The lack of liquidity caused by the financial crisis has led to a decline in demand and prices for cotton and other raw materials in the international market. This has also taught African countries and cotton farmers a vivid lesson on how to face this situation.
Based on the current difficulties, African countries have proposed to consider extending the industrial chain, deep processing of cotton, and increasing the added value of products. Africa’s cotton output has not yet exceeded 1 million tons and cannot meet the needs of the African people. Therefore, the cotton deep processing industry should have a broad market space.
They believe that the remarkable economic development achievements of China, Brazil, and India are recognized by the world because the above three countries have complete industrial processing chains and can deeply process primary products. The vast majority of Africa’s export products are raw materials, and it has its own weaknesses in this regard, that is, 70-80% of the population so far cannot meet the most basic food and clothing problems. If survival is not guaranteed, how can we talk about development?
In addition, African cotton farmers are worried that the current financial crisis will trigger a new wave of subsidies from Western countries. The financial situation of African governments is already poor, and now it is even worse. It is impossible to increase taxation projects at present, let alone subsidies.
Based on this, some people have keenly realized that in the past few decades, Africa has experienced frequent wars and turmoil, lacked a peaceful environment for economic development, and missed the historical opportunity of world industrial transfer and division of labor adjustment, leading to a whole generation of people obsessed with To use force, the slogan “No submachine guns, but production machines” was put forward.
The common reflection of African countries is that one of the bottlenecks in the development of the cotton industry is that the prices of related production materials remain high, which directly leads to the lack of competitiveness of cotton products. The problem is even more prominent in the context of the current international financial crisis. The main reason is that in the existing international division of labor and trade system, Africa is in a “subject” position. This is specifically reflected in the following three aspects:
1. Africa has a low self-sufficiency rate in means of production and is overly dependent on imports. Africa has long relied on Europe for the supply of means of production and is far from self-sufficient. The upstream control of the industrial chain is in the hands of European and American companies, which fundamentally explains the reason for the high prices of production means.
2. Africa is the source of raw materials and sales market in terms of means of production. Although Africa is rich in natural resources and reserves of raw materials, it has been developing slowly in manufacturing means of production. The African Union proposed a few years ago to develop the manufacturing industry of means of production in order to get rid of dependence on the West. However, countries lacked the common political will to act in a unified manner, so it has remained at the discussion stage and no specific measures have been introduced. As for Western manufacturers, as vested interests in the current international division of labor and trade system, they are accustomed to importing raw materials from Africa, producing finished products in their own countries, and then returning them to Africa for sale. They have also made huge profits and are powerful.
3. There is a lack of coordination among African countries’ organizations. The chairman of the African Cotton Producers Association (APROCA) said that African countries can consider changing the current method of separate procurement and excessive unit prices, adopting a “group purchasing” method, and coordinating to enhance the voice and initiative of African buyers in negotiations. The monthly purchase budgets of cotton-producing countries such as Benin and Burkina Faso are around 200 million West African CFA francs. If joint purchases can be made through “group purchasing”, prices will definitely drop significantly from the current level.
