Cotton Club
2009/06/02
Purchaser Cartel
A "Demand Alliance" comprised of numerous German textile retailers, such as Baur, Peek and Cloppenburg, Puma, Quelle and Tchibo, with the name "Cotton made in Africa" was founded early last year in Hamburg at the initiative of the board chairman of the Otto Corp., Dr. Michael Otto. The declared objective of the "project" is "creating, focusing and securing" the purchase of African cotton with the intention of having a wide-ranging "impact on production conditions."[1] "Cotton made in Africa" will be financed by the participating enterprises, the Bill and Melinda Gates Foundation and the German Ministry of Economic Development and Cooperation (BMZ) - with the latter contributing six million Euros. German "development aid organizations" are prominently represented on the advisory committee of this purchaser cartel. Representatives of the German Association for Technical Cooperation (GTZ) are present alongside those of the German Investment and Development Association (DEG).
Gene Manipulated Cotton
The plan is to link nearly 265,000 small farmers in West and South Africa to the cartel. According to the initiators, "entire village communities" in Burkina Faso, Benin and Zambia have "signed contracts to the project".[2] They are receiving "Cotton made in Africa" vocational courses on "efficient farm management" to empower them to "raise their yields significantly." In return the farmers must commit themselves to follow particular guidelines on the use of fertilizers, herbicides and pesticides. The cultivation of gene manipulated cotton is deliberately not excluded, as a matter of principle. The "guidelines" established by the project's initiators, merely state that "when gene manipulated cotton is present or is introduced in a region; it should not harm development opportunities of other (non-gene manipulated cotton) growers."
A Genuine Business Case
"Cotton made in Africa" admits not aiming at enhancing the industrial capacities in African countries to process their cotton themselves. Otto-Manager Christian Barthel explains that the export of cotton in its raw state for "spinning and textile processing around the world" will "remain the core of the project." Since each participating company "has its production capacities and marketing structures already in place", the capacity to "influence Demand Alliance partners to keep spinning and manufacturing in Africa" has been very "limited".[3] According to Uwe Schröder, Chairman of Tom Tailor Holding AG, a partner of the Demand Alliance, "Cotton made in Africa" is not a conventional development project, but a genuine "business case": "European textile companies use it to produce competitive, profitable products."
Market Power
"Cotton made in Africa's" central driving force is to enhance the competitiveness of the German textile business. The project aims at breaking US "predominance" on the global cotton market. According to those in charge of the project, the United States is the "world's leading exporter of cotton", because it is paying three to four billion US-dollars in subventions to "its own [cotton] farmers".[4] This newly formed purchasers' cartel plans to counter this "lack of a level playing field" with the "concentrated power of consumers and retailers." In their drive for expansion, the German textile retailers are also hoping for rising oil prizes, declaring that this would make the production of synthetic fibers more expensive and therefore "firm up the price of cotton" in the "medium term." According to its own publication, "Cotton made in Africa" is calculating the purchase of 60,000 tons of African cotton by 2010, enough to produce 200 million T-shirts and, a long-term purchase increase to 200,000 tons.
Ecological and Social
The "Cotton made in Africa" purchasers' cartel's market power is flanked by the inclusion of important NGOs. The German Agro Action, the Nature and Biodiversity Conservation Union (NABU) and the Worldwide Fund for Nature (WWF - Germany) are "partners" in this "project". Their task is to insure German customers buy the "cotton cartel's" products - by promoting them as allegedly cotton garments from ecological and socially "sustainable production".[5]
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