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III. STATE CONTROL AND LIBERALIZATION OF COTTON PRODUCTION
Although it has lost ground in recent years, Egyptian cotton still commands over one-third of the world market for long-staple and extra-long staple cotton, and is Egypt's most lucrative export commodity after oil.2 The value of Egyptian cotton lies in its strength and elasticity, which allows it to be woven much more tightly than other strains. It is also the most time consuming and labor intensive cotton strain to cultivate, requiring seven to eight months to grow and manual harvesting.3 Egypt's cotton crop is overwhelmingly the product of small farms. A 1997 government study found that nearly 70 percent of farmers cultivated an area of less than one acre each and just over 20 percent cultivated between one and three acres.4 Until the mid-1990s, however, the Egyptian state played a formidable role in cotton production: it determined the amount of land that would be allocated for cotton farming, monopolized the supply of seeds, pesticides, and other inputs, fixed the prices farmers were paid for their crop as well as its export price, and had exclusive control over the marketing of cotton. This authority was exercised at the local level through agricultural cooperatives, village-level institutions that were established through the First Agrarian Reform of 1952 and which continue to play a significant, albeit reduced, role in cotton production.5 Formally participatory institutions, in which membership is mandatory for most farmers, the cooperatives are in effect local arms of the agriculture ministry. The ministry designates the director of each cooperative, and assigns one or more agricultural engineers to the cooperative council.6 Market reforms have removed the cooperatives' former monopoly over the provision of most inputs and the marketing of major crops. However, the cooperatives continue to provide machinery services to farmers and remain the channel through which subsidized inputs are sold, giving them a substantial advantage over private traders. The cooperatives also implement, under the direction of the agricultural engineer, the ministry's pest management program for cotton. Although liberalization has returned control over key elements of cotton production to farmers, it has also removed certain incentives for production and thereby accelerated the erosion of Egypt's share of the world market for long-staple and extra long-staple cotton. There are several commonly-cited reasons for that decline. Advances in technology have allowed textile mills to produce fabric of nearly comparable quality from U.S. pima cotton, which in 1989 cost less than half of what the Egyptian government was charging for certain varieties.7 To boost the competitiveness of Egyptian cotton, the government in 1999 reduced the export prices of its cotton varieties by as much as thirty-two percent.8 And in an effort to avoid the massive losses incurred in 1997, when the amount paid to farmers exceeded the international market price, it began tying purchase prices to export prices. The procurement price of certain varieties fell dramatically-in the case of Giza 45, an extra-long staple variety, from E£781 (US$211.65) per 100 pounds in 1998 to E£532 (US$144.17) in 1999.9 The withdrawal of floor prices, coupled with the rising cost of inputs and land rents, has led many farmers-particularly tenants-to conclude that cotton is either unprofitable or even loss-incurring.10 As farmers have turned to other cash crops, the amount of land allocated to cotton has declined from 923,208 acres in 1997 to 520,000 acres in 2000.11 2 World-trade in long staple and extra-long staple cotton during the 1999-2000 season stood at about one million bales, of which Egyptian exports accounted for an estimated 370,000. Terry Townsend, Executive Director, International Cotton Advisory Committee, "World Extra-Fine Cotton Outlook," paper presented to the Fourth U.S. Pima Industry Seminar, February 24-25, 2000, San Diego, California, <http://www.icac.org/icac/cottoninfo/speeches/speeches.html> (19 January 2001), p. 3. 3 Ben Faulks, "Just a cotton pickin' minute, thar: Egypt's cotton industry has great potential but is held back by state interference," Cairo Times, May 1, 1997, vol. 1, no. 5. 4 Study conducted for the Government of Egypt, 1997, on file at Human Rights Watch. 5 The 1952 reform curtailed the size of landholdings, fixed land rents according to the amount of land tax paid, and prohibited the eviction of tenants. Farmers who benefited from the redistribution of land were required to form cooperatives that would organize cultivation, provide credit and other inputs, and market produce. By the mid-1960s, that system had been extended throughout the countryside and membership was made mandatory for all farmers with reasonable access to a cooperative. Samir Radwan and Eddy Lee, Agrarian Change in Egypt: An Anatomy of Rural Poverty (London: Croom Helm, 1986), pp. 9-10. See also United Nations Food and Agriculture Organization Investment Center (FAO/IC), "Egypt: Socio-Economic and Production Systems (Sohag Governorate)," FAO/IC, 1995, <http://www.fao.org/gender/static/tci/egypt.htm> (19 January 2001). 6 Ibid. 7 Kim Murphy, "White Gold turns to dross in government hands: Egypt's legendary cotton industry has fallen on hard times," Los Angeles Times, January 28, 1992. 8 U.S. Department of Agriculture Foreign Agricultural Service, Global Agriculture Information Network (GAIN) Report No. EG9032, "Egypt: Cotton Outlook 1999," September 23, 1999, p. 1. 9 Ibid., p. 2. 10 Human Rights Watch interviews with farmers in El Samra, October 25, 1999. 11 U.S. Department of Agriculture, "Egypt: Cotton Outlook 1999," p. 2; Human Rights Watch interview with a development
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