BORGEN PROJECT - THE POLICIES THAT CREATE POVERTY

Policies
In an increasingly intertwined world, domestic policies in one country (usually
wealthy ones) often increase poverty in other nations (usually poor ones). By all
accounts the U.S. could do more good for developing nations by changing domestic
policies than it does with the amount going to international aid.

The Cotton Industry
and Africa's Poor
In 2001, the U.S. Cotton
Industry received $3.6
billion in government
support.

Because the U.S. is the
world's largest cotton
exporter, accounting for
40 percent of the world
market, these subsidies
lowered world prices by
approximately one quarter.

In Benin, the price decline
associated with American
subsidies translates into a
4 percent increase in the
incidence of poverty, or
250,000 people falling
below the poverty line.

Burkina Faso loses more
because of U.S. subsidies
than it gets in debt relief.

In West Africa alone
10-11 million people
depend on cotton
cultivation as a source of
income.

Learn More about Cotton
and Poverty

Unfair and Unbalanced
When developing countries export to
rich-country markets, they face tariff
barriers that are four times higher
than those encountered by rich
countries. Those barriers cost them
$100 billion a year - twice as much as
they receive in aid.

Policies in a Nut Shell
Beyond costing taxpayers billions of
dollars a year, corporate welfare
often devastates impoverished
nations. A report by Oxfam found the
United States could do more good for
Africa by eliminating subsidies to the
U.S. Cotton Industry than it does
with aid to all of Africa.

Charity for the Wealthy
In the U.S. and EU the biggest 7
percent of farms receive over 50
percent of farm subsidies. Subsidy
distribution to agricultural producers
in Europe and America is more
unequal than income distribution in
Brazil, one of the world's most
unequal countries.

Lobbying Pays
Each year, industrialized countries
provide over $300 billion in support to
their agricultural producers—roughly six
times the amount they spend on aid. The
amount is more than the total income of
the 1.2 billion people in the world living
on less than $1 a day.

The Power of One
If Africa, East Asia, South Asia,
and Latin America were each to
increase their share of world
exports by one percent, the
resulting gains in income could lift
128 million people out of poverty.

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