Jyothi Ramulla Naga is 4 feet tall. From sunup to sundown she is hunched over in the fields of a cottonseed farm in southern India, earning 20 cents an hour. Farmers in the Uyyalawada region process high-tech cottonseeds genetically engineered to contain a natural pesticide, on behalf of US agriculture giant Monsanto.

To get the seeds to breed true the farmers have to cross-pollinate the plants, a laborious task that keeps a peak of a dozen workers busy for several months on just one acre. And to make a profit the farmers have to use cheap labour. That means using kids like Jyothi, who says she's 15 but looks no older than 12. (Monsanto points to papers indicating she is 15.) To harvest the bolls three months later, the farmers use cheap labour again, not the machinery that is used to pick cotton in the US.

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At the edge of where Jyothi is working, a rusting sign proclaims, "Monsanto India [Get Quote] Limited Child Labour Free Fields." Jyothi says she has been working in these fields for the past five years, since her father, a cotton farmer, committed suicide after incurring huge debts.

On a recent December morning there were teens picking cotton in nearly all of a half-dozen Monsanto farms in Uyyalawada, 250 miles south of India's high-tech hub Hyderabad. Last year 420,000 laborers under the age of 18 were employed in cottonseed farms in four states across India, estimates Glocal Research, a consultancy in Hyderabad that monitors agricultural labour conditions. Of that total 54 per cent were under the age of 14 and illegally employed.

The law prohibits children under 14 from working in factories, slaughterhouses or other dangerous locations. There are some exceptions for farmwork--if the hours are limited, the kids are in school and there are no machines to be operated. But children like Jyothi put in ten-hour days in the field and miss school. Teenagers 14 to 18 years old can work during the day in factories but no more than 36 hours a week. Employer penalties include fines and imprisonment. But enforcement of the law is lax.

Even as India gallops toward First World status--with its booming economy, roaring stock market and rapid progress in autos and steel--it is still a giant back-yard sweatshop to the world, staffed by underage boys and girls. The government itself, in its most recent account (from a 2001 census), estimates that 12.6 million children under the age of 14 are at work in India. NGOs that make a career of exposing excesses put the number much higher--50 million.

Child labour is as old as the earliest settlements in the Indus Valley thousands of years ago. It is, for that matter, not unknown in the US. As recently as 2001 Nebraska's legislature was debating whether to outlaw the use of 12- and 13-year-olds in seed corn fields, where youngsters of this age accounted for 25 per cent or more of detasseling labor. (This job is like Jyothi's, except that in hybrid seed corn production the game is to prevent self-pollination.) The difference is that the teenagers in the Midwest get $7 an hour so they can spend it at the mall. Their Indian counterparts are getting 20 cents an hour to buy food.

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Every time you buy an imported handmade carpet, an embroidered pair of jeans, a beaded purse, a decorated box or a soccer ball there's a good chance you're acquiring something fashioned by a child. Such goods are available in places like GapKids, Macy's, ABC Carpet & Home, Ikea, Lowe's and Home Depot.

These retailers say they are aware of child-labour problems, have strict policies against selling products made by underage kids and abide by the laws of the countries from which they import. But there are many links in a supply chain, and even a well-intentioned importer can't police them all.

"There are many, many household items that are produced with forced labour and not just child labour," says Bama Athreya, executive director of the International Labor Rights Forum in Washington, D.C. It's a fact of a global economy, and will continue to be, as long as Americans (and Europeans) demand cheap goods--and incomes in emerging economies remain low. If a child is enslaved, it's because his parents are desperately poor.

The UN International Labor Organization guesses that there are 218 million child laborers worldwide, 7 in 10 of them in agriculture, followed by service businesses (22 per cent) and industry (9 per cent). Asia-Pacific claims the greatest share of underage workers (122 million), then sub-Saharan Africa (49 million).

Noteworthy offenders: Cambodia, Mali, Burkina Faso, Bolivia and Guatemala. A decade ago India ratified the UN convention on children's rights but refused to sign one key clause that set the standard for child labor--14 and under. "This already waters down their obligations under international law, which of course remains a voluntary matter," says Coen Kompier at the ILO's New Delhi bureau.

Cottonseed farmer Talari Babu is a slim, wiry man dressed, when a reporter visited him, in black for a Hindu fast. "Children have small fingers, and so they can remove the buds very quickly," he says, while insisting that he no longer employs the underage.

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"They worked fast, much faster than the adults, and put in longer hours and didn't demand long breaks. Plus, I could shout at them and beat or threaten them if need be to get more work out of them." He could also tempt them with candy and cookies and movies at night. Babu says that pressure from Monsanto and the MV Foundation, an NGO in Andhra Pradesh backed by the Dutch nonprofit Hivos, forced him to quit using child labour.

But minutes after a visitor arrives at his field, he receives a call on his cell phone asking him if a raid was being carried out on his farm. In 2006, he says, Monsanto paid him a $360 bonus for not using child laborers. The bonus, though, doesn't make up for the higher wages that adults command. Says Babu: "Had I used children, I would've earned more."

Monsanto's competitors, the Swiss Syngenta and the German Bayer, also contract with farmers in India to produce seed. For all three the arrangement is like the one that governs chicken production in the US, with a giant corporation supplying inputs to a small farmer and then picking up the output at harvest time.

A typical Monsanto farmer owns only 1 to 4 acres of intensely cultivated cotton plants and keeps up to a dozen workers busy for the better part of a year tending to the plot. Often the farmer is from a higher caste (Brahmin), the labourers from a landless lower caste (Dalit). The pay, typically $38 to $76 a month, goes directly to the parents of the workers.

Sometimes the farmer pays for the labor in advance, or offers a loan, charging the parents interest of 1.5% to 2% a month. There may be deductions from the pay envelope for food. Boarding for migrant laborers is usually free--often a spot on the farmer's veranda or in a shed with fertilizers or on a rooftop, next to the drying cotton.

The season starts with the sowing of seed, staggered over a three-month period that begins in April. Two months after a row is planted the bushes are in bloom and the real work begins. Pollen from male plants must be dusted by hand onto the flowers of female plants. The pollination work lasts for 70 to 100 days and is followed by cotton-picking staggered over several months. Children's hands are ideal for the delicate work with stamens and pistils. Their bodies are no better at withstanding the poisons.

At least once a week, says Davuluri Venkateshwarlu, head of Glocal, farmers spray the fields with pesticides like Nuvacron, banned by the US Environmental Protection Agency, and endosulfan, methomyl and Metasystox, considered by the EPA to be highly toxic. Venkateshwarlu ticks off the effects of overexposure: diarrhea, nausea, difficulty in breathing, convulsions, headaches and depression.

The farmers buy the starter seed from Monsanto at a cost that comes to the equivalent of $30 an acre. That acre will produce something like 900 pounds of cottonseed, to be sold back to Monsanto at $3.80 a pound, or $3,400 an acre. The cotton fiber is sold separately by a middleman.

In a magnanimous gesture that accomplished nothing, the Indian government cracked down on the seed companies by putting a ceiling on the cost of the starter seed (it used to be $64 an acre) but did nothing to change the price paid for the product seed, left to the seed companies. The product price has remained essentially flat in rupee terms over the past six years, despite 4.7 per cent average annual inflation in India.

Farmers say their cost squeeze forces them to use child labour. "That allegation is not true," says Monsanto spokesperson Lee Quarles. "Indian cottonseed producers actually realise almost seven times the financial benefits growing cottonseed for local seed companies than if they were to sell that same yield at farm gate prices"--using their land, that is, primarily to produce cotton rather than seed.

In the neighboring states of Karnataka, Maharashtra and Gujarat, you find children producing genetically modified seeds for such vegetables as okra, tomatoes, chilies and eggplant, in the service of Syngenta, says Venkateshwarlu. The tomato and chili flowers are even smaller and more delicate than the cotton buds. The pesticides are more frequently applied, Venkateshwarlu says, and the pay is less, 5 to 10 cents an hour, even though the mandated minimum wage is 17 cents.

Not so, Syngenta insists. "Our contracts require payment of minimum wage," says Anne Burt, a spokesperson, adding that Syngenta has a strict policy against child labour. The seeds are sold to US farmers, the tomatoes and eggplant to US consumers.

Monsanto, Syngenta and Bayer, all working under the glare of labour monitors like Glocal, are grappling with ways to prevent the abuse of children. They have, in fact, a symbiotic relationship with these outside groups, sometimes paying them to keep watch over the fields or scold parents into sending their children to school.

Monsanto says if it finds a farmer employing children, it cans him. But in interviews farmers say that happens only after a third offense. "The problem," says Mohammad Raheemuddin of the MV Foundation in Hyderabad, "is that too few people have been assigned to monitor a vast area."

"One reason [monitoring groups] are so important in India is because the government has been an utter failure in implementing the law," says Zama Coursen-Neff, deputy director at Human Rights Watch in New York City. "But in any situation where there's funding available there is room for corruption and abuse".

At the very least, the watchdogs have learned to exploit the media. Sometimes they tip off journalists before persuading the police to raid a sweatshop. In October 2007 the New Delhi group Global March Against Child Labor informed the Observer, the British daily, that 14 kids, some as young as 10, were spending 16 hours a day at a subcontractor embroidering blouses for GapKids.

Gap, which has placed that vendor on probation and cut its orders, recently met with suppliers to underscore its zero-tolerance policy and created a $200,000 grant to improve workshop conditions.

The labour organisations can't agree on how to ameliorate the situation. Some say that children of poor families have to work in order to make ends meet and that the government should offer them night classes to prepare them for better jobs.

Others want to end child labour by finding jobs for parents, thereby eliminating the necessity for kids to work. "There is obviously a demand for labor," says labor economist Ashok Khandelwal, who works with unions. "But if a child is working that (usually) means the parents aren't."

Seven-year-old Santosh hadn't been in her new job a week yet in Dabbi, in the western desert state of Rajasthan, when a reporter visited. Chiseling quarry waste into blocks, she hurt her thumb and several fingers while figuring out how to hold a piece of sandstone in place with her foot in order to shape it to the desired size. India is the third-largest exporter of decorative stone--marble, granite, slate, sandstone--after Italy and China, with $1.2 billion in export revenue in fiscal 2006. Her work will likely end up in the garden and patio shops of American retail chains.

"We mandate an age of 16 or older," says Karen Cobb, speaking for Lowe's. "Our inspections cover quarries and have found that our vendors are in compliance with our standards."

Laborers get paid by the cobble--a penny for a piece of 8 square inches, 7 cents for one of 66 square inches. Children are ideal because of their flexible hands and gentle pressure on the chisel and the hammer, says Rana Sengupta with the Mine Labor Protection Campaign (Trust) in Rajasthan. Hammer bruises are as common as cuts from flying pieces of the stone or slices from the chisel. So, too, says Sengupta, is silicosis, tuberculosis and bronchitis from inhaling dust particles.

Leela, 10, has been at this work for two years now. In a nine-hour workday she can turn out 50 pieces and earn $1.26. She takes two days off a month. At another Rajasthan quarry, 15-year-old Raju has spent his adolescence among the piles of sandstone waste. He dropped out of school four years ago to make cobbles. He's become something of a veteran. "I used to get hit by these broken pieces in my shins all the time," Raju says. "But with practice I finally got it right." Occasionally a piece of the chisel breaks and flies off like shrapnel. Raju points to a worker who has such a wound, just under his ribs. "It doesn't hurt," he assures.

Further north, in the state of Uttar Pradesh, hand-knotted carpets are made and sent to showrooms in the US. You'll find such goods, says Washington D.C. NGO Rugmark, at Bloomingdale's, ABC Carpet & Home and Ikea. The chains insist they do not tolerate child labour.

In Mirzapur most looms are inside people's homes or in communal sheds. Workers live and sleep in the same low-slung sheds, stepping down into 3-foot-deep trenches dug into the earthen floors to house the looms. Two or three people sit at a loom. The pits get damp, especially during the monsoons, and after the daylight fades, weavers must rely on a single naked lightbulb.

For the past year 14-year-old Rakil Momeen has been working at a loom in a shack in Mirzapur. A fourth-grade dropout, he left his parents in West Bengal and trekked halfway across the country. In his new life he works from 6 a.m. to 11p.m. and earns $25 a month.

After every knot the threads must be cut precisely with a sharp, curved blade. Rakil complains, not about nicks in fingers, but about homesickness. His face lights up as he remembers his childhood in the Malda district. "I used to hang out with my friends and my parents all the time," he says. "I really miss that." A cricket fan, he keeps his worn-out cricket bat next to him at the loom; occasionally he gets to play a game on Sundays.

India is full of painful incongruities. In the capital, on Asaf Ali Road, just across from the Delhi Stock Exchange and behind a wall of tiny storefronts, is a maze of alleyways 2 feet wide, with exposed rooms on both sides. In some places rickety metal ladders go three floors high to the rooftop.

Crammed into rooms no bigger than a king-size bed, six to eight young boys, some as young as 5 years old, are hard at work. They're decorating photo frames, diaries, shoe heels and such with sequins and pieces of glass. You can find similar items at stores like Pier 1 and Target, says Athreya of Labor Rights Forum. The companies insist that their vendors not employ underage children.

In one such room, where the only piece of furniture is a low workbench, 10-year-old Akbar sits on the floor and mixes two powders into a doughy adhesive, his fingers blackened by the chemicals. Another boy spreads a thin layer of the mixture on a photo frame and a third, seated on his haunches, starts pasting tiny pieces of mirrors and sequins along the border.

He sways back and forth, a habit most kids have developed to keep the blood flowing through their limbs as they sit for several hours. Decorating one 5-by-5-inch frame consumes six child-hours. The boys, who all live in the room and cook their own food here, typically work from 9 a.m. to 1 a.m. for $76 a month. Many have teeth stained from cigarettes they smoke and tobacco they chew to relieve the tedium.

Sometime within the next few months Gap intends to convene a global forum to consider "industrywide solutions" to child labour. Good luck. Since October Gap has cut in half its orders from a contractor in New Delhi it claims had subcontracted embroidery work out to an unofficial vendor without the company's knowledge.

But in the wake of the bust, middlemen have found new ways to duck responsibility by removing labels that identify the origin of apparel. Says Bhuwan Ribhu, whose organisation, Bachpan Bacho Andolan, helped bust the contractor, "Now it's even harder to trace who the shipment is for and to hold the companies accountable."