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The Traveling T-Shirt

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Submitted By luqstar
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VALUE CHAIN: U.S. Cotton

End
Consumer

Retailers
Inbound logistics
(Import)

Farmers
&
Laborers

Manufacture

Outbound logistics (export)

Over the last fifty years, the U.S. cotton industry has seen a great reduction in labor force, a significant feat in agriculture R&D and engineering, and the remarkable ability of farmers to unite and take ownership of cotton production. American cotton farmer’s ability to dominate is due to the combination of ingenuity, mechanization, agriculture research and command of the value chain. One must also not forget to factor in America’s history of free and cheap labor though slavery and sharecropping which gave the American cotton farmer a huge head start over foreign competition.

Today, The U.S. government plays a major role in the farming industry. American cotton farmers have a large competitive advantage over their foreign counterpart due to government subsidies. Government subsidies guarantee US farmers a minimum of 72.24 cent per pound of cotton. This is almost double that of the global market for cotton, which in 2004, was at 38 cents per pound. The government also requires America based clothing factories to purchase a certain percent of their cotton from American farmers. In addition to subsidies, there are programs that ensure farmers against weather losses, specialized loans, and grants to help to farmers develop new technologies, all to ease the minds of farmers so they “don’t lose too much sleep”. In 2004, government support to farmers was about three times what The Agency for International Development requested at $4 billion dollars. So what would happen if all the Auggie Tantillo and his troops (aka dinosaurs or protectionists) were to go extinct, and in with Julia Hughes? In other words, in the absence of distortions from government regulation, what would happen? What would a

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