in abundance - are vast, due to the relative proximity of the Himalayas. Mr. Erik Orsenna nevertheless put forward the idea that, in the long term, water shortages would arise causing conflicts among the population. He then explained that the Uzbek regime had opted for state control of cotton, establishing a parallel with Russian management of energy. He underlined that even though India, Pakistan and China possessed textile industries, these states did not necessarily have enough raw material to meet production needs. Therefore, referring to cotton as “white gold”, Mr. Erik Orsenna considered it could become a strategic weapon for Uzbekistan. He nevertheless deplored that this manna of raw materials, instead of being a development factor for countries that naturally possessed it, was more often than not a curse.
Continuing with his study in China, Mr. Erik Orsenna underlined that to earn a salary of around 100 euros a month, workers had to toil seven days a week and between 12 and 14 hours a day. However, in spite of these difficult working conditions, city dwellers considered themselves better off than rural populations who experience even greater misery. We are reminded, moreover, that the Chinese economy was largely dominated by a state that acted as the world’s largest commercial bank. Recognizing the great capacity of a state to boost an economy, he noted that the state, even in liberal economies such as Brazil, was omnipresent.
Mr. Erik Orsenna ended his talk by describing the last stage of his survey in the Vosges where he observed that international competition was just as intense. He noted that, in a world without economic borders, salaries as well as sanitary, social and environmental standards could constitute as many factors of unfair competition as exchange rates.
Mr. Erik Orsenna concluded by questioning the need to revaluate the Chinese currency. He pointed out to the commission members the interdependency that is characteristic of globalization, considering that the revaluation of the Yuan, while necessary, would nevertheless have negative consequences: the ability of China to compete would be diminished, notably in textiles, which would diminish proportionally the capacity of China to buy Airbus planes from Europe and finance the American debt.
M. Charles Josselin was pleased with the interest demonstrated by our fellow citizens in economics. He declared that the issue of cotton was particularly painful for him in that he had, albeit under pressure from international institutions, assisted in the dismantling of the channels which, it is true, fueled government corruption but had the merit of providing producers with security. He expressed his agreement with the analysis developed by Mr. Erik Orsenna, estimating that the disappearance of the social structure associated with cotton production channels was the source of current difficulties. He then put forward that an opportunity lies in the upcoming revision of the Cotonou Agreement and, concerning this point, he specified that he had been mandated by the delegation for the European Union to write a report in view of the negotiations, Mr. Jean-Claude Lefort having carried out the same assignment for the National Assembly. Concerned about a premature application, as early as 2007, of the principle of free trade to commercial relations between Africa and the rest of the world, he considered that cotton was at the heart of the matter. He also pointed out the importance of WTO agricultural negotiations that should not be underestimated. On the possibility of severing the connection between the CFA franc and the Euro, he warned against the consequences of such a major change. Finally, he congratulated Mr. Erik Orsenna on the setting up of the foundation he had presented.
Mr. Paul Raoult judged that the debate was really about export and subsistence crops and by promoting export crops African countries became dependent on a poorly controlled world market. He therefore wondered if supporting the cultivation of cotton would indeed improve the fate of African farmers.
Mrs. Odette Herviaux pointed out that the consequences of cotton crops on the environment were well known, notably around the Aral Sea, and asked Mr. Erik Orsenna if he had been able to touch on this question during his trip to Uzbekistan. She then noted the relevance of his remark on the limits of arable land, bringing up, in light of this, the possibility of developing a form of “sustainable productivism”.
Mr. François Fortassin said he was quite sensitive to the unusual vision of globalization presented by Mr. Erik Orsenna. Citing the continuous drop in raw material prices over the last 50 years, he estimated that it had led to the ruin of raw material producers and foretold of more catastrophes in the future if they were not protected.
Mr. Gérard Le Cam deemed that the food wars had already started and was concerned by the drop in European agricultural subsidies that could be expected in light of the latest declarations by Mrs. Mariann Fischer Boel, European Commissioner. He therefore wondered how Europe planned to substitute for subsidies in order to protect farmers against the resulting loss in revenues. He then asked what means could provide the WTO with real power and real objectives, other than simply reducing customs barriers.
In his answer, Mr. Erik Orsenna presented several of his convictions:
> the question of agriculture is central in that it crystallizes the relationship between people and their identity as well as the passing of time and the weather and it is the link between space and time. The capacity of a people is linked to its relationship with time: a circular relation in Africa, a linear one in Brazil, a combination of both in China, a country that wants to regain the position it occupied three centuries ago…;
> concerning environmental stakes, we must distinguish between two categories of cotton: rain-fed cottons, cultivated in Brazil, and irrigated cottons like those cultivated in Uzbekistan. Each of these categories has a different relation to water, not to mention their diverse relations in terms of insecticides and pesticides which have led to the use of plant biotechnologies;
> the low prices of raw materials should be aligned to the low cost of transporting goods exchanged internationally door to door, which benefits players who take advantage of international competition. This is also an argument for agriculture which, because it is linked to the land, confines producers to their homes;
> it would be preferable to have textile channels in Africa. Nevertheless, they are incapable of existing without state protection, which is impossible due to corruption and otherwise weakened by the perverse effects of charities that donate clothing. Parity of the CFA franc is, of course, a form of protection, but because it creates dependency the issue is worth debating;
> 2007 will be a year of capital importance because a European cooperation policy based on economic partnership will be defined (Economic Partnership Agreement).
Source : Account of testimony provided by Mr. Erik Orsenna published in the Senate Commissions bulletin n°12, 13th January 2007 (www.senat.fr)
1 Voyage au pays du coton ; petit précis de mondialisation
2 Larry Summers: “Redistributing the dividends of globalization is currently the most important question facing developed democracies”