Egypt : World Finest Cotton Growers Struggling on Price Front

Egyptian cotton is considered as world's finest cotton, but farmers are struggling as they can't earn enough growing it to even cover their costs.

In the 19th century, cotton made Egypt rich. The U.S. Civil War sent prices soaring and export revenues were used to help pay for railroads and palaces and the Suez Canal.

Minister of Foreign Trade Youssef Boutros Ghali told the Textiles Council last month that he was considering upping imports of lesser-quality cotton to keep factories supplied.

Cotton imports and cloth made from them must be kept separate from locally produced material "to maintain the excellent reputation of Egyptian-made cotton garments abroad," the state-run Egyptian Gazette quoted him as saying.

Egyptian cotton's extra-long fibers allow it to be spun tight to produce fine, lustrous threads. It sells for roughly three times the price of standard cotton, such as that grown in the American South.

But a new hybrid known as American Pima, grown in California and the arid Southwest, has left Egypt with little more than a third of the market.

Competition from China, the world's largest producer and consumer and a new entrant to the World Trade Organization, also bodes ill for Egypt's rural farmers, known as felaheen.

The government, which controls the cotton trade, announced last week it would pay about $60 per qantar of cotton this year. A qantar, an Egyptian measure of weight, is equal to 110 pounds.

That's up from a recent low of about $46, but still not enough to tempt the felaheen back to growing what used to be known as "white gold."

Only 700,000 acres are planted with cotton these days, down from more than 1.5 million in the 1970s. Production dropped more than 13 percent last year to about 600 million pounds, according to the U.S. Department of Agriculture.

Ghali, the trade minister, hopes to increase the area devoted to cotton by 600,000 acres. The government is looking into ways to increase production to meet rising demand and hopes to have a plan by this summer, he said.

According to the Textile Council, more than 2,000 textile and weaving factories employ a fifth of Egypt's work force.

Cotton and textiles are the country's second-biggest export, after petroleum. That amounted to $678 million last year, according to the council, which was asked by Ghali to conduct a study on obstacles to increased production.

Farmers say it comes down to money.

Michael Gabriel figures a price of $85 per qantar would be his break-even point. He and his wife, Mary, turned their 15 acres in Fayoum, a district some 50 miles southwest of Cairo, over to wheat seven or eight years ago.

Cotton is labor-intensive and needs up to 11 months to grow, meaning only one crop a year. Wheat matures in six months, after which they grow clover to feed their cows.

"With wheat we make money, and we use it for ourselves too," he says, sipping tea on the porch of the family house next to the livestock yard.

With so much cotton flooding the market from subsidized Western farmers and developing countries in central Asia and elsewhere, there's little chance of world market prices rising much.

Thus, Gabriel concedes, the cash-strapped Egyptian government's hands are tied. "They can't increase the price they pay us because they will lose money."

Still, he mourns the days when cotton was king.

"It's a very bad thing," he says. If Egypt stops growing cotton, "our whole history will be gone."