WORLD TRADE  
ORGANIZATION  WT/L/587 
17 November 2004 
 
 (04-4942) 
  
   
WTO AFRICAN REGIONAL WORKSHOP ON COTTON 
 
COTONOU, REPUBLIC OF BENIN 
 
23-24 MARCH 2004 
  
Note by the Secretariat
 
 
 
 
 
 
 
 
  
TABLE OF CONTENTS
 
  
Page
 
 
I. FOREWORD BY DR. SUPACHAI PANITCHPAKDI, WTO DIRECTOR-
GENERAL........................................................................................................................ .........3  
II. SUMMARY REPORT OF TH E WORKING SESSIONS....................................................4  
III. OUTCOMES - SUMMARY CONCLUSIONS ....................................................................18  
IV. PROGRAMME...................................................................................................................... .22 
V. ANNEXED PRESENTATIONS ............................................................................................27  
 
ANNEX 1   - OPENING REMARKS BY DR. SUPACHAI PANICHTPAKDI,            WTO DIRECTOR-GENERAL .................................................................................. 27  ANNEX 2   - OPENING ADDRESS BY H.E. MR. FATIOU AKPLOGAN, MINISTER OF             INDUSTRY, TRADE AND EMPLOYMENT PROMOTION ............................... 30 
 
ANNEX 3   - STATEMENT BY THE CANADI AN DELEGATION ........... ...................... .......... 33 
 ANNEX 4   - STATEMENT BY THE EC DELEGATION ...................... ...................... ............... 35 
 
ANNEX 5   - STATEMENT BY THE JAP ANESE DELEGATION ............................. ............... 38 
 ANNEX 6   - STATEMENT BY THE US D ELEGATION ............................ ...................... .......... 40 
 This document has been prepa red under the Secretariat's own 
responsibility and without prejudice to the positions of Members and to their rights and obligations under the WTO WT/L/587 
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TABLE OF CONTENTS
 (cont'd.) 
 
 
Page  
 
ANNEX 7   - STATEMENT BY THE US D ELEGATION ............................ ...................... .......... 42 
 
ANNEX 8   - STATEMENT BY THE CHINES E DELEGATION ............... ...................... .......... 45 
 ANNEX 9   - FOOD AND AGRICULTURE ORGANIZATION OF THE UN ........................... 47 
 ANNEX 10 – FOOD AND AGRICULTURE ORG ANIZATION OF THE UN .......................... 74 
 
ANNEX 11 - INTERNATIONAL COTTON ADVI SORY COMMITTEE ......... ........................ 77 
 ANNEX 12 - INTERNATIONAL MONETARY FUND .................................. ...................... ........ 90 
 ANNEX 13 - INTERNATIONAL TRADE CENTRE  UNCTAD/WTO ....... ...................... .......... 96 
 
ANNEX 14 - SAHEL AND WEST AFRICA CL UB / OECD ................. ...................... ............... 103 
 ANNEX 15 - UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION ...... 124 
 ANNEX 16 - WORLD BANK .................................. .............................. ...................... .................. 129 
 
VI. LIST OF PARTICIPANTS ............................................................................................... 166    
 
    
 
     
 
     WT/L/587 
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I. FOREWORD BY DR. SUPACHAI PANITCHPAKDI, WTO DIRECTOR-GENERAL 
 As requested, I am pleased to circulate and make available this compilation comprising 
succinct summaries of the sessions and the presenta tions at the WTO African Regional Workshop on 
Cotton, which was held in Cotonou, Republic of Benin, from 23 to 24 March 2004.  I would like to 
pay tribute to the 18 multilateral institutions, Cana da, the European Communities, Japan, the United 
States, China, and the participating African countri es, which participated constructively to ensure a 
meaningful and positive outcome.  The compilati on also contains, as you will note, the "Summary 
Conclusions", noted by the Workshop.     In the preparatory process for the Fifth WT O Ministerial Conference in Cancun (Mexico), 
Benin, Burkina Faso, Chad and Mali, with broa d support, presented an Initiative on cotton.  WTO 
Members engaged intensively on the Initiative.  Cons ultations continued after the Cancun Ministerial.  
The intensity of the consultations  and the constructive engagement by all WTO Members, resulted in 
an enhanced understanding of the critical importance of the cotton sector, for the four proponent countries, and also for other African countries,  as a share of economic activities, linked to 
macroeconomic performance and, in some cases, to their poverty-reduction programmes.  It was 
evident from the many consultations on the subject, that Members found it useful to view the 
Initiative in terms of two components:  the Trade Aspects (a subject for the broader agriculture 
negotiations);  and the Development Assistance Aspects.  WTO Members considered that the 
Secretariat had a role in facilitating a "gathering of the trade and development communities" to consider the Development Assistance Aspects of the Initiative, although it was acknowledged that the 
Organization was limited by resource and competence on what it could deliver on the latter.  With the co-operation and the understanding of the proponent  countries, the World Bank and the IMF, the 
Secretariat organized the Workshop.  The results of the Workshop, as many of you who participated 
already know, were concrete and positive.  Essen tially, it was an extraordinary gathering of the 
development and trade communities to tackle a sp ecific problem.  Eighteen multilateral institutions 
were involved (spanning the spectrum of trade and development);  and, toge ther with Canada, the 
European Communities, Japan, the United States an d China, African countries  interacted intensively 
and most constructively with a problem-solving or ientation.  The Workshop outcomes justified the 
resources and the time invested.  The Workshop dem onstrated to me the potentially huge dividends 
that could accrue from enhanced coordination a nd coherence between the trade and development 
communities.  This is a priority that I have pur sued as Director-General and I hope that the two 
communities can deepen and expand on this co-ope ration into other areas requiring our support and 
attention.   
  Finally, in addition to post-Workshop contact s by my staff, I am urging follow-up on an 
accelerated basis, as agreed with our partners fro m the World Bank, the African Development Bank, 
the ICAC, the FAO, bilateral donors, including the United States and the European Commission, and a representative of the African cotton produc ing countries.  Even as WTO Members remain 
preoccupied and continue to deal with the trade as pects within the broader agriculture negotiations, I 
intend to remain personally engage d with this subject in consultation with agencies and governments. WT/L/587 
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II. SUMMARY REPORT OF THE WORKING SESSIONS  
 
A. OPENING
 SESSION 
MODERATOR : Chiedu Osakwe, Director, Textiles Division, WTO  
 1. WTO Director-General Dr. Supachai Panitchpakdi made a statement to open the Workshop.
1  
Dr. Supachai stressed the importance of the Sector al Initiative on Cotton not only for the 4 proponent 
countries of Benin, Burkina Faso, Chad and Mali, but also for the 26 other African countries that 
produce and trade cotton and for whom cotton was a vital mainstay of their national economic activities.  Action on cotton was central to the gr owth and poverty-reduction efforts of low-income 
African countries.  The Workshop was an Initiative of the WTO Secretariat.  It had been convened as 
a unique gathering of the trade and developmen t communities, bringing together 18 multilateral 
institutions, Canada, China, the European Communities, Japan and the United States, and the 30 
African countries for whom cotton was a central part  of their economic activity and poverty-reduction 
efforts.  In pointing to the 6 objectives of the Wo rkshop, Dr. Supachai emphasised that the Workshop 
was exclusively focused on the Development Assistan ce Aspects of the Sectoral Initiative on Cotton.   
2. H.E. Mr. Fatiou Akplogan, Minister of Industr y, Trade and Employment Promotion, made a 
statement on behalf of Benin (the host country) and on behalf of the cotton proponent countries.
2  (In 
attendance at the Opening Session was Benin Minister  for Foreign Affairs and African Integration, 
H.E. Mr. Rogatien Biaou).  Minister Akplogan we lcomed the timely hosting of the Workshop after 
the Cancún Ministerial Conference.  The proponent  countries and Africa attached importance to the 
survival of the cotton sector in a trading system in  which Africa was at a disadvantage.  Minister 
Akplogan underlined the importance of the major ro le that cotton plays in the economies of African 
cotton-producing countries.  The Minister was criti cal of trade-distorting subsidies by certain WTO 
developed country Members which had seriously jeopardized the competitiveness of cotton and the 
structure of the economies of the cotton-producing c ountries.  He called for urgent action to address 
the trade-distorting measures in the international cotton market and for international support on the 
development aspects such as with local processing.  The proponents and supporters of the Sectoral 
Initiative on Cotton considered that the Initiative "rep resented an extraordinary opportunity to give 
concrete expression to the notion of a Devel opment Round associated with the Doha Work 
Programme".   
B. SESSION  I:  FACTORS  IN AFRICAN  COTTON  PRODUCTION  AND  TRADE   
CHAIRMAN : Uri Dadush, Director, Trade Department, World Bank  
 
3. The Session focused on:  
• Core presentation detailing facts on cotton pr oduction, consumption and trade trends in 
the 30 African countries, in the past and future prospects.   
• Factors affecting quality, efficiency and productivity in upstream and downstream 
production, such as infrastructure, transpor tation, marketing, risk management tools, 
farm credit/grants, producer associations, etc.   
• Data on and facts affecting intra and extra- African cotton trade.  Objective factors in 
inter-play in cotton price trends such as competing substitutes, the state of the global 
economy and government intervention, as they  related to the performance of African 
countries.   
                                                      
1 See Annex 1.   
2 See Annex 2.    WT/L/587 
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• Discussion by multilateral institutions and bilateral donors on approaches and issues for 
the preparation for cotton-sector diagnostic studi es (where they do not exist) in support 
of cotton programmes in Africa.   
 
4. Mr. Dadush introduced Session I; the objective of which was to establish the facts on the 
basis of which the solution-oriented dialogue be tween representatives of the trade and development 
communities, at the subsequent sessions, would be  based.  Mr. Dadush observed that the Cotton 
Initiative raised the central issue of "coherence be tween the trade and the development communities", 
which needed to be addressed for meaningful solutions to emerge.   
5. Invited background presentations were made by FAO (Mr. Shangnan Shui)
3, the International 
Monetary Fund (Mr. Cyrille Briançon)4, ICAC (Mr. Carlos Valderrama)5, African Development Bank 
(Mr. Chuku-Dinka Spencer), OECD/SWAC (Mr. Karim Hussein)6 and the World Bank 
(Mr. John Baffes).7   
6. World Bank8 presentation focused on the critical importance of cotton for Benin, Burkina 
Faso, Chad and Mali, stating that cotton was of mo re importance to the poor than to the rich.  The 
presentation also elaborated on the structure of the cotton industry, price trends and policies in the 
international cotton market.  Presentation of the facts showed, inter alia , that cotton was declining as a 
share of total fibre consumption and polyester prices,  long-term average cotton prices were in decline, 
with continued cotton price variability.  While there were no real trade barriers (such as with tariffs 
and quotas), there was considerable domestic suppor t in the US, EC and China.  Taxation policy 
issues that needed to be addressed existed in Cent ral Asia and amongst African producers.  Overall, 
the issues to be addressed included supply-side is sues (improving efficiency, introduction of new 
technology, introducing new grain seeds, etc.), dema nd-side issues, and policy issues.  Therefore, the 
issues pertaining to cotton needed to be addressed at several levels.   
7. FAO9 presentation addressed strategies to enhance cotton contribution to the economy and 
food security in Africa.  The sector's contribution to economic activity was vital.  It pointed to the increased rapid expansion of cotton production in West Africa in the last 50 years.  The share of 
cotton output value in GDP was si gnificant in several of the proponent countries.  Cotton was also a 
key source of agricultural revenue.  FAO analysis  showed particular challenges for proponent 
countries such as slow growth in yields; minimal participation in world exports of textiles and 
clothing trade; and, long-term decline in world cotton prices.  FAO suggested that the focus of 
strategies should be targeted for the benefit and development of farmers.  Suggestions included 
increased income for farmers; increased producti on efficiency; increased marketing efficiency; 
assistance to enhance competitiveness of textile and cl othing markets; and, diversification of export 
revenue base.   
8. OECD/SWAC
10 re-iterated the vital importance of cotton in Africa, critical for economic 
mainstay, household income and poverty-reduction in Africa.  In its wide-rang ing consultations with 
civil society and inter-governmental actors, solutions  pointed to included diversification, stabilizing 
commodity price volatility, coherence between trad e and development policies, further domestic 
reforms and ensuring companion policies were in place, increasing regional demand and processing.  
The WTO Workshop was welcome and useful and incr eased transparency in the multilateral trading 
system.   
                                                      
3 See Annexes 9 and 10.   
4 See Annex 12.   
5 See Annex 13.   
6 See Annex 14.   
7 See Annex 16.   
8 Mr. John Baffes. 
9 Mr. S. Shui. 
10 Mr. Karim Hussain. WT/L/587 
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  9. ICAC
11 reviewed basic features of current cotton production and trade.  Cotton is an 
important industrial input.  Largest cotton producers are the US, China, India, Pakistan, Brazil and 
Uzbekistan.  China was currently driving global co tton demand consumption.  The US is the largest 
retail market in the world, consuming about 3 milli on tons of cotton globally.  Average cotton prices 
were in long-term decline.  This long-term declin e was expected to continue with several complex 
factors at play such as subsidies, new technologi es and larger hectarage dedicated to cotton for 
increased yields.   
10. African Development Bank (AfDB) reviewed, inter alia , Africa-specific factors affecting 
African cotton farmers.  It identified the impact of  HIV/AIDs pandemic, factors internal to individual 
countries such as the structure and organization of the industry and farmers associations, and 
marketing challenges.  These structural issues point ed to areas where the C ontinent's producers of 
cotton could achieve further efficiency gains.  F actors exogenous to the Continent also existed and 
this had been addressed in previous presentations .  The AfDB pointed to solutions that would 
encompass increased participation of the beneficiar ies, strengthening producer organizations, need to 
support increased mill consumption in the produc ing countries, and support for downstream 
processing.   
11. The International Monetary Fund acknowledging th e usefulness of several key points already 
made, highlighted 4 crucial points namely, the necessity for coherence between trade and 
development policies; essential need for African countries to develop expertise in commodity risk 
management to mitigate the incidence of price fl uctuations; ensuring macroeconomic stability that 
will engender higher growth rates; and, for countr ies to pursue trade and development policies in 
areas where they have a compar ative advantage (such as the Afri can countries have in the cotton 
sector).   
12. Several participants joined in the discussions .  China, EC, Malawi, Burkina Faso, Ethiopia, 
Zimbabwe, Angola, US, Mauritius and Côte d'Ivoire actively intervened to comment, differ, provide 
clarifications, stress particular viewpoi nts and issues, and take positions.   
13. China questioned the accuracy of World Bank figures on domestic support for cotton 
production in China.  China took the position that  the statistics on domestic support were inaccurate 
and misleading.  The World Bank stated its sources.  China maintained its position.   
14. The EU underscored the value of an "integrated solution" in light of the complex factors at 
different levels that had been put forward in the co re presentations.  Integrated  solutions would seek to 
improve productive efficiency; reduce costs; and, prot ect farmers from price fluctuations with the use 
of market-based instruments.  In this regard, the EU will use a mix of instruments in contributing to 
solutions for African farmers.  These would include the Economic Partnership Agreements (EPAs), 
the Everything But Arms (EBA) Initiative and, transi tion measures.  The structural aspects (trade) of 
the challenges faced by African cotton proponent countries could only be dealt with within the 
framework of the broader agricultural negotiations at the WTO.  The EU considered that the G-20 
countries had a role to play by improving market ac cess.  The aim of the EU was to eliminate trade-
distorting subsidies and remedy internal support by up to 60%.  The EU set the time-frame of 2010 to 
review its aims and what had been implemented.  The EU would seek to integrate the EBA within the 
EPAs and offer trade assistance.   
15. A range of views and points were made.  Ma lawi underscored the vital importance of the 
urgency for coherence in trade and development policies, noting that the Workshop, which was a 
gathering of the trade and the development communities,  should provide impetus to this coherence.  It 
pointed to the challenges for African cotton produc ers posed by the "problematic" liberalization of 
marketing boards.  It also pointed to the di sincentive for domestic producers to venture into 
downstream processing because of the incidence of imported second-hand (used) clothing.   
                                                      
11 Mr. Carlos Valderrama.  WT/L/587 
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  16. Burkina Faso established the link between cott on production and improve d cereal production, 
increase in household incomes with positive results for "food security" and "poverty-reduction".  
Burkina Faso acknowledged the critical importance of asso ciated efficient policies.  In light of its own 
experiences, amongst others, it underlined the usef ulness of support measures and assistance in the 
areas of conservation, better management, "green-b ox-type" measures in order to further support the 
cotton sector, vital for poverty-reduction in the proponent countries.   
17. Tanzania was concerned that the core presentati ons had exclusively focused on West Africa, 
ignoring East Africa, which faced similar probl ems.  Tanzania acknowledged the far-reaching and 
successful domestic reform efforts in the cotton sector  in West Africa, particularly in the proponent 
countries.  Tanzania formally requested for the di ssemination of the presentations and results of the 
Workshop.   
18. Zimbabwe and Ethiopia emphasised the supe rvening importance of addressing the trade-
distorting subsidies with harmful developmenta l effects.  The Economic Commission for Africa 
(ECA) took the same position.  Angola requested appr opriate attention in the sector to "war-torn 
countries".  Cotton sectoral support would assi st post-conflict recovery effects.   
19. The US acknowledged the value of the core presentations and on-going dialogue, which 
showed a complex intersection of trade and produc tion factors, domestic and external factors, the 
impact of synthetic fibres on consumption and use of natural fibres, and diseases such as HIV/AIDs.  
The US acknowledged the importance of the trade issu es, which were being addressed in Geneva.  As 
defined by the WTO Secretariat, the focus at th e 2-day Workshop was on the development aspects.  
The US was keen to know and have a better appreciation of the needs and priorities on the 
development aspects from the cotton proponent countries.  It underscored the value and the key role that the Integrated Framework for Trade-Related Technical Assistance to LDCs (IF) could play in 
responding to the development aspec ts of the Cotton Initiative.   
20. Mauritius pointed to problems and challenge s with improving marketing efficiency; 
increasing yields, and improving quality.  At the same time, it re-iterated with others the necessity to 
remedy and correct trade distortions.   
21. Côte d'Ivoire expressed concern with fact ors impeding production in several African 
countries.  It emphasised the importance that Africa n countries attached to a meaningful outcome and 
follow-up from the Workshop.   
22. Mr. Dadush offered concluding summary rema rks.  Participants acknowledged the high 
quality of the core presentations.  There was conve rgence that West African cotton producers were 
competitive and that production costs were about one third ( ⅓) less, but returns to labour were low.  
There was scope, therefore, for improved productivity.   There was agreement that the quality of West 
African cotton was very good and competitive.  More could be done to ensure that farmers receive a 
larger share of the benefits.  There was scope for in creased benefits.  Returns to farmers lay in greater 
liberalization and achieving greater efficiency, reduc tion of the influence of marketing boards, deeper 
domestic reform at the country level, and the elimin ation of trade barriers and market distortions.   
 
 
 
    
 WT/L/587 
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C. 
SESSION II : COTTON -SPECIFIC TYPES AND SCOPE FOR FINANCIAL AND TECHNICAL 
ASSISTANCE  
CHAIRMAN : Chuku-Dinka Spencer, Director, African Development Bank 
 
23. Session II focused on:  
• Presentations by selected African countries on  the forms of financial and technical 
assistance envisaged to support domestic  efforts and programmes in individual 
countries.   
• Forms and types of cotton-specific financ ial and technical assistance included 
production infrastructure; improved competit iveness and quality control; strengthening 
producer organizations; improved cotton quality through support for improved 
standards; enhanced cotton s upport services by strengtheni ng financial services; market 
support services through export promotion;  and, support for value-added cotton 
through support for "down-stream" produc ts in apparels and garments.  Also 
considered was  commodity price-risk manage ment through market-based instruments.   
 
24. Mr. Chuku-Dinka Spencer introduced Session II.  He noted that the sector was complex with 
variations.  The objective of Session II was for fo cused presentations from countries to identify their 
areas of need.  Such presentations would enable  bilateral donors and multila teral institutions to 
determine areas of assistance.  Mr. Spencer reviewed  some of the areas that had been mentioned for 
cotton-specific financial and technical assistance.  Diagnostic studies set the foundation.  The re-
organization of cotton producer organizations had been mentione d.  Improved competitiveness was 
another.  Training was critical.  Production yiel ds and quality mattered.  Seed research, quality 
research and the marketing of cotton seed counted.  Financial and technical assistance would be 
necessary.  Mr. Spencer noted that while a cotton sector support fund had been advocated, in reality 
the creation of agricultural insurance may be better for stabilizing farmer's incomes.   
25. Benin  and Burkina Faso  presented broad areas of development assistance support for the 
proponents.  Benin noted the considerable reform that had taken place in the sector in the proponent 
countries, including Benin.  Studies had shown that  cotton prices and the sector were near collapse 
because of the trade-distorting subsidies.  Deve lopment assistance was therefore urgently needed 
while trade-distorting domestic support and e xport subsidies were being eliminated.   
26. The broad areas identified by Beni n and Burkina Faso included:  
- production infrastructure, silos storage, quality-testing laboratories to comply 
with international standards and fi nancial/technical assistance for cotton 
projects;  
- improvement of production yields;  
- transportation for inputs and for final products;  
- consolidation of support services, such as market support measures, finance, 
credit, trade promotion, etc;  
- training for the staff of cotton-producing enterprises;  
- improvement of competitiveness and strengthening of management 
techniques;  
- support for diversification;   WT/L/587 
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- support for research, particularly for the establishment and management of 
National Cotton Research and support for agricultural research institutions;  
- awareness programmes for farmers; and,  
- Stability Fund ( fonds de soutien ) for managing price instability and 
guaranteeing minimum prices; and financial credits and funding for agricultural inputs.   
27. Several other countries and agencies intervened to underscore the areas identified by Burkina 
Faso for the proponents and to elaborate on specific points.  Egypt  emphasised the marketing of 
cotton plants and seeds as a useful way of improving cotton sector competitiveness.  Cotton research and extension were necessary to improve yield.  This would involve in troduction of high yield 
varieties, the use of herbicides and training progr ammes for research staff.  Cotton production and 
seed ginning were areas to which Egypt and sev eral other countries attached importance.  
Development assistance for African countries was essential, as a first step, in off-setting developed 
country subsidies.  Mali , one of the cotton proponent countries, underlined the urgency for Africa to 
increase scale economies.  Accelerated regional integr ation was a critical approach that would enable 
Africa to address the issues and meaningfully res pond to the proposals in the "Sectorial Initiative on 
Cotton".  Mali recommended the creation of a Re gional Research Programme.  Support for added-
value cotton-processing industries was part of the solution.  Downstream, value-added industries 
needed to be envisaged over the medium to the long-term, between now and 2010.  A support fund for 
price stability was essential.  Niger  pressed the case for the fonds de soutien ; suggesting that the 
funding could come from banks, bilateral donors, and others (although, previously, funding came 
from cotton sales).  Sudan  supported the suggestion by Mali fo r added-value processing industries, 
particularly for financial and technical assistance in the rehabilitation of textile industries.  In addition, 
the representative of Sudan also suggested fi nancial and technical assistance for production 
infrastructure, irrigation structures, and the extens ion of credits to farmers.  He underscored the 
urgency for improved donor coordina tion in the delivery of technical assistance; and,  market access 
improvements for cotton.   
28. The World Bank
12 suggested that it would be useful to explore opportunities for 
collaboration at the regional level in  order to address the challenges posed for small, isolated national 
systems.  A regional cotton technology programme would be useful.  Nati onal cotton organizations 
needed federation at the regional level.  Regi onal organizations like ECOWAS and WAEMU would 
have to play critical roles in this process.  Dive rsification of export channels, support for downstream 
activities, income and price stabilization institutions  would contribute to finding solutions.  Quality 
and certification systems needed improvement.  Do mestic reforms needed to be maintained and 
pursued.   
29. There was an extensive discussion at this session on the merits and demerits of stabilization 
funds, with most taking the view that market-bas ed instruments such as commodity price risk 
instruments were more efficient and reliable in deal ing with commodity price fluctuations.  The view 
was also expressed that if stabilization funds were to  exist, they could only be best managed by the 
producers themselves rather than by governments.   
                                                      
12 Mr. Ousmane Badiane. WT/L/587 
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D. 
SESSION III :  ROLES AND CONTRIBUTIONS OF MULTILATERAL INSTITUTIONS  
CHAIRMAN : Ambassador Henrik Iversen, Permanent Representative of Denmark, Geneva  
 
30. Session III focused on:  
• Presentations by invited multilateral inst itutions, their roles and the concrete 
opportunities they offered for financ ial and technical assistance.   
 
• The considerable activities by multilateral in stitutions and bilateral donors around the 
Integrated Framework for Trade-Related Technical Assistance to LDCs (IF), the Poverty Reduction Strategy Papers (PRSPs), and other mechanisms for cotton-specific 
financial and technical assistance wi thin agency country programmes.   
 
• Ideas and views on scope for improvement we re expressed by African cotton proponent 
countries, African regional  organiz ations, and bilateral donors.   
 
31. The World Bank
13 led the contributions by agencies at this Session.  In doing so, it focused 
on four key areas, namely: i) reviewing the basic features of the global cotton market and their implications for remedial action; ii) suggesting ge neral principles; iii) identifying specific actions; 
and, iv) suggesting possible next steps.   
32. The World Bank characterized and reviewed the main features of the global cotton market, 
the understanding of which would provide a good basis fo r targeted financial and technical assistance.  
It noted that the global cotton market was currently defined by slow growth in demand; rapid productivity growth; increased supply by new entrants ; downward price trends and price volatility.  
Although West Africa was competitive with low wage  labour costs and high cotton quality yields, it 
was likely that the challenging cotton market situati on for exporting countries, particularly those in 
Africa, would become tougher.  To respond to th is tough and challenging situation, rapid progress 
was essential in the agricultural nego tiations.  Furthermore, the pace of  domestic reform needed to be 
stepped-up, matched with assistance at the country level by donors and agencies.   
33. General principles around which reform were to  be undertaken and assistance provided were 
suggested.  In this regard, the World Bank identif ied the Poverty Reduction St rategy Papers (PRSPs) 
as the basis for overall country strategies.  Direct  assistance to farmers was essential.  Regional 
synergies needed to be exploited in order to redu ce the costs imposed by small, isolated holdings and 
hence achieve scale economies.  The role of the private sector needed enhancement.  Reliance on 
market-based instruments was indispensable.  Sp ecific action was recommended.  These included 
principally enhancement of productivity; increased  quality standards; exploration of downstream 
production niches; improvement of trade facilitation a nd logistics; and, continuation of the process of 
domestic reform.  To pursue recommended action, po ssible next steps suggested were specific donor-
coordinated initiatives; the careful preparation of diagnostic trade and sectoral integration studies; 
and, a business plan for a "donor-country joint initia tives".  The World Bank suggested that a follow-
up conference may be useful to this end.   
34. The African Development Bank
14 intervened to state that its work was based on the PRSPs, 
from which the AfDB developed its Country Strategy  Papers (CSPs).  The Bank based its CSPs on 
PRSPs because it is in the latter that countries define their priorities.  The CSPs set out priority areas 
of AfDB in individual African countries over a 3-year period.  As part of its work, the AfDB financed 
projects, programmes and studies.  In doing so, it informed the Workshop that the AfDB financed 
trade projects, and could finance cotton-related projects.  The AfDB hinted that it was about to embark on the preparation of a "multinational project on cotton for the major cotton-producing 
                                                     
 
13 Mr. Uri Dadush. 
14 Mr. Chuku-Dinka Spencer.  WT/L/587 
 Page 11 
  countries in West and Central Africa".  Furthermore,  in its work, the AfDB assisted governments with 
the process of de-centralization and de-regulati on.  The AfDB would endorse, as suggested, a 
coordinated, monitored initiative.   
35. UNCTAD
15 observed that commodities presented sp ecial problems that needed to be 
addressed.  Competitiveness was essential, but not all.  The problem was when markets do not 
function properly, and distortions prevent the market from correcting itself.  Market distortions needed to be addressed and eliminated.  In a ddition to addressing "market access", the issue of 
"market entry" also needed to be addressed.  UNCT AD also subscribed to th e analysis that West 
African countries have a competitive advantage in co tton.  In seeking solutions and measures to assist 
cotton producers in West and Central Africa, account n eeded to be taken of the fact that cotton was a 
finance-intensive sector.  It may be necessary also to mobilize financing from capital markets.  To this 
end, the role of the private sector would be necess ary.  The JITAP, as a technical assistance delivery 
mechanism, around which agencies and bilateral dono rs had coalesced and which had produced good 
results, had a salient role to play.  The represen tative of UNCTAD suggested that that UNCTAD was 
considering ideas on the establishment of an Inte rnational Task Force on Commodities and an 
International Diversification Fund.   
36. UNDP  linked human development to trade policies.  It noted that trade-distorting subsidies 
needed to be subjected to disciplines.  Financial and technical assistance were imperative to assist 
African countries.  The Integrated Framework provi ded a useful mechanism for the delivery of trade-
related technical assistance in the areas where country priorities had been reflected.  The areas for 
capacity-building included negotiation and interpreta tion of trade agreements, and incorporation of 
trade policy and priority areas in development plans.   
37. The International Trade Centre (ITC)
16 informed the Workshop that it had no significant 
work at the moment, because much of its work and the technical assistance it delivered were demand-
driven.  Technical assistance delivered by ITC was on  the basis of needs assessments, which could be 
either at national, sub-regional or regional level.   However, it would need to receive specific demands 
and it would require resources to pr ovide such assistance.  Some of  the areas where it could provide 
such assistance were in the production of a Cotton Gu ide, market studies, etc.  Furthermore, the 
Integrated Framework and the JITAP in which the IT C participated would be useful and relevant in 
responding to the technical assistance needs of the African cotton-producing and trading countries.   
38. The International Monetary Fund  pointed to the paper prepared and circulated for the 
Workshop.  The Fund addressed the question of how the international community could best respond 
to the mix of short and long-term difficulties faced by cotton-producing countries and the policy 
responses needed from the countries themselves.  Th e Fund stated that it would continue to press 
industrial countries to eliminate agricultural subsid ies, including for cotton, and to open their markets 
to products coming from low-income countries.  Th e Fund would also consider other possibilities for 
support.  The Poverty Reduction and Growth Facility (PRGF) of the IMF was its main instrument and 
framework for supporting low-income countries.  IM F programmes reflected the priorities outlined in 
the PRSPs.  Arrangements under the PRFG supp ort governments' macroeconomic programmes 
directed at achieving sustainable adjustment in response to balance of payments difficulties of a 
structural character.  Thus, PRGF-supported pr ogrammes provided a consistent framework for 
integrating macroeconomic and structural policies that will contribute to enhancing prospects for 
sustainable growth and reductions in poverty.  The Fund emphasised that while its Articles of Agreement prevented it from providing specific se ctoral assistance, it could support countries facing 
balance of payments shocks, including those eman ating from the cotton sector.  Furthermore, Fund 
staff were also considering how the needs of cott on-dependent countries could be given more explicit 
recognition.  The Fund informed the Workshop that , for instance, in 2001, with the fall in cotton 
prices, the Board of the IMF authorized an augmentation of Mali and Chad's access to PRGF 
resources.   
                                                     
 
15 Mr. Mehmet Arda. 
16 Mr. Joe Smadja. WT/L/587 
Page 12 
  39. The Fund noted that problems associated with previous attempts to support cotton producers 
have illustrated the urgent need for deeper, longer-l asting and more predictable approach to reform 
and assistance.  The consensus was for a reform st rategy to increase producers' participation in 
management of the cotton sector, improve the shar e of export earnings received by producers, reduce 
systemic risk, and improve governance.  In accord ance with its mandate, the World Bank was leading 
the process of reform in this area.  Some of the stru ctural measures needed involved:  i) shifting to the 
private sector the non-core activities of the cotton pa rastatals – such as extension services, transport 
activities, purchase and distribution of inputs, marketing of seed cotton, etc; ii) reinforcing the 
capacity of farmer associations; iii) greater competition by opening up the sector to private ginneries, etc.; iv) developing appropriate risk management strategies, particularly methods for reducing the 
risks associated with commodity price and exchange rate fluctuations.   
40. The IMF was also providing appropriate support under the Integrated Framework.   
41. The FAO  highlighted areas to be accorded pr iority such as product-quality improvement; 
improvement of productive efficiency; strengt hening the capacity of involved countries for 
implementing trade policies; preparing national an d regional cotton studies; and, down-streaming 
processing industries to achieve value-added.  The F AO also indicated its willingness to be joined and 
to participate in follow-up activities to the Cotonou Workshop.   
42. UNIDO
17 observed that there was wide scope for technical assistance to the cotton proponent 
countries, but the key issue was the scarcity of resources and funding.  The countries that were 
dependent on cotton needed to be assisted with value-added.  UNIDO was pursuing a "Triple C" 
strategy to assist countries to  "compete, conform and connect".18   
43. Ethiopia, Burkina Faso, Chad, Côte d'Ivoire, Guinea, and Senegal  intervened to 
underscore several points: the critical dependence of the participating countries on cotton production 
and trade; the importance of eliminating trade-di storting measures; the urgency for technical and 
financial assistance; the dire need for trade credit a nd finance; and, the vital importance of the role of 
multilateral institutions gathered in Cotonou as well as th e role of the bilateral donors.  They called on 
the multilateral institutions and the bilateral donors to do more.  Intervening countries were strongly 
unanimous at the end of the Workshop that concrete action was required.  Several, repeatedly, pointed 
to support for processing industries to add value su ch as in textiles and clothing in order to more 
effectively address harmful effects of commodity -dependency.  Institutions and donors were 
repeatedly urged to "demonstrate goodwill".   
44. In the interactive discussions, agencies: DAC/OECD, the West African Development Bank 
(BOAD), the Economic Community of West African States (ECOWAS), the Economic 
Commission for Africa (ECA), the African Development Bank (AfDB), and UNIDO  intervened to 
contribute, clarify issues, respond to questions posed, and pose questions themselves.  West African 
Regional institutions requested for assistance to build  regional synergies and achieve scale economies.   
45. The AfDB  responded to questions on trade finance and credit to inform Workshop 
participants that through its private sector wi ndow, it provided lines of credit and trade finance, 
including for inputs, agro-industries, and processing industries.  It also provided assistance in trade capacity-building.  The AfDB, cautioned against a ny "rush to establish task forces" on cotton or 
commodities.  It suggested that the FAO was working in this area, had task forces and should be 
consulted.   
46. The West African Bank for Economic Development  stressed the paramountcy of building 
regional synergies.  It took the strong position that  "individual countries should not be allowed to 
create its own national industries, except on a re gional or sub-regional basis". Strengthening the 
private sector was underscored as a priority.   
                                                     
 
17 Mr. Abel Rwendeire. 
18 See Annex 15.  WT/L/587 
 Page 13 
  47. The DAC/OECD  urged greater donor coordination; point ed to the policy-relevance and value 
of the use of the Integrated Framework in mainstreaming trade into PRSPs and national 
developments.  The DAC/OECD representative drew  the attention of the Workshop to DAC 
Guidelines for Trade Capacity Building and its re levance in assisting Afri can countries faced with 
challenges in the cotton sector to respond to those ch allenges.  He joined the unanimous strain of 
voices in urging a shift from individual country effort s to building regional synergies in the cotton 
sector.  Africa could meet the competitive challenges better on a regional, rather than on a national 
basis.   
48. UNIDO  urged attention to the necessity to support SMEs without collateral.  The ECA  asked 
the US and the EU how they would have dealt with "stabilization of farm prices" within the US Farm 
Bill and CAP respectively.   
49. The EC and the US offered comments.  The EC drew attention to the mandate and work of 
the European Investment Bank.  The financing f acility of the European Investment Bank will be 
available shortly.  ACP countries could contact the European Commission.  The reason that Africa has 
not been able to transform upstream cotton inputs into downstream value-added products is because 
of the lack of investors and investments.  Africa needed to address this cha llenge and respond to the 
issues by improving the environment for investments and investors.  This was a question that Africa needed to address itself.  The United States  considered that it was essential that officials from the 
Finance and other relevant ministries were brought into the process of identifying national economic 
priorities, including in the targeted efforts to revamp the cotton sector.  Doing so would ensure 
coordination and that the relevant  government ministries/departments moved in the right direction.  
The United States also made the poi nt that several of the African countries faced with challenges in 
the cotton sector were Highly Indebted Poor Countries (HIPC).  Therefore, there was also a need to 
ensure that debt levels are ma nageable and sustainable.   
Conclusion
:  
 50. To conclude, the Session Chairman underscored four points which he observed were self-
evident from the intense, constructive presen tations and exchange of views, namely:  
• the necessity for urgent solutions in a sector with systemic implications for Africa;  
 
• the requirement for a coordinated and collective effort, having regard to the fact that no 
individual agency or bilateral donor could, on its  own, effectively respond to the challenges 
faced by the cotton-dependent countries in low-income, HIPC in Africa;  
 
• the vital necessity for involved African count ries to seek to achieve scale economies through 
building regional synergies; and,  
 
• the considerations that solutions would neither  be immediate nor automatic, but "work in 
progress".   WT/L/587 
Page 14 
   
E. 
SESSION IV :  ROLES AND CONTRIBUTIONS BY BILATERAL DONORS  
CHAIRMAN : Ambassador Henrik Iversen, Permanent Representative of Denmark, Geneva 
 
51. Session IV focused on :  
• Contributions by bilateral donors in whic h they provided indications of existing 
concrete opportunities and scope for furth er financial and technical assistance in 
support of the involved African countries; and,  
 
• An exchange of views on the question of "institutional coordination of financial and 
technical assistance" and "follow-up arrang ements after the Cotonou Workshop".    
 
52. The EC19 contributed by identifying on-going assistance;  and, pointed to the proposals that it 
had circulated on an "EU-Africa Cotton Partne rship", reflecting expa nded opportunities.  The 
proposals still had to be approved and endorsed by  EU Council.  The EU representative highlighted 
several key elements of the proposal under consider ation.  Broadly, the proposals were aimed at 
mitigating commodity shocks, although there we re specific proposals on cotton.  The proposals 
included elements on national cotton strategies; in vestments for the cotton sector; value-added and 
processing at the national level; and, strategies and methods for reducing commodity price risk vulnerability.  On the latter, several possibilities were being explored such as the co-financing of 
premiums for market-based instruments.  Consider ation was also being given to a universal cotton 
classification system.  It was noted that there were  existing instruments with several of the involved 
countries for cotton sector assistance.  The EU had inv ested considerably over time in the sector and 
related areas.  The EC representative informed Workshop participants that Economic Partnership 
Agreements (EPAs) were under negotiati on.  In light of the cotton priorities that they had been raised 
by the African countries, the negotiations would no w also have to take account of how the EPAs 
could be effectively used to take account of prior ities on cotton.  To this en d, negotiations would seek 
greater effectiveness in trade facilitation and increased investments.  The EC signalled that invitations 
would be circulated for a meeting in Paris in the second week of June on the, "EU-Africa Cotton Partnership".
20   
53. The United States21 contributed significantly at both a policy level and at the level of actual 
programme opportunities.  It described existi ng assistance and explained opportunities for expanded 
US assistance.  The US recalled that the Works hop resulted from General Council consultations in 
Geneva.  The Workshop was essential for several reasons, more so becau se if was a necessary 
gathering of trade and development communities to enhance coherence and coor dination.  The urgent 
need existed for greater coordination amongst ministri es/departments of trade, finance and agriculture.  
Reflection of cotton-sector priorities in country PR SPs was necessary in order to provide scope for 
bilateral donors to respond to identified priorities.   The United States had established the Millennium 
Challenge Account (MCA), with "new" (additional)  money in the Account.  The Board of the MCA 
was composed of broad representation.  The Un ited States Permanent Representative was also a 
Member of the Board of the MCA, which ensured that, inter alia , trade issues and concerns would be 
taken into account in project and programme approval.   The US noted that already 63 countries had 
secured approvals in Fiscal Year 2004.  African  countries present at the Workshop with cotton 
priorities were encouraged to apply to the MCA.   
                                                      
19 Mr. Philippe Mikos.   
20 Statement by the EU Delegation. 
21 Ambassador Linnet Deily, US Permanent Representative, Geneva.    WT/L/587 
 Page 15 
  54. Also, the United States
22 re-iterated its strong support for the Integrated Framework.  It 
informed the Workshop that the United States would assume one of the rotating bilateral coordination 
positions in the IF in the month of May.  In add ition, significant opportunities existed in US bilateral 
programmes, including but not limited to such areas as:  increasing productivity; value-added; trade 
facilitation; and new technology (a workshop will shortly be organized in Ouagadougou on new 
technologies).  The US was committed to working an d supporting the efforts of African countries in 
the cotton sector in several ways.  It would contri bute through support for the development of regional 
markets; and, information systems in Africa.  Regional hubs would be used.  Support would be 
provided for the development and st rengthening of value-added.  The Workshop was informed that 
the 4 cotton proponents (Benin, Burkina Faso, Chad  and Mali) would visit the United States in the 
summer.  The United States was also committed to  working through the PRSPs.  The US was hopeful 
that the Workshop and its outcomes would provide positive impetus to move the Doha Development 
Agenda (DDA) forward.23   
55. Japan's24 contribution focused on existing assistance.   Japan explained the process for the 
Tokyo International Conference for African Deve lopment (TICAD).  The 1993 Tokyo Conference 
initiated "a continuing process of support for Africa and consensus-building around African 
development priorities".  The basis of Japanese polic y towards Africa, constructed on the foundation 
of TICAD, revolved around the pillars of growth, poverty-reduction and integration of Africa into the 
global economy.  The Japanese representative conveye d that opportunities existed within the TICAD 
process and framework to support African countri es facing challenges in the cotton sector.  For 
instance, during TICAD III (autumn of 2002), Prime Minister had committed US$ 5 billion over 5 years for assistance in areas such as health and medical care, education, water, food assistance, etc.  
Japan's Official Development Assistance (ODA) for Sub-Saharan Africa stood approximately at 
US$ 850 million per annum.  Also, Japan provide d assistance to LDCs.  This assistance was 
mobilized around and delivered to areas of basic human needs such as water supply, health and 
medical care, basic education and rural developmen t.  The representative of  Japan stressed that, 
"These projects surely made substantial contributio ns to LDCs' economic and social development, 
including cotton production".  On market access for cotton, Japan stated that duty-free, quota-free 
market access was assured in Japan for imports of African cotton.  Nonetheless, Japan noted that in 
spite of duty-free, quota-free market access, Japan's imports of African cotton was declining, which 
suggested that price was not the only factor at play  for importers.  Finally, the Japanese representative 
informed the Workshop that Japan would organize, together with the World Bank, in November 2004, 
the "TICAD Asia-Africa Trade a nd Investment Conference".  It made clear African and country 
ownership was a key element in identification of  priorities and accessing financial and technical 
support.  It cautioned that although needs could be infinite, resources were finite.
25   
56. Canada's26 contributions focused on existing assistan ce.  Canada stressed the importance of 
complementarity between trade and development polic ies.  African development was of particular 
importance for Canada, reflected in the fact that 50%  of the new budget of the Canadian International 
Development Agency (CIDA) was allocated to Afri ca.  Canada's resources for African development 
were earmarked for priority areas such as HIV/AI Ds and education.  Canada was involved in 
environmental and agricultural projects, including those related to cotton.  Canada was running a 
project in West Africa to support skills development for West Africa's agricu ltural leaders.  This 
project would enable agricultural managers to gain  a better understanding of the issues at stake and be 
better represented at WTO Trade Negotiations.  Cana da was contributing to a World Bank project in 
Benin to facilitate the privatization of cotton pr oducers.  There was Canadian support for two World 
Bank structural adjustment credit projects in Chad a nd Mali aimed at restructuring the cotton sector in 
these two countries.  In Mali and Burkina Faso, th ere were other projects, enabling agricultural 
                                                      
22 Ms. Emmy Simmons, Assistant Administrator, Bu reau for Economic Growth, United States Agency 
for International Development (USAID).   
23 Statement by the US Delegation. 
24 Mr. Kunito Imai, Ministry of  Foreign Affairs, Japan.   
25 Statement by the Japanese Delegation. 
26 Mrs. Lorraine Bélisle, Director, Pr ogramme Support Unit, Benin.   WT/L/587 
Page 16 
  producers to play a more active role in the cereal s ector and organize food industries in order to obtain 
fair prices for their products and boost production capacity.  In addition, Canada provided strong 
support for multilateral organizations  like OAM, UNCTAD and ITC, more directly and effectively 
involved with agriculture and cotton.  Canada re-s tated its strong policy and financial support for the 
Integrated Framework and the JITAP.  The IF a nd the JITAP were focused on providing support for 
countries in areas the countries themselves identified as pr iorities.  Canada considered that for aid to 
be effectively used in priority areas, nationa l and international policy coherence was crucial.
27   
57. China's  contributions to the Workshop on the development aspects of cotton were 
highlighted in three areas, namely: i) the significant rise in its cotton import demand from the African region; ii) elimination of export subsidies on co tton at its WTO accession; and, iii) development 
assistance provided by China to African countries.
28   
58. On increased import demand, Chin a informed the Workshop that  cotton exports from the four 
cotton proponent countries (Benin , Burkina Faso, Chad and Mali) increased from US$ 20.6 million in 
2002 to US$ 131.73 million in 2003.  Disaggregated, cotton imports from Benin increased 3 times to     
US$ 68.25 million; cotton imports from Chad increased  by 85% to $ 2.8 million; cotton imports from 
Mali grew 18 times to US$ 28.32 million ; and, cotton imports from Burkina Faso increased 47 times to US$ 32 million.   
59. China emphasised that it was providing development assistance to many African countries, 
even though itself was a developing country.  It info rmed the Workshop that over the decades, it had 
built over 714 turn-key projects in 48 African countri es, of which 134 were agricultural projects.  On 
the DDA, China supported calls for reduction of trad e-distorting domestic suppor t, with substantial 
reduction by developed Members.  China also ca lled for the elimination of all forms of export 
subsidies.   
60. This Session on "The Roles and Contributions by  Bilateral Donors" similar to the previous 
Session on "The Roles and Contributions by Multilate ral Institutions", generated intensive discussions 
and exchange of views.  Country participants  (Benin, Chad, South Africa, Malawi, Uganda, 
Ethiopia, and the EU) and Organizations  (African Union and the West African Economic and 
Monetary Union) intervened to interact on several  points of the contributions, emphasise particular 
issues, and make appeals for progress.   
61. Chad
29 welcomed the sincerity of positions and the transparency of contributions at the 
Workshop, and considered that progress per se  had been made.  Chad belie ved that compromise could 
be achieved on some of the more complex issues still outstanding.  Chad was encouraged by the 
positions and contributions of the EU and the Unite d States and their expressed willingness to assist to 
support cotton-specific financial and technical assistance.   
62. South Africa30 set out several elements.  It noted th at although the multilateral trading system 
was the only sustainable system for "a fair market -oriented trading system", vital market access was 
not enough.  South Africa was impressed by th e range of proposals and offers by multilateral 
institutions; each had a valuable offer to make to  address the challenge faced by cotton-producing and 
trading African countries.  Similarly, South Africa was impressed by the donor s, their sincerity of 
efforts and their expressed willingness to address a serious issue, including through bilateral donor 
coordination.  Coherence at the lo cal and national levels were necessary if progress was to be made.  
And NEPAD offered a framework for such coordinati on.  Coherence was urgent and the mechanisms 
of the NEPAD, the IF, the JITAP, with the WTO, offered such opportunities.  The Cotonou gathering 
of the trade and development communities offered the opportunity to make progress, to strengthen the WTO as an institution and to achieve coherence on a specific trade developm ent challenge.  South 
                                                     
 
27 Statement by the Canadian Delegation. 
28 Statement by the Chinese Delegation. 
29 Ambassador Abdurrahman, Embassy of Chad, Brussels.   
30 Mr. Faizel Ismail, South African Trade Representative, Brussels.    WT/L/587 
 Page 17 
  Africa joined those who earlier had noted that de velopment was a long-term process and there were 
no quick solutions.   
63. Malawi,  while it acknowledged that there was consid erable overlap and wastage of resources 
for financial and technical assistance, it urge d bilateral donors to enhance coordination.  Benin , while 
it acknowledged the value of the contributions  made, urged more positive contributions.  Ethiopia  
considered that the existing opportunities articulated , contributions identified and the expectation of 
future assistance had created a win-win situation.  Uganda  proposed the establishment of a Fund that 
would lend at low interest rates to cotton farmers in Africa.   
64. The WAEMU  considered that a degree of progress ha d been made.  They stated that follow-
up was important and that this should not be another missed opportunity.   
 
F. 
CONCLUDING SESSION  
CHAIRMAN : Deputy Director-General Dr. Kipkorir Aly Azad Rana  
 
65. DDG Dr. Rana reviewed the presentations and di scussions made over the two-day Workshop.  
Dr. Rana summarized the outcomes from the various  4 substantive Sessions of the Workshop.  
Dr. Rana circulated the draft of Summary C onclusions and Outcomes from the Workshop, on the 
Secretariat's responsibility.   
66. Mauritius31, as Coordinator for the WTO African Group, in Geneva, and Benin32 (on behalf 
of the host country and the 4 cotton proponent countries) intervened.   
67. Mauritius  considered that progress had been made.  It underlined the vital necessity for 
concrete follow-up.   
68. Benin  expressed appreciation to WTO Director-G eneral Dr. Supachai Panitchpakdi for the 
initiative in organizing the Workshop.  Benin consider ed that an important step had been taken and 
that the results of the Cotonou Cotton Workshop w ould contribute in "unblocking the Agriculture 
Negotiations in Geneva".  The Cotonou Workshop was an important  and positive first step.  The 
Cotton Proponent Countries would be patient.   
69. The Workshop took note  of the Summary Conclusions and Outcomes of the WTO African 
Regional Workshop on Cotton (subsequently circulated in document WT/L/564 ).   
 
  Moderator/Secretary:    Chiedu Osakwe Rapporteurs:  Jean-Pierre Lapalme 
   Bijit Bora 
Editor:   Gerardo Melogno Logistic coordinator: Selvarany Reynaud 
                                                     
 
31 Ambassador Meetoo, Permanent Representative of Mauritius, Geneva, and Coordinator of the WTO 
African Group.   
32 Ambassador Samuel Amehou, Permanent Representative of Benin, Geneva, and Spokesperson for 
the four cotton proponent countries.   WT/L/587 
Page 18 
  
III. OUTCOMES - SUMMARY CONCLUSIONS  
70. We have now come to the end of the 2-da y WTO Secretariat organized African Regional 
Workshop on Cotton.  Following two days of pr oductive discussions, several  remarks are hereby 
offered on the responsibility of the Secretariat.   
71. The Workshop was opened by WTO Director-Gen eral Dr. Supachai Panitchpakdi.  Minister 
Akplogan, of Benin, host country Minister for Industry, Commerce and Employment Promotion,  
delivered introductory remarks on behalf of the proponent countries of the Sectoral Initiative on 
Cotton.  (Mr. Rogatien Biaou, Benin Minister for Foreign Affairs and African Integration was present 
at the Opening Ceremony).   
72. There is no doubt that the discussions at the Workshop were intensive, constructive and 
positive.  Participants agreed that the presentati ons were of high quality a nd the interventions amongst 
participants in the various sessions reflected se riousness of purpose, realism and a new sense of 
pragmatic engagement.  In their interventions, pa rticipants unanimously welcomed the initiative by 
the WTO Secretariat in organizing the Workshop.  It was felt that the Workshop was an important 
confidence-building measure between the 4 proponent countries,
33 the 26 involved African 
countries,34 the 18 multilateral intergove rnmental institutions,35 and the representatives of Canada, the 
European Commission, Japan, the United States and China, all of whom were represented at very high 
levels.  The Workshop was well attended with 150 registered participants, who acknowledged that the 
Workshop was an important and necessary gatheri ng between the trade and development communities 
and was a concrete expression of efforts by all pa rticipants for improved c oherence between the two 
communities.   
73. Following the Opening Ceremony, there were 4 sessions.  Session I on Factors in African 
Cotton Production and Trade was chaired by the Wo rld Bank.  Session II on Cotton-Specific Types of 
Financial and Technical Assistance was chaired by  the African Development Bank.  Session III and 
IV on the Roles and Contributions of Multilateral In stitutions, and Bilateral D onors respectively, were 
chaired by Ambassador Henrik Iversen, Permanen t Representative of Denmark, in Geneva, and 
Chairman of the Integrated Framework for Trade- Related Technical Assistance to Least-Developed 
Countries.   
74. There was acknowledgement of the systemic im portance of the cotton sector for the involved 
countries and in its linkage, in several of the countries involved, to their overall macroeconomic 
performance. Presentations and subsequent exchange  of views established the vital importance of 
cotton production, consumption and trade for African countries in light of the sector's significant share in GDP, as a share of total merchandise and agriculture exports.  Many households are dependent on the cotton sector and there was an urgent  need to respond, in an integrated manner, to 
                                                     
 
33 Benin, Burkina Faso, Chad and Mali.   
 34 Angola, Cameroon, Central African Rep., Congo (Dem. Rep. of), Côte d'Ivoire, Egypt, Ethiopia, 
Ghana, Guinea, Kenya, Madagascar, Malawi, Morocco, Mozambique, Niger, Nigeria, Senegal, Somalia, South 
Africa, Sudan, Tanzania, Togo, Tunisi a, Uganda, Zambia and  Zimbabwe.   
35 African Development Bank, African  Union, ACP Secretariat; Economic Community of West African 
States; United Nations Food and Agriculture Organization; Intergovernmental Francophone Agency; 
International Cotton Advisory Committee; International Monetary Fund; International Trade Centre; New 
Partnership for Africa's Development; Organization for Economic Cooperation and Development; United 
Nations Conference on Trade and Development; United Nations Development Programme; United Nations 
Economic Commission for Africa; United Nations Industrial Development Organization; West African 
Development Bank; West African Economic and Monetary Union; and, the World Bank.    WT/L/587 
 Page 19 
  the challenges faced by African countries in th is sector.  The sector was linked to the poverty 
reduction efforts in several countries, particularly th rough the income of farmers.  The point was made 
that cotton production improved cereal production,  hence contributing to food security.   
75. African cotton was of very high quality and ha d comparative advantage.  At the same time, 
the facts made evident that the gl obal cotton market was characterized by slow demand growth, rapid 
productivity growth, new entrants into the market, downward price trends and price volatility.  Some 
presentations suggested that there was the likelihood  of the continuation of this trend.     
76. The principal focus of the Workshop was on the Development Assistance Aspects 
(comprising of financial and technical assistance) of the Cotton Initiative.  The Workshop presented a 
first opportunity for all the relevant stakeholders to meet in a meaningful dialogue on the Development Aspects of the Cotton Initiative.  This exercise has produced useful results.   
77. To set the basis for discussions, following presen tations by the World Bank, the IMF, the 
African Development Bank, the OECD/SWAC, the International Cotton Advisory Committee, the 
Food and Agricultural Organization, participants at the Workshop exchanged views on the complex 
range of factors influencing African cotton producti on, consumption, trade and price trends.  The 
presentations made evident that these factors were both internal and external to the involved countries.  
They included internal taxation policies, decline of cotton as a share of total fibre consumption 
relative to chemical fibres in textiles and clothing,  new technologies, increased transgenic varieties, 
internal structural difficulties (trade and finance) within individual countries, the impact of 
HIV/AIDS, and external trade barriers, particular ly trade distorting government intervention.   
78. Although the Workshop focused on the Developm ent Aspects of the Cotton Initiative, it was 
frequently underlined that the optimal and compre hensive response lay in coherence between trade 
and development policies.  There was a balanced co nsideration of all the objective factors in complex 
interplay.  In considering these factors and in focu sing on the Development Aspects, participants felt 
that the trade aspects could only be meaningfully and effectively addressed within the broader DDA 
agricultural negotiations, while preserving the focu s on cotton in doing so.  At the same time, a 
propos  the Trade Aspect, the point was made that cons ultations would be requi red with the proponent 
countries before a definitive decision is taken on how to address this matter.   
79. The Workshop dedicated considerable time to  exploring the necessary mix of approaches, 
policies, and areas of focus for effectively addressi ng the Development Aspects of the Initiative.   
80. The intensive interaction amongst participants  reflected a valuable and policy-relevant 
exchange of views.  Expectations and needs were  expressed.  These were considered in an exchange 
pointing to the necessity for a realistic adjustment of such expectations.  There were suggestions for 
the establishment of a stabilization fund ( fond de soutien ) to respond to price fluctuations.  There were 
also suggestions for greater reliance on and use of market-based mechanisms su ch as credit guarantee 
schemes, agriculture insurance, co-financing of prem iums on a market basis, etc.  There was also a 
strong convergence to base solutions within existi ng mechanisms.  The pay- off in working within 
existing mechanisms would start almost immediatel y.  Costly and tedious bureaucracy would be 
avoided.  Focus and efforts would be intensively de dicated to the substance of financial and technical 
assistance.  Furthermore, the critical distinction w as made between the mere institutional formality of 
a "fund" per se
, on the one hand, and the real issue of "funding", on the other.  In addition, there was 
explicit reluctance amongst the vast majority of  intergovernmental multilateral institutions and 
bilateral donors to work outside of existing mechanisms.   
81. Against this background, there were several useful outcomes and areas of convergence:  
82. Participating intergovernmental multilateral ins titutions, as well as clearly identifying existing 
programmes for financial and technical assistan ce, provided positive indications of additional 
financial and technical assistance in their areas of competence.   WT/L/587 
Page 20 
  83. Bilateral donors and partners also very clearl y identified existing and new programmes for 
financial and technical assistance and provided as we ll positive indications of additional financial and 
technical assistance.  Furthermore, in this regard, inter alia , the EU provided information on its 
proposed EU-Africa Partnership for Cotton Devel opment; and, the United States on its Millennium 
Challenge Account.  Japan provided information on opportunities under the TICAD.  Canada also 
provided information on its support for trade-related technical assistance to Africa, including through 
multilateral institutions and mechanisms.  China pr ovided detailed information to demonstrate its 
contributions through significantly improved demand  for African cotton.  An appeal was made for 
enhanced donor coordination, ha rmonization and synergies for the avoidance of duplication and 
overlap.   
84. Broad and specific outcomes, for follow-up actio n, were evident in three distinct areas, 
namely: i) areas of focus; ii) delivery mechanisms for cotton-specific financial and technical assistance; and, iii) enhanced coordina tion and follow-up arrangements.     
• Areas of Focus : Drawing on the abundant lessons of  development and trade capacity 
building, there was support for the position that  the effective delivery and the meaningful 
absorption of cotton-specific financial and technical assistance depended on well prepared 
sectoral (or economy-wide trade) diagnostic integration studies.  On the basis of proper diagnostics (which already existed in several cases), financial and technical assistance would 
then be targeted, as appropri ate,  to such areas like:  
 
- Continued cotton sector reform, including the improvement of domestic 
competition in production, distributio n, buying and selling – legislative 
framework for investors – in order to achieve increased market efficiency;  
- Production-related support – strengt hening cotton production methods; 
infrastructure improvement; support for producer organizations; increasing 
yield with new cotton varieties;  
- Commodity price risk management st rategies through the use of market-
based instruments;  
- Macroeconomic safety nets by  relevant institutions;  
- Support for quality control and standards in cotton production;  
- Enhancement and support for cotton sector support services & product sector 
strategy development;  
- Export promotion and market support services;  
- Support for diversification and down- stream value-added production in 
textiles and apparels.  (A case was made for assistance in resuscitating the 
cotton sector in countries that have experienced civil conflict and war);   WT/L/587 
 Page 21 
  
- Establishment of Regional Cotton Technology Programmes; Regional 
Research Programmes; and, Regional Capacity Building Programmes (to be 
implemented by regional bodies such as the ECOWAS and the WAEMU 
within the framework of NEPAD);  
- Support for the rehabilitation of textile and clothing mills.   
• Delivery Mechanisms - Use of Existing Mechanisms : The preference was widely held for 
the use of existing mechanisms in the delivery of financial and technical assistance.  This 
position was itself based on the consistently he ld position by many developing countries for 
enhanced coordination within the development community in the delivery of financial and 
technical assistance, and the avoidance of the confusing prolifer ation of overlapping 
mechanisms.  There was a relu ctance for the creation of new international bureaucracies and a 
preference for the more effective use of exis ting institutions.  Bila teral donors and multilateral 
institutions considered that synergies should be built, with enhanced c oordination, around the 
Poverty Reduction Strategy Papers (PRSPs) or  national development plans, and the African 
Development Bank's Country Strategy Papers  (CSPs), which are derived from priorities 
reflected in the PRSPs.  Bilateral donors and mu ltilateral institutions were in support of the 
accelerated use of the Integrated Framework for Trade-Related Technical Assistance for 
LDCs, and the Joint Integrated Technical Assi stance Programme for African Countries (the 
JITAP).  On such a fast-track basis, eligible countries would have the IF (for LDCs) and the 
JITAP (for African countries) u sed as the mechanisms for mainstreaming  cotton-specific 
financial and technical assistance into the de velopment vehicles of their PRSPs or national 
development plans and Country Strategy Pape rs and for delivering such assistance.   
 
• Enhanced Coordination and Follow-up Arrangements : The specific issue of enhanced and 
focused coordination between bilateral donors and multilateral institutions was carefully 
considered, keeping in view the urgent necess ity to retain the momentum and follow-up on 
the identified areas of financial and technical assi stance after the Workshop.  It was felt that 
coordination would need to take account of 4 crucial factors: knowledge of the region; 
poverty reduction targets, jurisdictional competen ce of the subject matter; and, bilateral donor 
partner support.  As a result, there was broad support that the immediate follow-up process of coordination and implementation after the Work shop would be actively led by the World 
Bank, the African Development Bank, the IC AC, the FAO, bilateral donors including the 
United States and the European Commission, a nd one representative of the African cotton 
producing countries.   
 
- In support of these ends, it was felt that development agencies should be 
immediately involved in the implem entation of the outcomes of the 
Workshop.  To this end, the WTO S ecretariat will communicate the outcome 
of the Workshop to the Developmen t Assistance Committee of the OECD 
Secretariat – the institutional forum for development agencies – and to 
request their appropriate follow-up and provide information;  
- The WTO Secretariat would enhance the OECD/WTO database to reflect 
current projects, subsequent follow- up, and implementation results.   
85. It was noted that the implementation of both the broad and more specific outcomes would be 
work in progress.  The WTO Secretariat would repo rt on the outcome to the WTO membership.  A 
full report of this Workshop will be compiled and ci rculated, with an annex of presentations, to all 
participants.   WT/L/587 
Page 22 
  
 
IV. PROGRAMME
  
Background   
 
86. As part of its 2004 Technical Assistance Plan, the Secretariat of the World Trade 
Organization will organize an African Regional Wo rkshop on Cotton, in Cotonou, Benin.     
87. This African Regional Workshop on Cotton is be ing organized in response to the Sectoral 
Initiative on Cotton, proposed by Benin, Burkina F aso, Chad and Mali.  Consultations on the Cotton 
Initiative took place, prior to the WTO 5th Ministerial Conference and during the meeting at Cancún.  
In the consultations amongst the WTO membership , post-Cancún, the Cotton Initiative was identified 
as one of the four areas of work where WTO Members should concentrate to re-start the negotiations.  
Consultations are focused on two substantive areas, namely the Trade Elements of the Initiative and 
the Development Aspects.  While the substantive Trade Elements are for Members to address in the 
negotiations, the purpose of this Workshop is di fferent, but complementary.  The purpose is 
exclusively focused on the Development Aspects,  particularly the scope and opportunities for 
financial and technical assistance.  Such oppor tunities go beyond what the WTO on its own can 
deliver and which would involve coordination with bilateral donors an d relevant multilateral 
institutions.   
88. It is also expected that this regional workshop will contribute to a more focused 
understanding of some of the policy issues underpinni ng the Cotton Initiative; enhancing clarity in the 
opportunities for financial and technical assistan ce and the institutional coordination of such 
assistance.  Furthermore, the workshop will encourag e confidence-building; and, enable participants 
to build on their synergies to compleme nt the trade aspects of the Initiative.   
89. Therefore, the workshop will specifically focus, inter alia , on the following:  
(i) Importance of cotton production and trade for African countries;  
(ii) Factors in African cotton production and trade;  
(iii) Cotton-Specific Forms of Financial and Technical Assistance;  
(iv) Roles and Contributions of Multilateral Institutions;  
(v) Roles and Contributions of Bilateral Donors;  
(vi) Institutional Coordination of Financ ial and Technical Assistance.    WT/L/587 
 Page 23 
  
Participation   
 90. The thirty African countries producers/exporters of cotton
36 will be invited to participate at 
the level of senior officials.  The four WTO QUAD Members (Canada, EC, Japan and the United States) and China will also be invited to participat e.  The Secretariat will invite and will be working 
very closely with relevant multilateral institutions, whose roles and contributions will be vital in any 
final package on financial and technical assistance as pa rt of the overall solution.  These organizations 
are the African Development Ba nk (ADB), the Economic Community of West African States 
(ECOWAS), the International Monetary Fund (IMF), the International Trade Centre (ITC), the United 
Nations Food and Agriculture Organization (FAO), the New Partnership for Africa's Development 
(NEPAD), the International Cotton Advisory Comm ittee (ICAC), the Organization for Economic Co-
operation and Development (OECD), the United Nations Industrial Development Organization 
(UNIDO), the United Nations Conference on Tr ade and Development (UNCTAD), the United 
Nations Development Programme (UNDP), the West African Development Bank (WADB), the West 
African Economic and Monetary Union (WAEMU) and the World Bank.   
91. The African Union (AU), the United Nations Economic Commission for Africa (ECA), the 
ACP Secretariat and the Intergovernmental Franc ophone Agency (AIF) will also be invited to 
participate.   
Outcome   
 
92. The outcome of the Workshop will be a simple Concluding Summary by the WTO 
Secretariat, on its own responsibility, of issues, ro les, and contributions to be identified at the 
Workshop by invited participants with an appropriate report to the membership.   
 
 
  
                                                     
 
36 Angola, Benin, Burkina Faso, Cameroon, Central African Rep., Chad, Congo (Dem. Rep. of), Côte d'Ivoire, 
Egypt, Ethiopia, Ghana, Guinea, Kenya, Madagascar, Malawi, Mali, Morocco, Mozambique, Niger, Nigeria, 
Senegal, Somalia, South Africa, Sudan, Tanzania, Togo, Tunisia, Uganda, Zambia, Zimbabwe. 
 WT/L/587 
Page 24 
  
 Day I – Tuesday, 23 March 2004
 
 
 
 
OPENING CEREMONY 
 
08:45 - 09:15  
Opening Statement by WTO Director-General, Dr. Supachai 
Panitchpakdi 
 Opening Statement by Representative of Host Country : (Minister 
for Industry, Commerce and Employment Promotion) 
 
09:15 – 09:45  
Coffee Break – Director-General meets with participants   
  
 
SESSION I: FACTORS IN AFRICAN COTTON PRODUCTION AND TRADE  
 
Chairman : Mr. Uri Dadush, Director, Trade Dept., World Bank 
 
 
• At this session, presentations will detail fact s on cotton production, consumption and trade 
trends in the 30 African countries, in the past and future prospects.  
• The Workshop will examine factors affecti ng quality, efficiency and productivity in 
upstream and downstream production, such as infrast ructure, transportation, marketing, risk 
management tools, farm credit/grants, producer associations, etc. 
• Presentations will review data, including factor s affecting intra and extra African cotton 
trade.  The Session will point to objective factors in inter-play in cotton price trends such as 
competing substitutes, the state of the globa l economy and government intervention, as they 
relate to the performance of African countries.   
• Multilateral institutions and bilateral donor s will discuss approaches and issues for 
preparing cotton-sector diagnostic studies (where they do not exist) in support of cotton programmes for African countries.  Areas/issu es for collaborative policy-relevant research 
also in support of cotton progra mmes in Africa will be identified. 
 
 
09:45 – 11:30  
Importance of Cotton Produc tion and Trade For African 
Countries and Cotton Price Trends : African Development Bank 
(ADB), World Bank, IMF, and FAO, ICAC1   
 
11:30 – 12:00 Coffee Break  
12:00 – 13.15 Exchange of Views 
13:15 – 14:15 Lunch 
 
* Registration of participants will start from 16h00 on 22 March 2004 in the lobby of the Marina 
Hotel and will be completed be tween 7h30 to 8h30 before the opening ceremony on 23 March 2004. 
 
1Fifteen-minute presentations, ba sed on circulated papers. WT/L/587 
 Page 25 
   
 
SESSION II: COTTON-SPECIFIC TYPES & SCOPE FOR FINANCIAL AND 
TECHNICAL ASSISTANCE  
 
Chairman
: African Development Bank 
 
• At this session, participants will consider pr esentations to be made by several African 
countries on the forms of financial and techni cal assistance envisaged to support domestic 
efforts and programmes in individual countri es.  Several which have been mentioned 
include, inter alia , support for production infrastruct ure; improving competitiveness and 
quality control; strengthening producer orga nizations; improving cotton quality through 
support for improved standards; enhanci ng cotton support services by strengthening 
financial services; market support services th rough export promotion; and, support for 
value-added cotton through support for "downstr eam" products in appare ls and garments.  
Commodity price risk management through market-based instruments.    
• Presentations will be followed by an excha nge of views amongst participants.   
14:30 – 15:30  Cotton-Specific Types & Scope for Financial and Technical 
Assistance :  Presentations by Benin, Bu rkina Faso, Egypt and World 
Bank  
15.30 – 16:15 Exchange of views  
16:15 – 16:30 Coffee Break  
 
 
SESSION III: ROLES AND CONTRIBUTIONS OF MULTILATERAL INSTITUTIONS 
 
Chairman :  H.E. Ambassador Henrik Iversen, Perm. Rep. of De nmark in Geneva 
 
• At this session, presentations will be made by invited participating multilateral institutions 
on their roles and concrete opportunities for financial and technical assistance.   
• At this session also, the Integrated Framew ork for Technical Assistance to the Least-
Developed Countries (IF) will be discussed as a mechanism, amongst others, for cotton-
specific financial and technical assistance with in countries' development plans or their 
Poverty Reduction Strategy Papers (PRSPs).   
16:30 – 18:00 Roles and Contributions of Multilateral Institutions : Presentations 
by the African Development Bank, World Bank, IMF, ITC, UNCTAD, 
UNDP,37 FAO and UNIDO   
18:00 – 19:00 Exchange of views  
 
                                                      
37 Head of the United Nations Development Group. WT/L/587 
Page 26 
  
Day II – Wednesday, 24 March 2004
 
  
 
SESSION IV: ROLES AND CONTRIBUTIONS OF BILATERAL DONORS   
 
Chairman
: H.E. Ambassador Henrik Iversen, Pe rm. Rep. of Denmark in Geneva 
 
 
• At this session, bilateral donors will make pr esentations to provide indications of any 
concrete opportunities that exist for bilate ral financial and technical assistance.   
• Following the contributions of b ilateral donors, participants w ill engage in an exchange of 
views on the question of "institutional coordinatio n of financial and technical assistance".   
  
08:45 – 09:45  Roles and Contributions of Bilateral Donors : Presentations by 
Canada, EC, Japan, United States, and China  
09:45 – 10:45 Exchange of views  
10:45 – 11:15 Coffee Break 
11:15 – 12:15 Institutional Coordination of Financial and Technical Assistance:  
- Exchange of Views     
12:15 – 14:00 Lunch 
 
 
 
SESSION V: CONCLUDING SESSION  
 
Chairman :  WTO Secretariat  
 
14:00 – 15:00 Summary Conclusion of Workshop  
At this concluding session, the WTO Secretariat, on the Secretariat's 
responsibility, will provide a summary of issues discussed, roles, 
contributions and opportunities identif ied for financial and technical 
assistance by participants.   
 
 
  Note
: Any enquiries regarding this programme in pa rticular or the Regional Workshop in general 
should be addressed to Mr. Chiedu Osakwe, Director, WTO Textiles Division.  Telephone : (41-22) 
739 52 50; Fax: (41-22) 739 56 90; e-mail : chiedu.osakwe@wto.org  
   WT/L/587 
 Page 27 
  
V. ANNEXED PRESENTATIONS 
 
ANNEX 1 
 
OPENING REMARKS BY DR. SUPACHAI PANITCHPAKDI  
WTO DIRECTOR-GENERAL  
  
Minister Akplogan,   Excellencies,   Representatives of multilateral institutions,  
 
Distinguished participants,     Mes amis, Mesdames et Messieurs, je vous  souhaite la bienvenue à Cotonou.   
 
 I would like to warmly welcome you all to th is WTO Secretariat-organized African Regional 
Workshop on Cotton.  To begin with, on all ou r behalf, I would like to express our sincere 
appreciation to our gracious hosts, the Government an d People of the Republic of Benin.  I would ask 
Minister Akplogan to convey to the President, to the Government and the People of Benin, the appreciation of all the participants at this Works hop for the generous hospitalit y we have received and 
for the facilities that have been put at our disposal  for this Workshop.   I very much welcome this 
opportunity to be here with you in West Africa.  This is the beginning of a very important week for 
me in this region.  From Cotonou, I will  be travelling to Abuja, Nigeria to meet with the Trade Ministers of the Economic Community of West Africa (ECOWAS) on the broader subject of what we need to do, in concert, to restore momentum in the Doha Round.      
 
 A sense of history is always vital before unde rtaking any task.  As we meet here, over the 
next two days, to focus on the subject of cotton, we  need to remember and appreciate the historical 
contributions of this region to the world.  The modern state of Benin was preceded by the ancient 
kingdom and empire of Dahomey, a wea lthy and flourishing civilization.   
 
 It was here in West Africa, centuries ago, that we had the flourishing empires and civilizations not only of Dahomey, but also of Ghan a, Songhai, Mali, and several in modern Nigeria, 
including Oyo, Edo, the Ibos, and the Hausa-Fula ni Caliphate.  These civilizations, as you all know, 
were well integrated into a regional economy that st retched across the Sahara desert into North Africa 
and had links beyond.   The borders separating countries in the region are relatively recent.  I 
welcome the measures that the ECOWAS countries as a group, and the West African Economic and 
Monetary Union (WAEMU) are taking to liberalize the movement of goods, services and people within the region.  These are essential measures for s timulating growth, wealth and prosperity in West 
Africa.  With this sense of history combined with curre nt efforts, I believe that the task of participants, 
here at this Workshop, in Cotonou,  is to assist these countries to stre ngthen their capacities to trade.   
 
 Before, we begin with the actual Workshop, I would like to underline 6 key points to assist 
and define our work.     First, although this technical assistance wo rkshop has been organized in response to the 
request by the 4 Least-Developed African countries of Benin, Burkina Faso, Chad and Mali, upon the 
advice of the WTO African Group in Geneva we ha ve also invited 26 other African countries for 
whom cotton also plays an important role.  Post-C ancun there has been a greater realization of the 
importance of the cotton sector to the growth and po verty reduction efforts of these African countries.  WT/L/587 
Page 28 
  I thank all of you for contributing fully and concrete ly to the organization of this Workshop, and for 
providing positive indications of your commitment to a meaningful outcome.  This is an African 
priority that deserves our support and I am grateful  to you all for responding to the challenge.     
 
 Secondly, let me recall that this Workshop  is exclusively focused on the development 
assistance component of the Cotton Initiative, as reflect ed in the programme before you.  I would thus 
urge participants to focus on seeking concrete out comes on financial and technical assistance.  I hope 
that by the end of this workshop we will have ach ieved at least two objectives: one, greater clarity on 
existing cotton-specific financial and technical  assistance by bilateral donors and multilateral 
institutions; and two, identification of  additional value-added opportunities for cotton, particularly 
through enhanced coordination am ongst multilateral institutions and bilateral donors.  I urge all 
participants to fully dedicate themselves to this purpose.   
 As you all know, there is an equally impor tant trade policy component to the Cotton 
Initiative.  However, in keeping with the express ed wish of the proponent countries and the WTO 
African Group in Geneva, the trade policy dime nsion is a matter for the entirety of the WTO 
membership in the negotiations.  I share the vi ew expressed by the majority of our membership, 
including many African countries, that progress on th e trade policy aspects can best be made within 
the framework of the broader agriculture negotiations .  In taking this position, I also note that many 
consider that such progress should be made within  the agriculture negotiations, while preserving the 
focus on cotton.  Against this background, I would again urge participants to focus on the development assistance component of the Cotton Initia tive at this Workshop, and to work collectively 
for a meaningful, substantive and positive outcome.     Thirdly, this Workshop is important because it brings together the trade and development 
communities.  It is therefore striking that in the composition of the delegations of both the 18 
multilateral institutions and the QUAD plus China, there are in each delegation representatives from 
trade and development departments.  I find this both welcome and  encouraging.  A salutary lesson 
that the international community learnt, post-Sea ttle, was the importance of establishing a systematic, 
constructive and on-going partne rship between the trade and development communities.  The 
recognition of this partnership contributed to the success of the Doha Ministerial Conference and the 
establishment of the Doha Development Agenda (DDA).   This is also why, the WTO Secretariat, in 
constructing its programmes for trade-related techni cal assistance, has pursued the objective of having 
trade reflected within the wider development plan s and poverty reduction strategies of our developing 
country Members.  
 
 Fourthly, recent experience shows that th e chances of managing and resolving multilateral 
problems are significantly improved when there is effective co-operation between the Secretariats of multilateral institutions and their membership - par ticularly the major countries.  This is why I 
welcome the presence here of the representatives of th e Secretariats of 18 multilateral institutions and 
the representatives of Canada, the European Commi ssion, Japan, the United States and China.  In 
working together for a common purpose, multilatera l institutions are strengthened.  Multilateralism 
and multilateral institutions still hold our best ch ances for international co-operation, effective 
governance and management of the biggest challenges that confront the international community.  I 
am in touch with the Ministers from the countries re presented here and throughout this entire week I 
will be intensifying my contacts in West Africa.   I ha ve also spoken to many, if not all, of the Agency 
Heads of the multilateral institutions represented here . I would urge you to use the opportunity of this 
workshop to intensify your contacts with each other a nd to find ways to work even more effectively 
together.  WT/L/587 
 Page 29 
   Fifthly, experience shows that faster and quicker results can sometimes be obtained by 
working within and strengthening existing mechanisms .  This does not mean that we should not seek 
to be creative and find new ways of doing things. But that, in doing so, we should also draw on the 
abundant lessons of the past, building on what works and avoiding what does not.  Several 
instruments are already available and in use.  It  is evident that bilateral donors and multilateral 
institutions have coalesced around the development ve hicle of the Poverty Reduction Strategy Papers 
(PRSPs) and also around the trade capacity building instruments of the Integrated Framework for 
Trade-Related Technical Assistance for Least-Devel oped Countries (IF), and the Joint Integrated 
Technical Assistance Programme (J ITAP) for African countries.  We  need to work within these 
established instruments.  If we do so, I believe that pr ogress will be faster and the dividends greater.     
  Sixthly, progress in trade negotiations and development assistance usually comes through 
careful, consistent and cumulative effort, based on good will, patience and persistence. A spirit of 
pragmatism and flexibility will be necessary for us  all to achieve our common objectives.  This 
Workshop, here in Cotonou,  is a clear indica tion of good will and resolve to produce a positive and 
meaningful outcome on the development assistance component of the Sectoral Initiative on Cotton.  I am confident that we can make it work.    
 In closing, I want to say how pleased I am to see you all, including many of my personal 
friends.  I acknowledge with appreciation the pr esence of the representatives of the 18 multilateral 
institutions who have responded to the call of the trading community and for the contributions you 
have made to our preparations  for this Workshop.     
  I would also like to sincerely thank our major trading countries represented here by Canada, 
the European Commission, Japan, th e United States and China, for their participation at this 
Workshop.  Your presence and participation ar e essential in the conf idence-building process 
underway in the WTO.     Not least, I am happy to see my friends, the African Ambassadors in Geneva.  Your presence 
here today, will assist us in ensuring continuity so that the understandings and the outcomes we reach 
here, in Cotonou, can  be carried forward and positiv ely contribute to the Doha Development Agenda.   
  I thank you all, and I now have the honour to  declare open "The African Regional Workshop 
on Cotton".   
 
 
 
 
 
 
 
 
 
 
 WT/L/587 
Page 30 
  
ANNEX 2 
 
OPENING ADDRESS BY H.E. MR. FATIOU AKPLOGAN  
MINISTER OF INDUSTRY, TRADE AND 
EMPLOYMENT PROMOTION  
 
 
 Mr Director-General of the World Trade Organization, distinguished representatives of the international organizations, Ambassadors, Minist ers, experts and guests, ladies and gentlemen, 
 
 On behalf of the President of the Republic and Head of State and Government of Benin, 
General Mathieu Kerekou, on behalf of his Government, and inde ed on my own behalf, I would like  
to extend a warm welcome to the Director-Gener al of the WTO and the delegation accompanying 
him, as well as to you, the representatives of all of the countries participating in the Regional Workshop on Cotton. 
 
 I also take this opportunity to say what an honour it is for my country to be able to officiate at 
this regional workshop on an issue that is of concer n to us all, namely the survival of the African 
cotton sector in a trading system in which it is at a disadvantage.   Honourable guests, ladies and gentlemen, 
 
 The very fact that we are holding this regi onal workshop here in Cotonou, on 23, 24 and 
25 March 2004, reflects our common determinati on to seek ways and means to alleviate the 
distortions caused by subsidies on the internati onal cotton market and which are jeopardizing all 
efforts to stimulate the development of the cotton sect or, while at the same time identifying strategies 
to encourage local processing and the promotion of cotton. 
  Allow me in this connection to extend my th anks once again to His Excellency Dr Supachai 
Panitchpakdi for doing us the honour of chairing the opening ceremony of our workshop in person. 
  It is clear to any well-informed observer today that the African continent has been 
considerably marginalized and is having enormous  difficulty integrating into the new multilateral 
trading system marked by the increasing market ope nness that goes with the globalization of trade and 
the international economy.   Nor is it a secret to anyone that Africa's share in world trade stands at less than 1 per cent, in 
spite of the efforts made in most of the countri es concerned to adapt to the objectives of trade 
liberalization as defined by the WTO.   In some of the African cotton producing c ountries, the subsidies granted by certain WTO 
developed-country Members have reduced these effo rts to naught.  The distortions caused by these 
subsidies are seriously jeopardizing the competitiv eness of cotton and the structure of the economies 
of the cotton producing countries.  This has destab ilized the income of the cotton producers and the 
export revenue of the States concerned.  These losses, in  their turn, threaten to cancel any benefits that 
might be expected from the implementation of poverty reduction policies and strategies. 
  It is worth recalling, ladies and gentlemen, that  cotton plays a major role in the economies of 
the cotton producing countries.  Alone, it accounts for 30 per cent of total e xport revenue (all products 
included) and close to 70 per cent of export revenue from agricultural products.  It is also the main 
export product in respect of which our countries ha ve a definite comparative advantage.  It is 
produced at highly competitive costs and universally  recognized throughout the world as being of 
very good quality. 
  WT/L/587 
 Page 31 
   However, for about five years now, the cotton sector has been facing serious problems as a result of the differences of treatment between devel oping country producers, particularly in the least-
developed countries, and developed country producers.  This difference of treatment at the production 
level is distorting the free play of competition, ther eby jeopardizing the future of a sector on which the 
economic and social balance of our countries depend, and undermining the rules of equity within the 
WTO.  
 Ladies and gentlemen, 
  Unless urgent and substantial steps are taken, the cotton sector may very well disappear.   Indeed, it is because this sector is so vital to  the survival of our countries' already fragile 
economies that it was decided to submit the issue of  the sectoral initiative in favour of cotton to the 
competent WTO bodies and include it on the agenda of the 5
th WTO Ministerial Conference in 
Cancún, Mexico.  This was a joint initiative by four of the poorest countries of the world.  These four 
countries, Benin, Burkina Faso, Mali and Chad, decide d to resort to the appr opriate mechanisms of 
the multilateral trade negotiation system with a view to finding an urgent and equitable solution to the 
problems underlying the dwindling proceeds from cotton exports. 
 
 At Cancún, the fruit did not fulfil the promise of the blossom.  Indeed, following the considerable hopes raised by the inclusi on of the issue on the agenda of the 5
th Ministerial 
Conference, the outcome was a disappointment in spite of the sympathy and full support of the international community for this just and noble cause.  
 Incidentally, all of the ACP countries are s till convinced that the WTO multilateral trading 
system remains the best protection against arbitrarin ess.  As such, the system should be the key to a 
proper sharing of the benefits of trade liberaliza tion to which the low-income countries have also 
committed themselves, sometimes, indeed ofte n, at the cost of enormous sacrifices. 
 
 Thus, as a matter of good economic governance, na mely respecting the rules and regulations 
of the WTO, I would like to express my hope that  this workshop will serve  as a framework for the 
achievement of an equitable and transparent intern ational market that is capable of ensuring the 
sustainability of the cotton sector in the African cotton-producing countries.  
 In this respect, I would like once again to dr aw the attention of the international community 
and the development partners to the need for urgent  action to deal with the trade distortions on the 
international cotton markets and support the establis hment of a transitional cotton sector support fund 
in favour of the cotton-producing least-developed co untries.  This fund should remain in place until 
subsidies relating to the production and export of  cotton have been completely eliminated. 
 
 In addition to this support fund, there is also  a need to support the development of African 
cotton by assisting with local processing.   Mr Director-General, ladies and gentlemen,  
 I am sure you will all agree with me that the challenge of promoting the competitiveness of 
the cotton sector is vital to the success of development and povert y reduction policies. 
  You will also agree, I am sure, that the sector al initiative in favour of cotton represents an 
extraordinary opportunity to give concrete form to  the notion of a development round that has been 
associated with the Doha work programme. 
 
 A great majority of WTO Members will never really be able to truly benefit from liberalization as long as the conditions on which th e development of their strategic sectors depend 
have not been realized. WT/L/587 
Page 32 
    The Government of Benin therefore hopes th at the agencies represented here will join 
together with the countries and the WTO to build, here in Cotonou, through the cotton sector support 
fund that we would like to see created, the foundations of a structure that would truly contribute to the development of the cotton sector and help to rest ore the confidence of our communities in the WTO. 
  To that end, I sincerely hope that this  workshop and the recommendations it produces will 
mark the beginning of true consultations on the packag e of measures to be taken to ensure the survival 
of several million cotton producers and to promot e the processing of the cotton as a guarantee of 
substantial value added for the economies of our countries.   With these words of hope, I declare open on th is day, Tuesday, 23 March 2004, the African 
Regional Workshop on Cotton. 
 
 Thank you for your kind attention.   WT/L/587 
 Page 33 
  
ANNEX 3 
 
STATEMENT BY THE CANADIAN DELEGATION 
 
Mrs. Lorraine Bélisle 
 
Director of the Programme Support Unit, Benin 
 
  Ladies and Gentlemen, 
 
 I am pleased to attend this important mee ting which ties trade issues closely in with 
development ones, in particular with regard to West  Africa.  Such issues should not be considered to 
be at variance with each other, rather as complement ary forces which allow a country to reach its full 
potential. 
 
 The marginalization of Africa in the world econom y is of great concern to us.  Africa is the 
continent where poverty is most rife.  It is also th e most marginalized continent in the world economy.  
Now, investment, production and trad e are at the very root of econom ic growth and development.  
The New Partnership for Africa’s Development (NEP AD) has highlighted these elements, along with 
the importance of countries taking responsibility fo r their own development.  Canada supported 
NEPAD by making it a key element of the G8 talks in 2002 during their meeting in Canada. 
  African development is of particular importa nce to Canada.  Africa represents an increasingly 
large proportion of Canada's devel opment activities.  We have undertaken to allocate 50 per cent of 
the new budget of the Canadian International Development Agency (CIDA)  to Africa.  Canada is 
gearing its aid programme for Africa towards alle viating poverty and promoting peace and security.  
Our resources are earmarked for priority areas, such  as HIV/AIDS and Education for All.  Closer to 
our present concerns is our involvement in environm ental and agricultural projects, such as the Niger 
Basin Initiative support project, which brings together  nine countries of the Region and spans a period 
of 10 to 20 years.  Its main objective is the integrat ed management of the waters of the Niger River;  
other aims include natural resource development a nd the possibility of raising the income of rural 
populations. 
  Agriculture, especially cotton farming, is of particular significance to West Africa.  The livelihoods of an estimated ten million people depend directly on this crop.  Several African countries 
generate over half of their export earnings from cotton. 
 
 We run a project in West Africa to support sk ills development for its agricultural leaders, 
which enables agricultural producers to gain a better understanding of the issues at stake for them in, 
and be better represented at, WTO trade negotiations.  It also stimulates dialogue between southern 
and northern producers with a view to their fo rging alliances geared towards fairer trade. 
 
 Through our backing of the Permanent Inte r-State Committee on Drought Control in the 
Sahel (CILSS), we also help Sahe l countries to coordinate their nati onal and regional policies better in 
order to guarantee food safety and improved natu ral resource management and to reduce the 
vulnerability of their popula tions to the disastrous effects of climatic vagaries. 
 
 Canada is contributing to a World Bank project  here in Benin to facilitate the transition 
following the privatization of cotton producers.  Similarly, our support for two other World Bank 
structural adjustment credit projects in Chad and Mali aims to restructure the cotton sector in these 
two countries.  In a wider perspective, we have ot her projects in Mali and Burkina Faso which enable 
agricultural producers to play a more  active role in the cereal and or ganic food industries in order to 
obtain a fair price for their products and boost their production capacity.  Canada also backs WT/L/587 
Page 34 
  multilateral organizations, such as the OMA, UNCT AD and ITC, which are more directly involved 
with agriculture and cotton. 
 
 Canada has developed a new strategy for maximi zing the effectiveness of its aid.  It therefore 
endeavours to reduce the geographical dispersion of the aid in order to increase the impact of its 
action.  Recognizing that a country must take responsibility for its own de velopment, Canada is 
gradually withdrawing from project support a nd adopting a programme and budgetary support 
approach.  This reflects our concern to incorpor ate all aspects of a sector so as to secure lasting 
development results.  We consider that devel opment issues should be tackled from a multi-sectoral 
perspective, not merely from the point of view of a single sector.   National and international policy coherence is a crucial element which determines aid 
effectiveness.  We must strive to sustain dial ogue between the major players in areas relating to 
development, trade, agricultural subsidies and access to medicines, as well as to establish peace and 
security.  These issues all have an impact on potential development results.   Recognition of these processes led to the creation of the Integrated Framework for Trade-Related Technical Assistance to Least-Dev eloped Countries (IF) and the Joint Integrated 
Technical Assistance Programme for African Countri es (JITAP) which help countries to identify and 
overcome obstacles to profitable trade for all parti es.  Canada is an active member and one of the 
main donors of these two programmes.  Canada h as played a leading role in the Integrated 
Framework, in terms of both fina ncial contributions and its endea vours to revive this initiative and 
ensure that the efforts of multilateral and bilatera l donors are coordinated and prove as effective as 
possible with regard to the problems that a country  may confront.  The capacity-building in trade 
issues made possible by these initiatives is part and pa rcel of a sustainable development strategy.  By 
backing these initiatives, we hope to be able to he lp countries to draw up development plans covering 
all aspects of development.   Aid to farmers needs to be sustained by an efficient economic system.  The international 
trading system should take the impact of subsidies on farmers into greater consideration.  As far as 
cotton is concerned, subsidies to farmers directly a ffect the price of cotton and market access.  Thus, 
even if productivity is high, it is still difficult for A frican countries to generate  income to support their 
rural sector.  
 In order to prevent the marginalization of Africa  and ensure that it is capable of generating the 
economic growth essential to sustainable developmen t, we advocate an undistorted trading system.  
Canada has already liberalized access to its markets for all least-developed countries.  Ever since the 
Cancún Ministerial Conference, we have been work ing to amend our legislation in order to give 
developing countries access at affordable prices to the medicines required to counter infectious 
diseases.  We would encourage our colleagues to envisage a long-term solution in the case of concern 
to us and to establish guidelines for working towards freeing the trading system from distortions.  Rest 
assured that each and every one of you may count on our support in your efforts to devise an appropriate individual solution.   
 
   WT/L/587 
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ANNEX 4 
 
STATEMENT BY THE EUROPEAN COMMUNITIES DELEGATION 
 
 
 
Mr. Chairman,  
The Commission was asked to provide indi cations of any concrete opportunities for 
assistance to cotton. Our proposal is on the table and we are looking forward to the opportunity of 
discussing it in greater detail with you. 
 
What kind of assistance? 
 
African countries may want to deal with both competitiveness and vulnerability of the 
commodity sectors; with both technical and market-r elated issues; with both local development and 
regional integration. We notice increasing demands fo r assistance at the macro-level to mitigate the 
effects of commodity shocks for the budget and the ba lance of payment. In addition, we share your 
beliefs that there has to be fairer trading cond itions, including market access for cotton and products 
to all major markets, removal of export subsid ies and a reduction in trade distorting subsidies. 
 
We in the EU are ready to wo rk along these lines. Next month, the EU will conclude on the 
Action Plan on Agricultural Commodities whic h the European Commission has submitted in 
February, of which a copy has been circulated to  you. This means that the Commission and the 15 
(soon 25) EU countries will adopt a common approach  towards agricultural commodity development. 
It defines a new framework of collaboration with developing countries on this key issue. 
 
Now let's turn more specifically to cotton. 
 
Our assistance to the African cotton sector 
 
As an important application of the EU Ac tion Plan, the Commission has proposed an EU-
Africa partnership on cotton sector development. Th e proposals highlighted be low come on top of the 
assistance provided by EU Member States.  
Let me highlight the key feature's of this proposal: 
 
Our cotton proposal deals with both the trad e and development issues. We think that 
development activities should not be dissociated fro m the trade aspects. Lack of market access to 
some major markets, export subsidies for cotton an d other trade distorting policies of major producers 
and exporters significantly affect the development of  the cotton sectors in Africa, including the impact 
of development aid to these sectors. There is no doubt that aid to the cotton sector can not be a substitute for reaching a satisfactory outcome for co tton in the framework of the trade negotiations 
which we are fully committed to support in Geneva. 
 
As regards the development issues, the cotton proposal comes with a broad framework for 
cooperation. I am glad that during this Workshop we  have heard many ideas that are in line with our 
proposal. The EU's strategic priorities shared by the EC and the Member States include: 
 WT/L/587 
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  1. Supporting national commodity chain strategies or cotton sector plans
. Coherence in 
development assistance for the cotton sector is para mount, national strategies provide the framework 
for such coherence and for coordina tion. Governments need to look at all aspects: technical, financial, 
regulatory, as well as to competition, value addition, marketing, trade and investments, infrastructure. 
These plans should be part of national development prio rities, and be reflected in particular in poverty 
reduction strategies. It is in the design of th ese national cotton strategies that issues of sector 
governance, respective role of government and ot her stakeholders as well as the necessary policy 
reforms should be addressed. It is also the design and implementation of such strategies that will 
provide a framework for donor coordination.  2. As a response to declining long term prices, i nvestments are needed to consolidate or enhance 
the competitiveness of African cotton . Technological and management improvements are necessary at 
all stages of the cotton production, ginning and marketing chain to reduce costs and improve the 
efficiency of the African cotton sector, in conformity with local production systems. 
 3. The African cotton sector must envisage moving up the value chain
. This may imply 
establishing closer linkages with downstream enterp rises in foreign export markets, as well as 
exploring specific niche markets such as those for organic or fair trad e cotton. In this respect, the EC 
is already supporting an assessment of processi ng opportunities in a regional context through our 
private sector support programme.  4. African countries need to reduce their vulnerability
.  They should explore the use of market-
based instruments to cushion the effects of price shocks for the governments' budget, the cotton sector 
and cotton farmers. The EU could consider co-financing premiums of market-based risk instruments. 
Another approach often raised to  address vulnerability is to advocat e for horizontal diversification. 
We do not believe that in cotton areas there are at the moment some practicable opportunities for 
farmers to diversify.  5. At the global level there is a need to develop a Universal Cotton Classification System
. As 
this would also largely benefit other cotton produ cers, it could be considered a joint donor activity 
which the EU would support.  
Some EU instruments for the assistance 
 
The EC and the Member States have a long term  commitment to cotton sector development in 
Africa. The implementation of the EU Africa Partnership proposes:  
(i) To re-focus national allocations in the PRSPs framework to address constraints faced 
by cotton producers . The EC has agreed Country Support Strategies with ACP 
countries which identify focal sectors of in tervention.  350 million Euros have been 
allocated to RD and agriculture in 7 cott on producing African countries. Looking at 
the current crisis we could argue why only  7 countries have focused on agriculture. 
Our African partners have an opportunity under the Mid-Term Review of the EC 
country programmes to re-direct resources from one of the focal sectors to cotton 
development. Another easier alternative is to re-direct resources in one of the focal 
sectors towards activities supporting cotton production, e.g. resources attributed to 
transport sector could be easily prioritised for cotton growing areas. 
 
(ii) Compensatory finance systems for unf oreseen circumstances need also to be 
improved . The Commission has an instrument to provide budgetary support to 
countries that experience a shortfall in expor t earnings. It has not worked effectively 
as the criteria to access the facility resulted to  be too strict. We have tabled a proposal 
which is in front of the MS to relax the cr iteria for this instrument. This will certainly 
benefit countries which may experience shortf alls in export earnings in the coming 
years. Although countries cannot retroac tively benefit from FLEX for the 2000 - 2002  WT/L/587 
 Page 37 
  
period, they may propose, under the MTR, to receive some FLEX resources if they had to borrow externally in order to meet their budgetary demand. 
 
 (iii) Specific support via EPA
. Under our negotiations of Economic Partnership 
Agreements (EPA) we will explore with our African partners how we can make best 
use of the EPA process to support the cotton sector. There is nothing we can give more on market access since the EU has al ready fully opened its markets for cotton 
and textiles for the ACP. But we could discuss under EPAs regional integration, co-
operation and trade related rules including investment and trade facilitation which are essential for the future of the cotton sector . Using the mechanism of the "regional 
preparatory task forces" which will be  established in connection with EPA 
negotiations, it is also foreseen to support this process through development co-operation activities funded, for example, out of the regional EDF allocations. 
 
(iv) New allocation from Intra-ACP to commodities plus cotton
:  There are additional 
resources available in the Intra-ACP envelope. In other words, not for national nor for regional one. If requested by the ACP Counc il of Ministers in May, part of these 
resources could be allocated to commoditie s in general and co tton in particular. 
Under these funds, African countries could call in the specific expertise from the 
international institutions in support to  their national commodity development 
strategies. The intended multi-donor cooperati on with international organisations has 
important leverage effect, we expect that it will attract other donors to funds to join in 
this type of administrative arrangements. 
 
 On cotton, we have encouraged two internati onal organisations to take a leading role in 
support of national efforts:  that is, the FAO and the World Bank.   • We have encouraged FAO to formulate an EU-supported multi-donor cotton 
programme, in consultations with othe r institutions, African partners and 
stakeholders. 
  • From the World Bank, we expect a proposal on a multi-donor cotton risk 
management, as part of the Commodity Risk Management initiative.  
 Next steps in the international consultations 
 
Some of the key donors in supporting the deve lopment of the cotton sector are the Member 
States who are not here today. We need to jointl y operationalise the proposed EU-African partnership 
as soon as the EC will have obtained the formal  agreement from the MS in the EU Council. 
 
For this the EU will invite shortly the cott on producing African ACP countries for a meeting 
in Paris during the second week of June (17 to 18) for a EU-Africa Cotton Forum where we would 
like to discuss with you our propo sals and look together in greater detail into opportunities for EU 
assistance.  
Mr. Chairman, thank you for having given us this opportunity to illustrate the EU strategy for 
cotton support and thank you all for your attention. 
 
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ANNEX 5 
 
STATEMENT BY THE JAPANESE DELEGATION 
 
 
JAPAN’S SUPPORT FOR AFRICA - SU PPORTING AFRICA’S DEVELOPMENT 
 IN THE 21ST CENTURY 
 
  In 1993, Japan organized “Tokyo Interna tional Conference for African Development” 
(TICAD) with the United Nations and GCA(NGO). The Conference ushered in a continuing process of support for Africa and consensus-building arou nd African development priorities. Although it was 
not a summit meeting nor a pledging conference, so me countries were represented by the heads of 
state, including President Compaore of Burkina Faso and President Sogro of Benin.    In 1998, TICAD II was held at Tokyo. The primary emphasis was put on poverty reduction and the integration of Africa into the global econom y. More than 10 heads of state and government 
came to Tokyo to join the discussion, including Pr esident Compaore of Burkina Faso, President 
Kerekou of Benin and President Konare of Mali. At the end of the Conference, the Tokyo Agenda for 
Action was taken by consensus. Thus, the Ownership  and Partnership were confirmed as fundamental 
concept for African development.      In 2000, taking advantage of the presidency of G8 , Japan invited some African leaders to 
Okinawa at the occasion of G8 Summit Meeting. African  issue was then included in the agenda of G8 
as one of major subject. This has been followed by  following presidencies.  While such efforts of 
promoting action for African development, Japan t ook its own action for Africa. It was Africa that 
Japan’s Prime Minister Yoshiro Mori paid memorial visit at the start of 21st century, January 2001. In South Africa, he made a memorial speech in whic h he declared that “There will be no stability and 
prosperity in the world in the 21st century unless the problems of Africa are resolved”.  
  “Poverty reduction through economic growth” is one of three pilars of Japan’s basic policy 
for assistance to Africa. Needless to say, the agricultural development is one of most important issues 
for the economic development of African countries. Du ring TICAD III, held last autumn in Tokyo, in 
the various development areas, “agricultural devel opment” is confirmed as being of particular 
importance, and a call was made concerning the necessity for intensified African efforts and 
international community assistance in this area.  Of  late years, Japan has been faced with economic 
and financial difficulties which result that Japan’s ODA expenditure is obliged to be reduced. Even in 
such circumstances, at the occasion of TICAD III, held last autumn, Prime Minister Koizumi made a commitment of assistance totaling one billion dollars  over the next 5 years for areas such as health 
and medical care (including fight for HIV/AIDS),  education, water, food assistance and so on.  
  The amount of Japan’s ODA for Sub-Saharan A frica is now about 850 millions dollars a year. 
Our basic way of thinking in assistan ce to African countries is that at first any project should be based 
on the commitment of African “ownership”. Too ma ny needs, too little resources. We continue to 
fight for this reality. Japan will continue the assistance to African countries along these policies.  
  Japan’s assistance to the LDCs (least develope d countries) is mobilized to basic human needs 
area such as water supply, health and medical care , basic education, provisions, rural development 
and so on. For concrete example,  rehabilitation of road, water supply of rural area, development of 
well-water etc.. These projects surely made substan tial contributions to LDCs economic and social 
development, including cotton production. In Cotono u City, you can find a rain-drainage, an example 
of Japan’s grant assistance to Benin.    WT/L/587 
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   As far as the cotton production concerned, Japan has almost no experience nor any practical knowledge. So we have some difficulty on the techni cal cooperation of this ar ea. However, Japan has 
long experience as importer of cotton, and we may ha ve some room to consider on this aspect.  
Anyway, as to the cotton, I emphasize the fact th at duty-free, quota-free market access is assured in 
Japan. Japan’s import of African cotton is never-the- l ess declining and this fact tells us that the price 
is not the only one element for importers.    
 At TICAD III, expansion of pa rtnership is considered one of its conclusions. This includes to 
share lessons from the knowledge and experiences that  enabled Asian countries to achieve remarkable 
economic progress. And to establish cooperative netw orks between African and Asian countries in 
agriculture, capacity building, technological transf er, and trade and investment. Japan, taking into 
account of this, will organize with World Bank  “TICAD Asia-Africa Tr ade and Investment 
Conference” scheduled to be in November.       
    
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ANNEX 6 
 
STATEMENT BY THE US DELEGATION 
H.E. Ms Linnet F. Deily 
 
Ambassador 
 
Permanent Mission of the US to the WTO, Geneva 
 
  
Importance of Multilateral and Regional Organizations Working Together 
 
 This past December in Geneva, WTO General Council Chairman Perez del Castillo suggested 
that we proceed on the cotton issue on two tracks:  a trade-related track and a development-related track.  Recognizing that working on the development issues required a wider participation than simply 
the WTO, the idea for this workshop was conceived. 
 
 At this workshop, we are pleased that we have  been able to enter into a dialogue on a more 
focused process to address development-related cons traints facing your countries that keep them from 
raising incomes of cotton-related producers, alle viating poverty and gene rating economic growth. 
  In hearing the presentations yesterday, I was struck by the importance of the multilateral and 
regional organizations working together – a key to any solution we find.    
  Each of these multilateral and regional organiza tions has a special contribution it can make to 
the development aspects of cotton.  For example, multilateral organizations like the World Bank have 
completed assessments that pinpoint the reforms need ed in some countries.  Regional banks linked to 
WAEMU and CEMAC may be able to provide other forms of support like infrastructure projects.  
Just as clearly the bilateral donors need to fit our ow n efforts into this broader strategy - the key is 
working together.  I encourage all of these groups to increase the coherence of our programs as we 
move forward in this process.  
 To better enable these groups to  contribute, it is important th at they be working off of the 
same plan.  
• Thus, we urge your governments to coordi nate among Trade, Agriculture, and Finance 
Ministries and work to ensure the needs you have identified are included in your countries’ 
PRSPs.    
 
• We recognize that your countries have many need s.  We have heard many of you say cotton is 
a priority.  To reflect this policy choice of your government, we ask that you take the next step and make sure this is reflected in the PR SP process.  This way cotton is not lost in this 
pool of needs.  This will allow us, as members of the donor community, to respond to your requests in a timely, coherent fashion.  
 
 Focusing on cotton in your development plans is your first step to accessing the system for 
assistance.  At the end of the day, it will take the help of everyone – multilateral donors, bilateral 
donors, regional organizations, the private sector, ci vil society, and the recipient countries themselves 
– to come up with a sustainable solution to the problems we are all addressing in this workshop. 
  WT/L/587 
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Millennium Challenge Account 
  The other issue I wanted to briefly touch upon is a brand new U.S. assistance program over 
and above our current assistance called the Millennium Challenge Account (MCA).   In January, Congress authorized the Millennium Challenge Corporation (MCC) to administer the MCA and provided $1 billion in initial funding for FY04.  President Bush has pledged to increase 
funding for the MCA to $5 billion a year starting in FY06, roughly a 50% increase over current U.S. 
core development assistance.    The MCC is overseen by a Board of Directors composed of the Secretary of State, the Secretary of Treasury, the U.S. Trade Representative,  the Administrator of USAID, the CEO of the 
MCC and four non-government members to be appointed by the President.  So I am happy to say that 
Board agencies are well represented here. 
  The MCC will establish results-oriented partne rships with the countries that qualify for 
funding. The Corporation will enter into a proposal, or “compact,” with them that lays out concrete 
objectives, benchmarks and responsibilities for m eeting mutually established development goals. 
 
 On February 2, 2004, the Board approved 63 countries – several in Africa – that are candidates for participation in the MCA in FY04.   In early May – less than 2 months from now - the MCC Board will meet to select eligible countries who will be invited to develo p a compact to receive MCA assistance.  
 
 Once countries are selected, th e MCC will work with potential recipient countries to develop 
compacts that set forth a commitment between the Un ited States and the developing country.  In this 
partnership, countries will identify their own develo pment priorities and establish a plan for achieving 
sustainable economic growth and poverty reduction.  
 
 Based on what we have heard, we encour age cotton producing countries that are found 
eligible for this new program to give considera tion to this sector when negotiating their compacts – 
just as they need to in their PRSPs or IF diagnostic studies.  
 
 The MCA represents another way that the US ma y be able to work with selected countries on 
the development aspects affecting the cotton sector in  Africa.  And for countries that are close to 
meeting the criteria, USAID will be working with these threshold countries so they have a chance to 
eventually become eligible.  
  I now turn over the program to Emmy Simm ons of USAID for a presentation on ways our 
traditional assistance programs can make a real difference on this issue.  
 
 WT/L/587 
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ANNEX 7 
 
STATEMENT BY THE US DELEGATION 
 
Assistant Administrator Simmons
 
 
 
 I’m happy to be here with Ambassador Deily , who is working hard with her colleagues in 
Geneva to restore momentum in the negotiating agenda.   And it’s a particular pleasure to be participa ting on this panel with Ambassador Iversen, who 
is making such an important contribution to the IF in Geneva.  
 This workshop, however, is not about the ne gotiations.  It’s about what we can do to 
accelerate development in Africa, especially in the cott on sector.  It is about bringing the benefits of 
trade opportunities home to farm families.   I recall being at a luncheon in the early days  of the WTO Ministerial in Seattle in 1999 – 
when the U.S. hosted the African participants to talk  about trade-related issues.   After a lot of talk 
about the potential for trade that the launching of a new round would bring, I was particularly struck by the comment of the Benin representative: What g ood does it do to have a new trading framework if 
we don’t have anything to supply?   A lot has changed since then.   
 
 For one thing, the United States has demonstr ated its commitment to providing concrete 
assistance to address developing countries’ capacities to trade.  
• Worldwide, we are the largest single country donor of TCB assistance. 
 
• Total U.S. funding for TCB activities in Sub- Saharan Africa was $133 million in FY2003, a 
26% increase from FY2002 ($105 million), and a 207% increase from FY2001 ($64 million).  
In other words, we have roughly doubled our  assistance to Sub-Saharan Africa since Doha. 
  We are, of course, not alone in this effort.  It is why we  strongly  support the Integrated 
Framework process, which is an extremely important  vehicle for addressing this region’s TCB needs.  
The United States is pleased to step into  the donor coordinator role in May. 
  The United States is making regular contributions to the IF Trust Fund.  We’re also actively supporting in-country IF projects wherever we can.   We’re currently actively engaged in the ongoi ng IF work in Mali and Senegal.  And we 
strongly supported the IF Working Group’s r ecent decision to work in Benin and Chad. 
 
We Want To Work With You 
 
 But we do also work intensively on a bilateral b asis.  Our delegation is here because we want 
to work with you on the development obstacles you face in the cotton sector.   
  Yesterday we all focused together on the de velopment aspects of cotton in a comprehensive 
way.    It is clear that there are many areas in wh ich effort is needed: (1) to increase productivity; (2) 
to introduce new innovations; (3) to add value; and (4) to explore and build new markets.       
  WT/L/587 
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Supply Side Assistance 
 
 All of these goals are addressed by trade capacity  building assistance that is often described as 
“behind the border” or “supply side” assistance.  Let me give a few examples of each of the areas noted before.     First, increasing agricultural productivity.  This is a particular emphasis of many programs in 
Sub-Saharan Africa.   
  For example, the USAID mission in Mali will undertake work to expand and improve irrigation potential; develop the private sector seed  industry; support improved production of a range 
of crops; introduce agro-processing technologies; and provide business development services for potential local investors. 
 
 Second is the innovation of new technologies  - a topic that came up repeatedly yesterday.    Again, this is an issue that we are prepared  to work on with you.  This June, the U.S. 
Department of Agriculture will sponsor a Regiona l Agricultural Science and Technology Conference 
in Ouagadougu, Burkina Faso, to discuss ways to harness innovations in science and technology. 
  At this conference, USAID will formally launch a program that will assist national 
governments to put in place necessary regulatory frameworks and protocols to support the use of new agricultural technology.   We believe that cotton is an ideal “first candidate” for this program. 
 
 We will work on the development aspects of the cotton sector in other ways.  The United 
States Trade and Development Agency (USTDA) pl ans on funding feasibility studies that would 
highlight options for African governments and priv ate-sector to obtain the financing necessary to 
implement projects that can increase the sustainability  of the agricultural sector – potentially adding 
value through processing.  TDA will th en aim to follow up on these projects. 
 
 Finally, there is the challenge of markets.  We heard yesterday about the need for work that 
focuses on understanding markets.  One activity that addresses this is the Regional Market 
Information System.  This system is intended to im prove regional trade by strengthening networks of 
regional market information systems and traders’ or ganizations.  It will improve intra-regional trade 
in critical inputs and agricultural commodities, including cotton.   
  Our regional “Global Competitiveness Hubs” in  Accra, Botswana, and Nairobi also help 
African producers identify and take advantage of ma rket opportunities created by the African Growth 
and Opportunity Act (AGOA) in the United States.  
 The presentations that we heard yesterday unde rscored the need to support Africa’s efforts to 
add value to cotton and develop the agriculture sect or more broadly so as to take advantage of 
opportunities like AGOA.   AGOA has encouraged the creation of over 190, 000 new jobs in Sub-Saharan Africa and over 
$340 million in AGOA-related investments.  In the last  year alone, we have seen African imports of 
textiles and apparel soar 50%, imports of chemical s and related products up 30 per cent, agricultural 
imports up 13 per cent, just to name a few sectors.   Total U.S. funding for TCB activities relate d to AGOA was almost $69 million in FY2003, a 
13% increase from FY2002 ($61 million), and a 201% increase from FY2001 ($34 million). 
 
 The United States will continue to support West Africa’s agricultural expansion and AGOA 
implementation efforts through AGOA Resource Ce nters (ARCs).  These centers are places where 
entrepreneurs can go and get accura te, comprehensive, up-to-the-mi nute information on products that WT/L/587 
Page 44 
  they wish to export.  We opened our most recent A RC in Lagos last month.  We expect to open two 
more centers this year and to upgrade the ones crea ted last year by providing additional equipment 
and better quality information, including a newl y developed, comprehensive CD–ROM, which was 
designed to compensate for limited internet access in the region.    Many of the issues that we heard raised yesterday can best be addressed by sharing experience between our cotton industries.  The Americ an cotton industry has expressed its interest and 
willingness to expand its contacts with African farmer s and processors.  Indeed, such a dialogue has 
already begun with the visit of Malian Trade Minister Maiga to the United States.   Our industries face some common problems.  We  believe both sides would benefit by sharing 
ideas and concerns directly.  We will continue this dialogue through a further exchange of visits.  To 
start, cotton producers and officials from the Cotton- 4 countries will visit the United States to look at 
our production, ginning, export system and perhaps textile industry.  Later,  a team of American 
specialists from our industry will look to come to Africa to expound upon production and processing 
in the United States.    As I said, this intensified contact might touch on several of the areas just discussed – 
exploring new technologies, improving research th rough contacts between our universities, improving 
grades and standards, and perhaps sharing how Am erican farmers use futures markets to manage 
against price volatility.  I’m sure our producers and processors will find other topics of common interest as well.    West Africa International Business Linkages Pr ogram (WAIBL) is another way we try to link 
the African and U.S. private sectors.  Since its inception it has facilitated more than $100 million in 
transactions between the West African and American business communities in every sector 
imaginable (e.g., textiles, equipment).  In 20 03 alone, WAIBLE completed over 250 transactions and 
facilitated $55 millions in consummated deals.  This is an extremely cost effective program that has 
generated over $100 dollars in business for every dollar invested. 
 
Conclusion 
 
 These are a few examples of the concrete steps the United States is taking to address Africa’s TCB needs – particularly West Africa’s. 
 
 We look forward to hearing from our African colleagues about their specific capacity building interests and priorities, which I will report back to  Administrator Natsios, Assistant Administrator 
Newman, and our missions in the region.   The USG looks forward to working with you on identifying your needs and working with you 
on ways forward on the development aspects of cotton facing your countries. 
  I very much hope this conference will not only help move the Doha Agenda forward, but will 
also help ensure that Africa gets the maximum po ssible development benefits from that process.   
 
 
  WT/L/587 
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ANNEX 8 
 
STATEMENT BY THE CHINESE DELEGATION  
 
 Mr. Chairman, Ladies and Gentlemen,  
 It is the honour of the Chinese Delegation to be  invited to this importa nt event.  I thank the 
host Government of Benin for its warm hospitality and the WTO Secretariat for its great efforts in 
preparing this Workshop.  I would li ke to take this opportunity to highlight the basic position of China 
on the development aspect of the cotton issue and ex change views with the participants on how to 
explore more effective ways of addressing the issue in focus.  
1. China has contributed to the development of the cotton sector in Africa by importing a lot of 
cotton from this region.  Recent years saw dramatic increase of cotton imports by China.  In 2003, for 
example, total imports of cotton by China amounted to 874,000 tons.  Hence, China now is a net cotton importer of 762,000 tons b ased on our statistics for 2003. 
 
 To illustrate how we are contributing to the de velopment of the cotton sector in Africa, let me 
use the statistics of cotton trade between China and the four Wester n African countries in Benin, 
Burkina Faso, Chad and Mali who jointly tabled th e Sectoral Initiative on Cotton in the WTO.  Last 
year, exports of cotton to China from the four co untries concerned surged to US$ 131.73 million, an 
increase of 6.39 times over that for 2002 ($ 20.6 m illion).  In the breakdown, our cotton imports from 
Benin went up by 3 times to $ 68.25 million;  cotton imports from Chad grew by 85% to 
$ 2.8 million;  cotton imports from Mali grew by 18 times to $ 28.32 million;  and cotton imports 
from Burkina Faso went up by 47 times to $ 32 million.  2. China is also helping the development of th e cotton sector in this region by elimination of 
export subsidies on cotton upon its accession to the Wo rld Trade Organization.  On several occasions, 
we have told our African friends that the Joint Initiative quoted some outdated, inaccurate figures 
aobut China's cotton policy from studies done by certain  organization.  Here I want to set the record 
straight by reiterating our cotton policy that we no longer provide any export subsidies to cotton and 
our domestic support measures for cotton belong to the Green Box, for the purpose of assisting the application of cotton production technology and supporting the impoverished farmers to develop 
production.  The aggregate financial supports provid ed for cotton in recent years in China are far 
below the de minimis  level commited by China.  Given tax es levied on farmers, the actual support 
level for cotton in China is even lower.  Therefore, our policy of domestic support for cotton is fully in compliance of our WTO accession commitments.  3. The Chinese cotton farms and the cotton sector are also victims of those cotton subsidies by 
developed countries.  Cotton is an important economic crop in China, for it plays a crucial role in 
creating agricultural jobs, rising farmers' income an d developing local economies.  In China, some 
150 million farmers are involved in the production of cotton.  Due to the high level of openness in our cotton market, our cotton production is very much affected by foreign cotton subsidy policies.  For the period of 1995 to 2002, because of low cotton prices in the world market, the price of our cotton had 
been knocked down by 24%, and the area of cotton plantation went down by 22.8%.  This had a 
serious negative impact on the income of our cott on farmers and development of the sector.  It is 
obvious that China is a victim of foreign cotton subsidies, too.  4. Development assistance has been provided by China to many African countries.  China itself 
is a developing country, and values very much th e growth of economic and trade ties with African 
countries.  For decades, despite its own difficulti es, China managed to build over 714 turn-key 
projects in 48 African countries, of which 134 ar e agricultural projects.  The Chinese Government 
also encourages our business to form joint ventur es and conduct projects of co-operation in Africa, 
and some of those projects have achieved fairly good economic and social results.  Besides, technical WT/L/587 
Page 46 
  assistance is provided and capacity building efforts are made by China to help our African friends to 
develop specific skills in many areas and in manageme nt capabilities.  China is considering to tilt our 
development assistance efforts in the future more towa rd the areas related to the cotton sector, so as to 
facilitate the healthy and sustainable growth of the cotton sector in Africa to the benefits of African 
people.  5. The basic position of China on cotton negotiations  under the Doha Development Agenda is as 
follows:  as a victim of huge cotton subsidies by  developed countries, we  understand and support the 
Cotton Initiative by four African countries.  The solution for cotton should be sought within the 
framework of the DDA.  China calls for reducti on of trade-distorting domestic support, and 
emphasizes substantial reduction of such supports  by developed Members.  We call for the 
elimination of all forms of export subsidies.   Developing countries are entitled to special and 
differential treatment, including the concept of Special Products, etc.  We are pr epared to work closer 
with all other developing count ries to push forward the progress of the DDA negotiations in the 
direction of serving our common interests.  As alwa ys, China will continue its efforts in strengthening 
our friendship and co-operation with this region for common prosperity. 
  Thank your for your attention. 
 
  
  WT/L/587 
 Page 47 
  
ANNEX 9 
 
FOOD AND AGRICULTURE ORGANIZATION OF THE UN 
 
IMPORTANCE OF COTTON PRODUCT ION AND TRADE AND STRATEGIES 
TO ENHANCE COTTON’S CONT RIBUTIONS TO ECONOMY 
AND FOOD SECURITY IN AFRICA 
 
Shangnan Shui 
 
Commodities and Trade Division 
 
  Cotton is one of the most important and widely produced agricultural crops in the world. In 2003, about 130 countries produced cotton, and it is estimated that the crop was planted on 2.5 per cent of the world’s arable land area. Cotton is produced for various purposes. Revenue from the sale 
of cotton may meet the basic consumption needs of  farm families and be exported to earn foreign 
exchange. At the household level, cotton is an important cash crop fo r millions of farmers worldwide. 
The income generated from the crop contributes to  rural household food security, especially in 
developing countries.    Cotton production has increased steadily in Afri ca over the past decades although fluctuations 
were seen year by year due to weather conditions and other social or economic developments.  While 
several traditional major producers such as Egypt and Sudan saw their production drop lower since late 1980s, several new or traditional small producer s such as Benin, Burkin a Faso, Cameroon, Chad, 
Cote d’Ivoire, Mali, Togo, Uganda and Zimbabwe  experienced significant increases in production by 
area expansion. Africa is playing an increasingly im portant role in the world cotton market. Currently, 
production in African accounts for about 8 per cent of world output and 20 per cent of world exports. 
With growth in production and exports, cotton has increasingly contributed to national economic 
growth, employment and trade balance, which ar e essential bases to achieve food security at the 
national and household levels in A frican cotton producing countries.  
   This note attempts to outline the importance of cotton production and trade, and proposes 
strategies to enhance cotton’s contributions in a competitive and volatile world cotton market. Since 
the note is largely based on the preliminary results of our ongoing research, comments and 
suggestions are welcome. Moreover, all my presentati on in this note may not reflect the FAO official 
view and all errors are mine.  1. Importance of cotton 
 
 While world cotton production and trade grew slowly in the last decade, Africa saw its 
production and exports expand at a rapid pace. Co mpared with the period of 1988-1992, average 
production in Africa during 1998-2002 reached 1.7 million tonnes,  which was 26 per cent higher that 
that during 1988-1992. West African cotton produc ing countries experienced much higher expansion 
rates of production, 75 per cent during the same period.  Several West African cotton producing 
countries such as Benin, Ghana, Guinea and Mali ha d their production increase by 154, 218, 553 and 
193 per cent, respectively. Exports from Africa also increased significantly. During 1998-2002, the 
average level of cotton exports was 1 million tonnes, which was 35 per cent more than that during 
1988-92. West Africa accounted for more than half of  the African exports with a 66 per cent increase 
in the same period (table 1). With such a rapid e xpansion in production and export, cotton has been of 
growing importance for Africa, especially for the major cotton producing countries in West Africa.  WT/L/587 
Page 48 
  
1.1 Contribution to economy 
  In many countries, the importance of the agri cultural sector in terms of its share of GDP has 
been declining with economic development. Howeve r, for most developing countries, agriculture is 
still the key sector of the economy on which large parts of the population are dependent.  And for 
some of these countries, cotton accounts for a si gnificant share of agricultural production. 
Consequently, revenue from cotton production is  of great importance in national economies, 
especially in African cotton producing countries. Us ing the cotton export unit value, it was estimated 
that average value of cotton output during 1998-2002 in West African cotton producing countries was close to US$1 billion, of which US$ 156 million was in Benin, US$153 million in Burkina Faso, US$169 million in Cote d’Ivoire, US$ 199 million in  Mali and US$ 65 million in Togo. Cotton made 
a significant contribution to the national economies in these countries. As summarized in Table 2, value of cotton output during 1998-2002 contributed to 6.3 per cent, 6.3 per cent, 1.4 per cent, 6.6 per 
cent and 4.8 per cent of GDP for Benin, Burkina F aso, Cote d’Ivoire, Mali and Togo, respectively. 
Moreover, the share of cotton value in GDP has been rising over the last two decades for countries 
including Benin, Burkina Faso and Togo. The significant share in GDP and rising share value suggested very important contribution of cott on production to the national economy in these 
countries. 
 
1.2 Importance for agricultural export revenue 
 
 Exports of agricultural commodities are an im portant source of foreign exchange for many 
developing countries, especially those in the initial developing stage. Cotton is one of the important 
agricultural commodities traded in the world mark et. In 2003, there were over 100 countries involved 
in trade in cotton with total revenue of about  US$ 7 billion, among which 85 per cent was from 
developing countries.  By individual product gr oups, the export revenue from cotton was the 
6
th largest following oil and fats, wheat, oilseeds, bovi ne meat and maize.  However, on the individual 
country basis, cotton export revenue was very significant to African cotton producing countries.    
 Table 3 showed the share of cotton in to total agricultural export revenue for selected African 
countries.  The table reveals several very important  facts. First, cotton export revenue was the most 
significant source of agricultural export revenue in several cotton producing countries where it 
accounted for more than 40 per cent of total agri cultural exports during 1998-2002. The share of 
cotton exports in total agricultural export revenue was 73 per cent for Benin, 66 per cent for Burkina 
Faso, 61 per cent for Mali and 41 per cent for Togo,  which suggested that cotton exports were very 
important for these countries.     In absolute terms, cotton exports brought n early US $1.3 billion for Africa countries during 
1998-2002. Benin, Côte d'Ivoire and Mali each earned more than US $100 million from cotton 
exports.  Such large revenues obviously have im portant effects on national economies and household 
incomes. On average, cotton exports accounted for more than 8 per cent of total agricultural export 
revenue for African countries and about 14 per cent for West African cotton producing countries.  
  Comparing the period during 1998-2002 with 1988-1992, the relative importance of cotton export revenues slightly declined for many West Afri can countries, which can be attributed largely to 
the faster increase in total agricultural export revenue  than that in cotton exports in these countries due 
to the lower unit value of cotton exports. During 1998-2002, the average unit value of cotton exports was US$1.24/kg compared with US$ 1.61/kg for 1988-1992.   
1.3 Contribution to food imports 
  While many developing countries export agricu ltural products, they import food.  Food 
import bills of developing countries have been ri sing steadily, reflecting both higher consumption 
levels related to income and popu lation growth, but also in many cases the need to supplement slow-
growing domestic food production. Therefore, at the national level, the capacity to generate foreign  WT/L/587 
 Page 49 
  exchange to finance the necessary food imports is of  importance. Thus, it is important to examine the 
contribution which cotton export revenue can make to  food imports.  Table 4 summarizes the ratio of 
cotton export revenue to total food import expe nses for selected African countries which cotton 
exports were important for food imports.  On the average, cotton exports from Africa covered more 
than 7 per cent of total food import bill, but it was more than 100 per cent for Benin and Mali, around 
80 per cent for Burkina Faso and Togo, and 38 per cent  for Cote d’Ivoire. The cover ratio for most of 
these countries declined slightly compared 1998-20 02 with 1988-1992, which reflected largely the 
higher food import expenses. 
  One of the essential aspects of food security is the availability and accessibility of food for all. 
At the national level, the availability of resources  to import food is very important for domestic food 
supply.  In view of this, one can say that cotto n exports contributed greatly to food security, in 
particular for these African cotton producing coun tries. The revenue from cotton exports allowed 
these countries to access food in the world market and import food to meet domestic demand. 
 
1.4 Employment contribution 
 
 Although it is a well-known fact that cotton pr oduction contributes to employment, especially 
in developing countries, it is difficult to obtain actual numbers of the farmers employed.  One 
difficulty stems from the seasonal nature of pro duction as in the case of many other agricultural 
production activities. In certain periods, production ac tivities are very intensive while less work is 
needed in other periods.  Moreover, differences in  farm structures result in varying labour needs.  
Given the difficulties of estimating the numbers of employment in cotton production, we used labour 
involvement in cotton production which is the numbe r of workers engaged in cotton production, no 
matter whether they are full time or part-time, to proxy the employment.  
 
 To obtain an estimate of the farm labour involved in cotton cultivation world-wide, we 
conducted employment surveys for selected countries, chosen as being representative of certain 
categories of countries and of cotton farm structur es. According to the information on average labour 
involvement per hectare from these  surveys, an estimate of labour involvement in cotton production 
for individual countries was calculated based on actual planting areas in 2002. Table 5 provides a 
summary of the estimate for selected African cott on producing countries and the ratio of cotton labour 
involvement to total labour force was calculated.   
 Table 5 suggested that the contribution to empl oyment was very significant in several African 
cotton producing countries, not only in the absolute  size of labour involvement but also its relative 
importance in national employment. It was estimat ed that there were 450,000, 380,000, 350,000, 
800,000, 650,000, 200,000 and 580,000 workers engage d in cotton farming in Benin, Burkina Faso, 
Côte d'Ivoire, Mali, Nigeria, Togo and Zimbabwe, respectively, which provided employment for 29, 
7, 11, 17, 4, 17  and 3 per cent respectively of th e national labour force in these countries. In addition 
to direct employment in farming, cotton production has also induced additional employment opportunities, which include cotton ginning, transpor ting, marketing and exporting.  If these were to 
be included, the employment contribution would be more significant in these countries. 
  Cotton production and tr ade contributed to food security significantly at both the national and 
household level. At the national level, cotton make s a significant contribution to food security mainly 
through its contributions to food import bills, a nd at the rural household level, to food security 
through employment and income. It will improve food security in these countries to enhance 
contribution from cotton production and trade. 
  WT/L/587 
Page 50 
  
2.  Strategies to enhance cotton contri butions to the economy and food security 
  Cotton production and trade have made consid erable contributions to the national economy, 
foreign exchange, employment and food security in  these African cotton producing countries over the 
past decades. However, these countri es have been facing increasing ch allenges in the recent years. 
There are three major challenges to the further development of the cotton industry in African 
countries.  
 
2.1 Slow increase in productivity 
 
 Yield is a major indicator of productivity. As reported in table 6, the average cotton yield during 1998-2002 in Africa was only 2.2 per cent higher than that during 1988-1992 although cotton output increased by 26 per cent during the same period, which suggested that the production 
expansion was achieved mainly thr ough area expansion. Several impor tant cotton producing countries 
in West Africa including Benin, Mali, Senegal a nd Togo experienced considerable declines in cotton 
yields, where the average yield during 1998-2002 was 18, 27, 28, and 21 per cent respectively lower than that during 1988-1992.  While some countries  such as Burkina Faso and Nigeria experienced 
increases in their cotton yields dur ing the same period, their yield levels were still lower than the 
world average level. 
  While world average yield increased at a slow  pace during 1988-2002, both growth in yield 
and the actual level of yield in Africa were signi ficantly lower than the wo rld average. The world 
average yield grew by 5 per cent during 1988-2002 but by only 2.2 per cent in Africa. The average cotton yield in the world was 578 kg/ha during 1998-2002 but it was only 362 kg/ha in Africa. The 
yield in major cotton producing countries in the world was over 1,000 kg/ha (Australia had the highest 
yield, 1,550 kg/ha). The yield gap between Africa and other major cotton producing countries was huge. The average yield in African cotton producing countries during 1998-2002 was only 63 per cent of the world average and 23 per cent of that in Australia.  
 Factors which were responsible for the lower yield may vary from country to country. Most 
common factors which caused lower yield include inefficient marketing and trading systems for 
cotton and production inputs such as seeds, pesticides and fertilizer, lack of research and extension, 
and poor infrastructure and irrigation systems. Other factors are lack of timely supply and high prices of inputs, and dependence on rainfall. The extremel y low farm gate price of cotton also played a 
major role in discouraging cotton farmers to incr ease the input use as farmers had no incentives to 
increase output. Moreover, with rapid production expa nsion, a great amount of marginal land and 
farms came under cotton production. These areas ma y not be good for cotton production or farmers 
may be lack of production skills, which normally lead  to a very low yield level, which, in turn, 
dragged down the national yield leve l. Various policies toward the cotton industry and institutional 
constraints can also discourage farmers to increase productivity.   
 
2.2 Trivial role in world textiles and clothing exports 
 
 World trade in textiles and clothing has e xperienced rapid growth over recent decades. The 
total value of textiles and clothing reached US$ 353 billion in 2002, which was 240 per cent more 
than that in 1985. It is well known that exports in textiles and clothing ha ve functioned as important 
ladder for industrialization at the initial developm ent stage. African countries as a whole, however, 
have had little participation in this fast growing area. Measured by export revenue in US dollar, 
exports of textiles and clothing from Africa we re only US$ 3.2 and US$ 1.2 billion in 2002, 
respectively, which accounted for 2 per cent and 0.6 per cent of the world total while it accounted for 
20 per cent of world cotton exports. More strikingly, while some countries export raw cotton, they 
rely on imports of cotton textiles and clothing for do mestic consumption. For instance, in 2002, Benin 
exported little cotton textiles and clothing, 221 tonne s but imported 7,129 tonne s of cotton textiles and 
clothing, which resulted in net foreign exchange expenditure of US$ 48 million for these imports (see 
table 9).  WT/L/587 
 Page 51 
    Terms of trade have long been favourable fo r manufactured goods in world markets. Exports 
of raw materials do not only face unfavourable terms of trade but also lose value-added opportunities. 
The average cost of cotton accounts fo r only about 5 to 7 per cent of the value of the final textiles. In 
other words, if the final products rather than raw ma terials were to be exported, more than 90 per cent 
of value-added would be obtained. According to the primary result of the FAO/ICAC world fibre consumption survey, the average unit value of cotton textiles and clothing exports in 2002 was 
US$ 4.5/kg in China, the lowest cost exporter in  the world. The average unit value of raw cotton 
exports from Africa was US$ 1.24/kg during 1998-2002. Thus, if textiles rather than raw cotton were 
to be exported at the same pri ce as from China, African countries would obtain 262 per cent more 
foreign exchange. The implementation of the Ag reement on Textiles and Clothing (ATC) and the 
ongoing WTO negotiations on tariff reduction on manufact uring goods including textiles and clothing 
would promote a better environment for trade in textiles and clothing.  
 
 Weak competitiveness due to lack of investme nt, skilled labour and management were largely 
responsible for the severe underdevelopment in the te xtile and clothing textiles and clothing industries 
in Africa. Government industry policies, macro economic stability and institutional constraints may 
also restrict the potential for development of these industries. 
 
2.3 Long-term decline in the world cotto n price and the volatile world market 
 
 The world cotton price has steadily declined over the past decades. In real terms, the current 
price is about 20 per cent of that in the early 1950s. Many other primary agricultural commodities 
have experienced a similar trend. At the same ti me, the world market has been volatile. A recent 
example was a 46 per cent drop of the world cotton price between 1995 and 2000 followed by a 72 
per cent rise from early 2001 to late 2003.   To examine the possible strategies for Afri can cotton producing countries to meet these 
challenges and enhance their long-term prosperity of the cotton industry, we used a computable 
general equilibrium (CGE) model to simulate the potential measures and policies to increase yields 
and exports of textiles and clothing in Africa. We set up two targets. One is that average cotton yield 
in Africa would reach the world average and another is to increase exports of textiles and clothing by 
200 per cent over 10 years. Then, we change various  variables in the model including increase in 
skilled labour, expansion the size of chemical sector , reduction in marketing margin in cotton trade, 
increase in public investment and fixing of exchange  rate. Our preliminary results suggested that all 
these factors would have significant c ontributions to these two targets. 
  FAO preliminary simulation results suggested th at to reach the world average yield level in 
2002, African countries would need to increase skille d labour by 24 per cent, public investments by 
16 per cent, and the chemical sector by 12 per cent,  which implied that African countries should have 
more trained farmers in the cotton sector, higher investment in research and extension and more input 
supplies, in particular fertilizer. The effects of catching-up productivity would be very significant 
which would allow African countries to increase cotton production by nearly 90 per cent over 10 years without expansion in planting areas. The increased productivity would also allow African 
countries to compete with other exporters in the wo rld cotton market. Consequently, African countries 
would increase their cotton exports by 140 per cent over the 10 years.  
  To increase exports of textiles and clothing by 200 per cent, African countries would have to 
increase skilled labour by 32 per cent and the textiles and clothing sectors should expand at least 300 per cent from the base. An interesting effect of increasing exports of textiles and clothing would be that it would induce a 35 per cent increase in co tton production but result in slower increase in 
cotton exports. Increase in investments and skille d would hold the key to expand the textiles and 
clothing sectors.  WT/L/587 
Page 52 
   One of interesting findings from our simulations  was that the reduction in market margin in 
cotton trade would have important effects on the competitiveness and cotton farmers’ income. By 
allowing a 50 per cent reduction in marketing marg in, which is assumed that African cotton farmers 
would have a similar share in pr ice with Indian cotton farmers, African cotton producing countries 
would increase their export revenue by 14 per cent  due to improved competitiveness in the world 
cotton market and farmers’ income by 37 per cent.   Currently, a few multi-national trading companies 
or governments in many African countries have  monopoly power over cotton exports. Reforms would 
be needed to increase the efficiency and transpar ency of the cotton trading system to allow cotton 
farmers to obtain greater benefit from producing cotton.   The model simulations also revealed that an expansion of the textiles and clothing sectors in Africa would induce significant changes in its cotton trade pattern. There would be an increase in inter-region trade in cotton but exports to the worl d market would grow at a much slower pace.  
 
 In summary, these simulations suggested that to meet the challenges facing African cotton 
producing countries, increasing productivities and est ablishing/expanding textiles and clothing sectors 
would hold the key to long-term prosperity of the cotton industry. Since sever al other experts at the 
workshop will have a detailed presentations about the technical measures such as improved farming 
practices, better breeding, better irrigation, hi gh quality inputs, adoption of bio-tech cotton, 
strengthening research and extension, and about inst itutional reforms such as rationalizing the trading 
and input supply system, allowing farmers’ particip ation in developments of the cotton industry to 
increase productivity of cotton production and compe titiveness of cotton exports in African countries, 
I will not discuss these issues here. However, I would like only to emphasize that FAO, the 
specialized agency for agriculture in the UN system has the capacity to provide technical assistance to 
African countries to improve productivity of cotto n production. Indeed, several projects aiming at 
increasing efficiency in cotton production are proceeding in a few African cotton producing countries.   It is essential for establishing/expanding the te xtiles and clothing sectors in African countries 
to increase their industry competitiv eness in the world textiles and clothing markets. There is no doubt 
that the world textiles and clothing markets are ve ry competitive. With the implementation of the 
ATC and China’s admission to WTO, the competiti ons have been intensified substantially. While 
countries such as China, India and Pakistan, where labour is abundant and wa ge rate is low, and 
textiles and clothing sectors are well established, ar e very competitive in the world markets, African 
countries have their own advantages. In world trad e in textiles and clothing, the competitiveness is 
embodied in many aspects not only the labour cost. From the view of importers, the comparative 
advantages in textiles and clothing industry consis t of many aspects including: timing, scale, quality, 
service and stability not only the low price. Thus, to improve competitiveness in the world textiles and 
clothing exports, a systematic strategy should be taken.     African countries, especially those with abun dant raw material base should take concrete 
measures to improve their competitiveness in the wo rld textiles and clothing markets to benefit from 
trade liberalization in textiles and clothing because th e availability of raw materials is an important 
factor to ensure timely delivery of product. In the view of textiles trade history, the emergence of new 
competitive exporters to replace old major exporter has been a continuing process over the past few 
decades. Japan was the world leading exporter of te xtiles and clothing in 1950s, but it was replaced by 
several other Eastern Asian countries and regions in 1960s. In 1980s, China, India and Pakistan 
emerged as the major exporters in the world.    Finally, cotton exports have been almost the sole source of agricultural export revenue for a 
few African cotton producing countries. Given that  the world cotton price has been in long-term 
decline and the market has been volatile, in add ition to risk management measures, these countries 
should take steps to diversify their export re venue sources. Over-dependency on single commodity 
exports makes export revenue vulnerable to market fluctuations. Development of a textile industry 
would provide some diversity of export earnings wh ile also capturing the benefits of value-adding. 
  WT/L/587 
 Page 53 
  
Conclusion
 
  Cotton production and trade have played an im portant role in devel oping national economies, 
generating export revenue, coveri ng food import bills and creating employment in African cotton 
producing countries, which contributed substantially to food security in these countries. In the view of 
development, these countries are facing important ch allenges to the long-term prosperity of their 
cotton industry. To meet these challenges, these c ountries should focus on the increase in productivity 
in cotton production, establishment or expansio n of the textiles and clothing sectors, and 
diversification of export revenue.  WT/L/587 
Page 54 
  
 
Table 1. Cotton Production and Export Growth in West Africa   
       
          
Production              
Export   
   growth Quantity Quantity growth 
 Average Average  Average Average  
Country 1988-92 1998-02  1988-92 1998-02  
 (1000MT) (1000MT)  (%) (1000MT) (1000MT) (%) 
       
Africa 1,339 1,687 26 750 1,012 35 
       
Western Africa 501 879 75 332 552 66 
       
Benin 58 147 154 44 136 212 
Burkina Faso 67 128 90 53 80 51 
Côte d'Ivoire 110 156 41 88 133 51 
Ghana 6 19 218 0 5            na 
Guinea 3 22 553 2 4 100 
Mali 112 187 67 98 133 36 
Niger 2 5 193 1 1 12 
Nigeria 89 145 63 1 9 819 
Senegal 16 10 -41 10 10 -5 
Togo 36 60 65 34 40 16 
Chad 57 65 14 60 57 -5 
Zimbabwe 74 108 47 45 90 98 
       
Other Africa 707 635 -10 313 313 0 
       Sources: 
FAOSTAT.        
       
  WT/L/587 
 Page 55 
  
 
Table 2. Cotton's importance for GDP    
                 Value of cotton output        Share of cotton value in GDP 
 Average Average Average Average 
Country 1988-02 1998-02 1988-92 1998-02 
 (Million USD) (Million USD) (%)  (%) 
     
Western Africa 720.11 968.48 0.65 0.66 
     
Benin 85.50 156.20 4.58 6.27 
Burkina Faso 81.88 153.31 2.87 6.32 
Côte d'Ivoire 169.02 169.66 1.55 1.42 
Ghana 11.86 11.92 0.02 0.03 
Guinea 5.02 26.89 0.03 0.14 
Mali 162.10 199.81 6.70 6.56 
Niger 2.38 1.92 0.10 0.10 
Nigeria 110.12 219.74 0.38 0.36 
Senegal 25.84 11.15 0.47 0.23 
Togo 52.52 65.63 3.31 4.76 
Chad 82.1 84.4 5.56 2.44 
Zimbabwe 115.4 149.6 2.08 1.26 
     
Note: cotton values are estimated based on th e each country's average export unit value  
     
Sources: FAOSTAT, IMF and author's estimates        
 
 WT/L/587 
Page 56 
  
 
Table 3. Cotton's contribution to total agricultural export revenue   
              
 Cotton 
Export Total Agric 
Exp   Cotton 
Export Total Agric 
Exp   
 Value (Thous USD) Share 
of Value (Thous USD) Share 
of 
 Average Average Cotton Average Average Cotton 
Country 1988-92 1988-92  1998-02 1998-02  
 (USD 1000) (USD 1000) (%) (USD 1000) (USD 1000) (%) 
       
Africa 1,207,079 11,837,857 10.20 1,256,369 14,671,002 8.56 
       
Western 
Africa 478,258 3,219,812 14.85 608,222 4,439,468 13.70 
       
Benin 64,400 77,783 82.79 144,201 198,190 72.76 
Burkina Faso 64,600 89,817 71.92 98,093 148,349 66.12 
Côte d'Ivoire 134,289 1,623,424 8.27 144,906 2,404,292 6.03 
Ghana 0 401,722 0.00 2,863 528,960 0.54 
Guinea 2,594 28,965 8.95 4,253 30,539 13.93 
Mali 141,563 246,388 57.46 141,932 234,726 60.47 
Niger 1,822 57,318 3.18 563 68,098 0.83 
Nigeria 1,267 265,521 0.48 14,296 414,109 3.45 
Senegal 15,932 167,510 9.51 11,186 129,573 8.63 
Togo 49,552 107,442 46.12 43,501 105,715 41.15 
Chad 85,663 124,580 68.76 73,538 125,345 58.67 
Zimbabwe 71,160 645,641 11.02 124,733 882,160 14.14 
       
Other Africa 571,997 10,362,520 5.52 449,876 9,224,029 4.88 
       Sources: FAOSTAT      
       
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Table 4. Contribution to food import bill     
              
 Cotton 
Export Total Food 
Import  Cotton 
Export Total Food 
Import  
 Value Value Cover  Value Value Cover  
 Average Average ratio Average Average ratio 
Country 1988-92 1988-92  1998-02 1998-02  
 (USD 1000) (USD 1000) (%) (USD 1000) (USD 1000) (%) 
       
       
Africa 1,207,079 12,784,913 9.44 1,256,369 17,030,299 7.38 
       
Western 
Africa 478,258 2,305,615 20.74 608,222 3,716,668 16.36 
       
Benin 64,400 97,527 66.03 144,201 131,259 109.86 
Burkina Faso 64,600 81,236 79.52 98,093 125,829 77.96 
Côte d'Ivoire 134,289 377,046 35.62 144,906 383,687 37.77 
Ghana 1 163,246 0.00 2,863 345,649 0.83 
Guinea 2,594 110,515 2.35 4,253 128,781 3.30 
Mali 141,563 85,950 164.70 141,932 103,301 137.40 
Niger 1,822 86,030 2.12 563 106,763 0.53 
Nigeria 1,267 522,044 0.24 14,296 1,393,743 1.03 
Senegal 15,932 304,549 5.23 11,186 434,548 2.57 
Togo 49,552 76,268 64.97 43,501 52,921 82.20 
Chad 85,663 22,613 378.82 73,538 28,460 258.39 
Zimbabwe 71,160 94,165 75.57 124,733 128,703 96.92 
       
Other Africa 571,997 10,362,520 5.52 449,876 13,156,467 3.42 
       Sources: FAOSTAT      
       
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Table 5. Contribution of employment in  cotton farming to total employment 
    
    
 Farm direct involvement Total Share of cotton 
Country    in cotton Labour employment in 
  (number of labour) Force total labour force 
 Thousands Thousands (%) 
  2002  
    
    
Benin 450 1,553 29 
Burkina Faso 380 5,475 7 
Côte d'Ivoire 345 3,127 11 
Chad 380 3,805 10 
Ghana 75 5,741 1 
Guinea 62 3,429 2 
Mali 800 4,735 17 
Niger 44 4,630 1 
Nigeria 650 15,183 4 
Senegal 40 3,224 1 
Togo 200 1,193 17 
Zimbabwe (1) 150 5,844 3 
    
(1) Large farms are not included   
    Sources: FAOSTAT and author's estimates   
    
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Table 6. Changes in cotton production and yield in selected African countries  
          
          
 Production Area Yield Production Area Yield Growth in  Growth 
in  Growth 
in  
  Harvested   Harvested  Production Area Yield 
 Average Average Average Av erage Average Average    
Country 1988-92 1988-92 1988-92 1998-02 1998-02 1988-92 (%) (%) (%) 
 (MT) (Ha) (Kg/Ha) (MT) (Ha) (Kg/Ha)    
          
Africa 1,339,295 3,778,800 354 1,686,900 4,655,088 362 26.0 23.2 2.2 
          
Western 
Africa 500,035 1,367,119 366 879,128 2, 240,580 392 75.8 63.9 7.3 
          
Benin 57,872 118,085 490 147,142 367,456 400 154.3 211.2 -18.3 
Burkina 
Faso 67,417 182,832 369 127,863 302, 706 422 89.7 65.6 14.6 
Côte 
d'Ivoire 110,440 196,829 561 155,564 283,330 549 40.9 43.9 -2.1 
Ghana 5,932 16,666 356 18,860 51,226 368 217.9 207.4 3.4 
Guinea 3,415 6,352 538 22,289 41,725 534 552.7 556.8 -0.6 
Mali 111,907 198,385 564 187,403 456,023 411 67.5 129.9 -27.1 
Nigeria 89,200 516,800 173 145,000 537, 000 270 62.6 3.9 56.4 
Senegal 16,228 39,004 416 9,516 31,722 300 -41.4 -18.7 -27.9 
Togo 36,049 77,419 466 59,636 161,503 369 65.4 108.6 -20.7 
Chad 57,118 214,704 266 65,122 298,274 218 14.0 38.9 -17.9 
Zimbabwe 73,634 247,458 298 107,877 358, 356 301 46.5 44.8 1.2 
          
Other 
Africa 706,674 1,949,519 362 634,773 1,757,879 361 -10.2 -9.8 -0.4 
          Sources: FAOSTAT         
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Table 7. Productivity comparison with the world  
          
 Yield Yield  Growth 
in  
    Yield 
 Average Average   
Country 1988-92 1988-92  (%) 
 (Kg/Ha) (Kg/Ha)   
     
World 550 578  5.1 
     
Australia 1,455 1,550  6.5 
     
Western Africa 366 392  7.3 
     
Benin 490 400  -18.3 
Burkina Faso 369 422  14.6 
Côte d'Ivoire 561 549  -2.1 
Ghana 356 368  3.4 
Guinea 538 534  -0.6 
Mali 564 411  -27.1 
Nigeria 173 270  56.4 
Senegal 416 300  -27.9 
Togo 466 369  -20.7 
Chad 266 218  -17.9 
Zimbabwe 298 301  1.2 
     
Other Africa 362 361  -0.4 
     
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Table 8. Value of world cotton, text iles and clothing export in 2002 
  Unit: billion US $     
      
  World  Africa  
  Export Value  Value Share in world 
     (%) 
      
Cotton  5.93  1.2 20.24       
Textiles  152  3.2 2.11 
      Clothing  201  1.15 0.57 
      
Cotton value ratio to total textiles and clothing value  1.68       
      
Sources: Textile Asia, November 2003 and author's estimates  
      
  
 
Table 9. Benin 2002 Cotton Textile Trade Balance  
       
 Quantity Quantity Trade bala nce Value Value Trade balance 
 Export Import  Export Import  
 (MT) (MT) (MT) (Million) (Million) (Million) 
    (USD) (USD) (USD) 
       Total 221 7,129 -6,909 7 54 -48 
Cotton Yarn 0 0.5 0 0 0    0 
Cotton Fabrics 196 6,116 -5,920 7 48 -41 Cotton Clothing 7 780 -773 0 5   -5 
Cotton Oth. Manuf. 18 233 -215 0 1   -1 
              
Sources: author's estimates based on FAOSTAT country data tape.    
       
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Importance of Cotton Production and 
Trade and Strategies to Enhance 
Cotton’s Contributions to the Economy 
and Food Security in Africa
Shangnan Shui
Commodities and Trade Division, FAO
 
 
 
Rapid expansion in cotton 
production and trade in West Africa
• Production       growth Exports        growth
•Country 1988-92 1998-02 1988-92 1998-02
• (1000MT) (1000MT) (%) (1000MT) (1000MT) (%)
••Africa  1,339 1,687 26 750 1,012 35
••Western Africa 501 879 75 332 552 66
•
•Benin 58 147 154 44 136 212
•Burkina Faso 67 128 90 53 80 51
•Côte d'Ivoire 110 156 41 88 133 51
•Guinea 3 22 553 2 4 100
•Mali 112 187 67 98 133 36
•Nigeria 89 145 63 1 9 819
•Senegal 16 10 -41 10 10 -5
•Togo 36 60 65 34 40 16
•
•Other Africa 838 808 -4 418 460 10
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 1. Importance of Cotton 
Production and Trade
 
 
(1) Contribution to the economy
• Value of cotton output Share of cotton value in GDP
• Average       Average Average Average
•Country 1988-02       1998-02 1988-92 1998-02
(Million USD) (Million USD) (%) (%)
•Western Africa 720.11 968.48  0.65 0.66
•Benin 85.50 156.20 4.58 6.27
•Burkina Faso    81.88 153.31 2.87 6.32
•Côte d'Ivoire   169.02 169.66 1.55 1.42
•Mali 162.10 199.81 6.70 6.56
•Togo 52.52 65.63 3.31 4.76
•Chad 82.1   84.4 5.56 2.44
•Zimbabwe 115.4             149.6 2.08 1.26
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(2) Contribution to agricultural revenue
•Country Share of cotton                 Share of cotton
• 1988-92(%) 1998-02(%)
•Africa 10.20 8.56
•Western Afri 14.85 13.70
•Benin 82.79 72.76
•Burkina Faso        71.92 66.12
•Côte d'Ivoire          8.27 6.03
•Guinea 8.95 13.93
•Mali                       57.46 60.47
•Nigeria                   0.48 3.45
•Senegal 9.51 8.63
•Togo                     46.12 41.15
•Chad 68.76 58.67
•Zimbabwe 11.02 14.14
•Other Africa           5.52 4.88
 
 
 
(3) Contribution to food imports
• 1988-92                  1998-02
•Country Cover ratio (%) Cover ratio (%)
•Africa 9.44 7.38
•Western Africa 20.74 16.36
•Benin 66.03 109.86
•Burkina Faso 79.52 77.96
•Côte d'Ivoire 35.62 37.77
•Guinea 2.35 3.30
•Mali 164.70 137.40
•Niger 2.12 0.53
•Senegal 5.23 2.57
•Togo                          64.97 82.20
•Chad 378.82 258.39
•Zimbabwe 75.57 96.92
•Other Africa     5.52 3.42
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 (4) Contribution to employment
• Farm direct involvement  Total Share of cotton
• Country  in cotton  Labor employment in
• (number of labor  ) Force          total labor force
• (1,000)  (1,000)                        (%)
• Benin  450 1,553 29
• Burkina Faso   380      5,4757
• Côte d'Ivoire   345       3,127  1 1
• Chad 380  3,805 10
• Ghana  75 5,741 1
• Guinea  62 3,429 2
• Mali 800 4,735 17
• Niger 44  4,630 1
• Nigeria  650 15,183 4
• Senegal  40 3,224 1
• Togo 200 1,193 17
• Zimbabwe 150  5,844 3WT/L/587 
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2. Major challenges 
facing African cotton 
producing countries
 
 
(1) Slow growth in yields
• 1988-92           to 1998-02
• Growth in Growth in Growth in 
• Production Area Yield
•Country (%) (%) (%)
•Africa 26.0 23.2 2.2
•Western Africa      75.8              63.9 7.3
•Benin 154.3           211.2 -18.3
•Burkina Faso        89.7              65.6 14.6
•Côte d'Ivoire         40.9              43.9 -2.1
•Ghana 217.9 207.4 3.4
•Mali 67.5            129.9 -27.1
•Nigeria 62.6               3.9 56.4
•Senegal               -41.4             -18.7 -27.9
•Togo 65.4            108.6 -20.7
•Chad 14.0              38.9 -17.9
•Zimbabwe 46.5              44.8 1.2
•Other Africa         -10.2               -9.8 -0.4
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Yield comparing with the world
 
 
 
(2) Little participation in world 
textiles and clothing exports:2002
• World Africa
• Export Value  Export Value  Share in world
• billion US $     billion US $  (%)
••Cotton 5.93 1.2 20.24
••Textiles 152 3.2 2.11
•
•Clothing 201 1.15 0.57
•The ratio of African cotton export value to total 
textiles and clothing export value 1.68
 
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Even importing textiles
 
 
 
(3) Long-term decline in the world 
cotton price
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 3. Strategies to meet 
the challenges
--Preliminary CGE model results
 
 
 
(1) Increasing yield
•Target: reaching the world average 
yield in 10 years
•Need to: increase (a) skilled labour by 
24%; (b) public investment by 16% and (c) chemical sector by 12%.
•Benefit: 90% increase in output and 
140% increase in export without 
expanding areas.
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FAO project in Mali showed 
that better farming practices 
increase production 
efficiency 
• High yield and low cost bring about greater 
profit.
 
 
 
IPPM Farmer Practice80,000120,000160,000200,000Production CostsCotton IPPM vs Farmer Practice
Production Costs (Fcfa / Ha)
Mean Difference = 15,186 Fcfa/ha 
(9.9%) less for IPPM
p=.055
 
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100012001400160018002000Cotton IPPM vs Farmer Practice
Yields (Kg / Ha)
Mean Difference 
= 272 Kg/ha (20.8%) 
more for IPPMYield
IPPM Farmer Practicep = .009
 
 
 
Cotton IPPM vs Farmer Practice
Net Profits (Fcfa / Ha)
Mean Difference 
= 65,559 Fcfa/ha (58.1%) 
more for IPPM
60,000110,000160,000210,000
IPPM Farmer PracticeNet Profitp=.0001
 
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(2) Establishing/expanding the 
textiles and clothing sectors
•Target: increasing exports of textiles 
and clothing by 200%.
•Need to: increase (a) 32% skilled labour
and (b) 300% investments in textiles manufactures.
•Benefit: 187% higher export revenue 
and 35% more cotton output.
 
 
 
(3) More efficient marketing and 
trading systems
•Target: 50% reduction in market 
margin.
•Need to: reform the current marketing 
system to allow farmers to obtain greater benefit from cotton production.
•Benefit: (a) 37% increase in farmers’ 
income and (b) 14% increase in 
production.
 
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Final remarks
•In the view of development, increasing 
production efficiency, marketing efficiency 
and competitiveness in world textiles and clothing markets holds the key to long-term prosperity of the African cotton sector.
•Development should focus on increasing 
farmers’ income and enhancing their food security.
•Diversifying export revenue is important for 
these countries with very high dependency 
on cotton.
 
 
 
    
 
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ANNEX 10 
 
FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS 
 
ROLES AND CONTRIBUTIONS OF MULTILATERAL INSTITUTIONS 
 
  Cotton is one of the most important crops in  West Africa. Cotton production and exports have 
contributed significantly to rural employment, farm ers’ income, food security, national export revenue 
and economic development. For instance, cotton production accounts for 5.5 per cent of GDP in Benin. On average, cotton exports account for more than 22 per cent of total agricultural export revenue for West African cotton exporting countri es. Over the past few decades, African cotton 
production and exports have been facing challenges of substantial price decline and fluctuations in the 
world cotton market, exacerbated by the strong curr ency appreciation which seriously disadvantages 
exporters. 
  In order to rebuild the profitability, co mpetitiveness and sustainability –economic and 
environmental– of the cotton industry in West A frica, it is essential to develop appropriate sectoral 
policies and strategies to cope with the internati onal market dynamics and requirements, while also 
helping the region develop more cost-effective and broadly sustainable production systems and 
improve efficiency in product processing, handling and marketing.   The principal external constraint is low and variable global prices. While world prices have 
recovered somewhat in the past y ear, the strength of the CFA Franc vis-á-vis  the US Dollar has 
limited the beneficial impact of this on West African producers.  
  The principal local production constraints incl ude excessive pesticide inputs, and inadequate 
crop and soil management practices. These result in high on-farm production costs and low farm-household income security. Cotton farmers also face  high risks due to lack of diversification. 
 
 Weak farm-level services and institutional s upport contribute to high costs, low productivity, 
and the vulnerability of cotton farmers. Lack of a dded value processing and po or product quality add 
to the vulnerability of cotton farm ers and further reduce the competitiveness of the cotton industry.  
  Sound strategies are needed to improve produc t quality and increase value addition along the 
supply chain by improving market efficiency and supporting expansion of th e textile and clothing 
industries.   FAO is well placed to help improve the comp etitiveness of the West A frican cotton industry 
and reduce the vulnerability of cotton farmers by strengthening policy and institutional capacity to 
plan and implement actions to reduce production co sts, to improve the sustainability of cotton 
farming, and to increase product quality, value a ddition and efficiency along the supply chain. 
  FAO has a diversity of expertise in econom ics and farm management; plant production and 
pest management; and post-harvest processing and othe r fields, in addition to strong capability in the 
delivery of such assistance programmes, which coul d be brought to bear on the cotton problems in 
West Africa. 
  We would be keen to take part in  multid isciplinary cooperation in which  technical and 
economic experts from FAO could work with other international organizations, research institutes, 
trade and industry as well as with experts from lo cal governments and institutions, with support from 
multi-lateral funding agencies a nd individual donor countries.  
  WT/L/587 
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  An integral part of any assistance should be to  dialogue with stakeholders from the industry, 
from government, and other relevant institutions, to promote consensu s building and participation in 
the definition of the problems, as well as examinati on of proposed solutions by various stakeholders. 
 The components of a programme to boost the productivity and competitiveness of the West 
African cotton sector could include:    Development of capacity for developing a nd implementing sectoral and trade policies and 
strategies to ensure prosperity of the cotton in dustry in African cotton producing countries. Regional 
and country based policy and strategy studies could be conducted on critical factors affecting viability 
of the cotton industry, including policies and stra tegies necessary to ensure compliance with various 
international conventions Policy and strategy work shops would provide part icipants with a better 
understanding of the policies and strategies required to sustain their cotton industries, and an outline 
of the measures required to implement these policies and strategies. 
 
 There are three major components of the co tton supply chain which might be addressed. The 
first is to improve the profitability of cotton pr oduction by identifying and promoting options for 
increasing productivity and reducing production costs, including  flexible management strategies for 
farmers to respond changes in world markets.  
 
 The second component is the performance of th e cotton marketing system. Action could focus 
on marketing costs and efficiency, risk management , inputs access, and models for provision of inter-
linked services.   A third avenue is improving the competitiveness of textiles and clothing industries, 
encouraging the cotton industry to move into exports  of value-added textiles in place of raw materials. 
There are opportunities to expand the downstream co tton industries such as those involved in ginning, 
production of cotton-seed oil, and cottonseed cak e processing for animal feed, as well the more 
upstream cotton-related industries such as textile  manufacturing as well as further processing of 
cottonseed  oil. 
 
 There is substantial scope to improve the pr oduction efficiency of smallholder cotton/cereal 
producers through Integrated Production and Pest Ma nagement (IPPM) that includes elements such 
as: crop rotations and crop residue management, plan t nutrient use in synchrony with crop rotations, 
soil preparation options including reduced tilla ge, weed control; insect and disease management, 
cover-crop establishment (relay systems) to ensu re improved soil manageme nt, harvest optimization 
etc. There are also promising opportunities to e xpand the cropping choices so that cotton has a wider 
range of rotations to permit diversification, whic h is important not only for agronomic sustainability 
but also economic sustainability.     An additional input would be the introduc tion and application of a Good Agricultural 
Practices (GAP) approach to address the economi c, social and environmental dimensions of 
sustainability. Farmers’ Field Schools (FFS) would be  central for building farmer capacities to use 
good agricultural practices. Attention should be gi ven to strengthening the institutional framework 
and services to support promotion of GAPs.   
 To be most effective, assistance would need to link up with the ongoing process under the 
WTO and key regional trade agreements. To this effect, the assistance should also include follow-up 
actions to WTO-Cancun Meeting, specifically by:  
• Studies and analyses of the impact of agricultural and trade policies particularly in developed 
countries on the developments in the world cotton market  
• Studies on strategies to increase profitability of cotton farmers in ACP focusing on the 
adoption of new technologies in cotton production and the role of vertical integration of 
cotton production and textile exports.  WT/L/587 
Page 76 
  
• Support to promote production efficiencies a nd diversification and in post-harvest 
management and marketing,  
 
 FAO stands ready to take part in a progr amme of assistance to ACP cotton-producing and 
exporting countries. We would hope that in doing so we can contribute to an improvement in the welfare and food security of the cotton producing farmers of West Africa.   WT/L/587 
 Page 77 
  
 ANNEX 11 
 
INTERNATIONAL COTTON ADVISORY COMMITTEE 
THE WORLD COTTON MARKET:  A LONG-TERM OUTLOOK 
Carlos A. Valderrama Becerra 
Head Economist  
  
Introduction 
 
 The world cotton market has experienced dram atic changes over the last five decades. 
Consumption of cotton more than doubled from 7.6 million tons in 1950/51 to 18.5 million in 1998/99. The industrial processing of cotton fiber rapi dly concentrated in developing countries. While 
in 1950/51, 28% of world mill consumption of cotto n took place in developing countries; by 1998 the 
share had increased to 77%. Cotton production incr eased along with consumption, and the increase 
was the result of gains in yields, combined with an area dedicated to cotton fluctuating within a rather 
narrow range of 28 to 36 million hectares.   Over the last four years cotton consumption increased by 2.7 million tons, an average increase of 3.4% per year, after ten years of stagnation at around 18.5 million tons. The rapid increase in cotton 
consumption has only been matched by increases in th e early 1980s and is mainly the result of low 
cotton prices relative to prices of competing fibers. Over the next seven years, cotton consumption is 
expected to expand at an annual rate of 1.2%. Despite low prices, world cotton production reached a 
record 21.5 million tons in 2001/02 an d is expected to maintain the pace of consumption growth in the 
next seven years. Three main factors have prom oted increases in cotton production since the mid-
1990s: new technologies, the incorporation of new ar ea dedicated to cotton and government measures. 
These factors are expected to continue to support co tton production in the next seven years, without 
exceeding the large accumulation of stocks registered  in the second part of the 1990s. Consequently, 
world stocks, which averaged 52% of consump tion between 1994/95 and 2000/01, are expected to 
average 41% of consumption over the next seven years.  
 Another influence on prices is the trade of ra w cotton between China (Mainland) and the rest 
of the world. China (Mainland) is the largest pr oducer and consumer of cotton. The very rapid 
increase of mill consumption of cotton in China (M ainland) was supported in the late 1990s by large 
stocks in that country. However, with depleted st ocks, the strength of the Chinese textile industry has 
had to resort to imports of raw cotton in the last two years. It is expected that imports of raw cotton by 
China (Mainland) will average 1 million tons a year over the next seven years, equivalent to 15% of 
world trade in raw cotton.   International cotton prices, as measured by th e Cotlook A Index, have declined overtime due 
to more efficient production practices. During the ten years to 1985/86 international cotton prices 
averaged 75 cents per pound; between 1985/86 and 1994/95, prices averaged 70 cents per pound; and 
in the eight years to 2002/03 prices averaged 63 cents per pound. It is expected that international cotton 
prices will average 60 cents per pound over the next the seven years.  WT/L/587 
Page 78 
  
Final Demand for Textile Fibers 
 
 World textile fiber consumption increased at an impressive pace since the 1950s. From 7.6 million 
tons in 1950, textile consumption increased to 52 million tons in 2002. While about 50% of the increase was 
the result of population growth, the remaining 50% was th e result of higher income per capita levels, declines 
in real textile prices, and competition among fibers wh ich generated new uses for te xtile fibers. However, the 
pace of growth of textile consumption has decelerated gr adually. The average annual rate of growth of textile 
consumption was 3.7% during the 1960s, 3.1% during the 1970s, 2.5% during the 1980s and 2.7% during the 
1990s. Indeed, the growth of the two major economic vari ables that determine textile consumption, income 
and population, has also decelerated.   During the 1990s, consumption of textile fibers in developing count ries continued to increase above 
world average rates and most of this growth was concen trated in Asia. In 1990, 28% of world textile fiber 
consumption took place in Asia, and the share increased to 33.6% by 2002. Gains in share of world textile 
fiber consumption in other devel oping country regions during the same period were not significant, from 
3.8% to 4.2% in the Middle East, from 6.2% to 7.3% in Latin America and the Caribbean and from 3% to 3.4% in Africa. The share of industrial countries of world textile consumption increased by just one percentage point during the twelve-year period to 46%  in 2002. These gains in industrial and developing 
countries occurred at the expense of declines in Eastern Europe and the former USSR, where textile fiber 
consumption as a share of world consumption dec lined from 14% to 5.6% between 1990 and 2002. 
  Long term projections of world GDP and populat ion growth suggest that world textile fiber 
consumption can expand at an annual average rate of 2. 3% over the next seven years to reach 62 million tons 
in 2010. 
 
 In contrast to overall textile fiber consumption, cotton consumption at the end-use level continued to 
concentrate rapidly in industrial countries during the 1990s, essentially in the United States and Canada. 
While industrial countries accounted for 38% of world cotton consumption in 1990 and 44% in 2002, 
developing countries accounted for 48% in 1990 and 52 % in 2002. Eastern Europe and the former USSR 
captured 14% of world cotton consumption in 1990 and 4% in 2002. 
  World cotton consumption increased by 2.6 milli on tons between 1998 and 2002, a four-year rally 
last registered in the early 1980s. Between 1982 a nd 1988, world cotton consumption increased by 4 million 
tons, and then stagnated be tween 1989 and 1997, fluctuati ng around 18.5 million tons. 
 
 Without any doubt, the strong increases in cotton consumption since 1998 have mainly been the 
result of lower cotton prices. Indeed, the Cotlook A Index,  a measure of international cotton prices, averaged 
54 cents per pound between 1998 and 2002, sloping down al most continuously over the period. Further, the 
bulk of cotton sales occur between October and Dece mber in any year, as production in the northern 
hemisphere, which accounts for 90% of world output, is ginned and marketed. The average price between 
October and December in the years 1998 to 2002 was 51 cents per pound. In contrast, prices of 
polyester in the U.S. market averaged 58 cents per pound and, most importantly, sloped upwards over 
the same period. Further, polyester prices in Asia , where most cotton is processed, have also trended 
upwards. Polyester prices in China (Taiwan), as reported by Cotlook Limited, increased from 37 U.S. cents per pound in 1998 to 43.4 cents  per pound in 2001. Taiwanese polyester prices declined to 
39.5 cents per pound in 2002, only to increase to 51 ce nts in April 2003. As a result of these trends the 
annual average relative price of cotton declined by 30% between 1998 and 2002. 
  World cotton consumption reached 21 million tons  in 2003 and is projected to expand at an 
annual average rate of 1.8% to reach 23.6 million t ons in 2010. Cotton's share of the world textile 
fiber market is projected to decline from 39.7% in 2002 to 38% in 2010. 
  WT/L/587 
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 Mill Consumption of Cotton 
 
 Mirroring end-use consumption, world mill c onsumption of cotton was stagnant during the 
first half of the 1990s, growing by only 0. 6% between 1990 and 1997, but increasing rapidly 
thereafter. In the early 1990s, mill consumption of cotton declined dramatically in Eastern Europe and 
the former USSR from 2.5 million tons in 1990/91 to 730,000 tons in 19 98/99, offsetting gains 
elsewhere in the world. Mill consumption of cotto n recovered in that group of countries since 1998, 
increasing to over 900,000 tons in 2002/03. Mill c onsumption of cotton in industrial countries 
remained at about 4 million tons during the early  1990s, but declined rapidly since 1998/99. In 
contrast, mill consumption of cotton in developing countries increased at an annual rate of growth of 
2.9% during the 12 years to 2002/03. As a result, th e processing of cotton continued to concentrate in 
developing countries, and their share of world mill consumption rose from 67% in 1990/91 to 83% in 2002/03, compared to 46% in 1970/71 and 60% in 1980/81. 
 
 The declines in mill consumption of cotton experienced between 199 0/91 and 1998/99 in 
Eastern Europe and the former USSR prevented world cotton and textile consumption from achieving 
greater growth during the first half of the 1990s. M ill consumption of cotton in this group of countries 
in 1998/99 was less than a third of the level of  mill consumption in 1990/91. Imports of cotton 
manufactures mitigated the decline in mill consumpti on but consumption of cotton at the end use level 
registered similar declines. The dramatic declines  in both mill and end-use consumption of cotton in 
Eastern Europe and the former USSR during the 1990s  were the result of similarly dramatic declines 
in economic activity, which in turn caused inco mes to decline. According to data from the 
International Monetary Fund, GDP in that group of  countries contracted every year between 1990 and 
1995 in a range of -0.2% to -12%. Had consumption of cotton in Eastern Europe and the former 
USSR remained at the level of 1989, the world w ould be consuming now 22.8 million tons of cotton. 
  Mill consumption of cotton in industrial c ountries increased from 3.2 million tons in 1980/81 
to 3.9 million in 1990/91, fluctuated in a narrow range of 3.9 to 4.1 million tons between 1990/91 and 
1997/98, and declined rapidly to 2.8 million tons in 2002/03. The declines reflect the increasing 
concentration of cotton processing in developing c ountries that has occurred during the last five 
decades. High labor costs and increased competiti on of imports from devel oping countries have 
caused the cotton textile industries in many indus trial countries to decrease production levels since 
1998/99.  
 Mill consumption of cotton in developing countri es increased at an annual rate of 3.9%, from 
8.5 million tons in 1980/81 to 12 .3 million tons in 1990/91. Growth  of mill consumption decelerated 
during first seven years of the 1990s to an average annual rate of 2.7% reaching 14.3 million tons in 
1997/98, but regained strength since 1998/99, growing at an average annual rate of 5.5% to reach 
17.5 million tons in 2002/03. The bulk of the increase since 1998 occurred in China (Mainland), but important expansions were also re gistered in Pakistan and Turkey. 
 
 For the past five years, China (Mainland) h as been the driving force of the world textile 
industry. Between 1998/99 and 2002/03, additional m ill consumption of cotton in China accounted for 
83% of additional consumption worldwide. The Chinese industry processed 6.5 million tons of raw 
cotton in 2002/03, an increase of 2.2 million t ons since 1998/99. The textile industry in China 
(Mainland) is highly dependent on the export mark et, and can be sensitive to world affairs. 
Nonetheless, low labor costs and Chinese policies ha ve improved the country's competitiveness vis-à-
vis other textile exporting developing countries, an d China (Mainland) has increased its share of 
world textile and apparel exports in the last four  years. China (Mainland) , which surpassed Mexico as 
the second largest source of U.S. textile imports in 2001, surpassed Canada in 2002 and became the 
leading supplier of textile manufactures to the U.S. market. 
 WT/L/587 
Page 80 
   In India, the second largest cotton processing country, mill consumption of cotton between 1990/91 and 1997/98 increased at an average annual rate of 4.3%, or seven times more rapidly than 
world consumption growth. Demand for Indian tex tile products has been supported mainly by very 
strong exports, in particular exports of cott on yarn, which increased from 60,000 tons in 1990 to 
450,000 tons in 1997. Taking a dvantage of relatively low costs of cotton processing, Indian exports to 
other Asian markets increased fast er than to other destinations  between 1990/91 and 1997/98. In 
addition, promotion of exports to the United States, Canada and Mexico, as well as to Latin American 
countries has been developed since 1996. Noneth eless, Indian mill consumption of cotton has 
remained at 2.9 million tons since 1998/99, as it lo st its export markets in Asia due to the Asian 
financial crisis of the late 1990s.   Driven by increasing exports of yarn and fabric  over the last four years, Pakistan surpassed 
the USA as the third largest cotton processing count ry in 2001. Currently, the Pakistani textile 
industry is in a drive to add value to exports, and is modernizing its infrastructure as part of the goal 
of expanding exports of manufactured products. Mill consumption of cotton in Pakistan increased 
from 1.3 million tons in 1990/91 to 1.5 million t ons in 1998/99 and 2.1 million tons in 2002/03. 
  Excluding China (Mainland), India, and Pakist an, mill consumption of cotton in East and 
South Asian developing countries declined at an  average annual rate of 1.2% between 1990/91 and 
1997/98. Increases in Indonesia, Bangladesh, Malaysia , Sri Lanka, the Philippines and Vietnam were 
more than offset by declines in other countries in the region, particularly in China (Hong Kong), China (Taiwan), and the Republic of Korea. Incr eases in labor costs in countries where textile 
production had prospered duri ng the 1980s caused a shift of textile  capacity to lower-cost countries in 
the region. Due to currency devaluations forced  by the Asian financial crisis in 1997, mill 
consumption of cotton in East and South Asia n developing countries excluding China (Mainland), 
India, and Pakistan, increased at an annual aver age rate of 5.1% since 1997/98 to reach 2.2 million 
tons in 2002/03.   In Turkey, mill consumption of cotton increased  at an average annual rate of 10% between 
1990/91 and 1997/98, reaching one million tons. Turkey  has benefited from rapid expansion of 
exports of cotton products to the former USSR a nd Europe. However, despite sharp devaluations of 
the Turkish currency in the last five years and acce ss to the European market as the country became a 
member of the EU Customs Union, mill consumpti on of cotton in Turkey increased at an average 
annual rate of 2.6% in the last five years, as exports to the former USSR greatly diminished and 
exports to the EU faced greater competition from China (Mainland). 
  In Latin America and the Caribbean, mill c onsumption of cotton increased at an average 
annual rate of 2.8% between 199 0/91 and 1997/98. The bulk of the increase took place in Mexico, 
with small increases in some countries being offset by declines elsewhere in the region. The largest 
processor of cotton in Latin America and the Caribbe an is Brazil, where mill consumption fluctuated 
between 720,000 and 830,000 tons  during the period because of a reduction in cotton's share of fiber 
use and increased textile imports. Cotton's share of m ill consumption of textile fibers in that country 
fell from 65% in 1990 to 59% in 1997. Brazil became a net importer of textile products in 1992 and 
has remained a net importer. In contrast, in Me xico, the second largest processor of cotton in the 
region, mill consumption of cotton increased at an  average annual rate of 13% between 1990/91 and 
1997/98. Mexico registered the fastest expansion of any cotton textile industry in the world during the 
mid-1990s, as it became a member of the North American Free Trade Ag reement, which was 
implemented in January 1994 with access to the U.S.  and Canadian markets. Mill consumption of 
cotton in Latin America and the Caribbean continue d to increase through the end of the 1990s due to a 
recovery in Brazil, only to decline below the leve ls of the mid-1990s in the last three years, as 
Mexican mill consumption declined due to comp etition from Chinese products in North American 
markets. 
  WT/L/587 
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  Mill consumption of cotton in Africa declined at an average annual rate of 2.1% between 
1990/91 and 2002/03, reaching 577,000 t ons at the end of the period. Declines took place in the two 
largest cotton processors on the continent, Egypt and Nigeria, while mill consumption failed to 
increase in South Africa and Morocco other impor tant cotton processors. Together these four 
countries account for 65% of African mill consumption.   During the 1990s, mill consumption of cotton became more concentrated in the largest 
processing countries. In 1980/81, the six largest proc essing countries today, China (Mainland), India, 
Pakistan, the United States, Turkey, and Brazil, acc ounted for 51 % of world mill consumption. These 
countries accounted for 57% of world mill consump tion in 1990/91, 69% in 1997/98 and 72% in 
2002/03. Current projections by ICAC suggest that the six largest cotton-processing countries will account for 75% of world mill consumption by 2010/ 11. China will likely continue to register the 
most rapid expansion from 6.5 million tons in 2002/03 to a projected 8.5 million tons in 2010/11. Mill 
consumption in India and Pakistan will likely incr ease by half a million tons in each country over the 
next seven years, while Brazil and Turkey will expand by 100,000 tons each. Declines or no major 
gains are expected in other developing countries. Mill consumption in the United States is expected to 
continue to decline rapidly from 1.6 million tons in 2002/03 to 800,000 tons in 2010/11. Similarly, 
mill consumption of cotton in the EU from 860,000 tons in 2002/03 to 500, 000 tons in 2010/11. 
 
Supply 
 
 During the 1990s, the world cotton market was ch aracterized by stagnant supply, which resulted 
in prices above average between 1993 and 1997. Worl d cotton production failed to increase due to 
problems associated with diseases , resistance to pesticides, an d disruption of production due to 
economic reasons. Increases in cotton production betwee n the 1950s and the 1980s was possible due to 
improvements in yields, which in creased from a world av erage of 233 kilograms per hectare in 1950/51 
to 574 kilograms in 1990/91. World area dedicated to cotton has fluctuated since 1950/51 between 
28 million hectares and 36 million hectares, utilizing between 2.2% and 2.6% of the world's arable land. As yields failed to increase during the 1990s, so  did production. As a result, the Cotlook A Index 
averaged 80 U.S. cents per pound in the period 199 3-1997, well above the average of 71 cents per 
pound registered by cotton prices since the mid-1970s.  Price declines in the second half of the 1990s 
seemed to be justified by increase d production after years of relativel y high prices in the middle of the 
decade. Yet, production continued to increase by the end of the 1990s and into the new decade despite 
sizable reductions in prices. 
 
 An important factor that promoted increases in cotton production despite relatively low prices 
was the strengthening of governme nt policies regarding cotton. Di rect income and price supports 
worldwide are estimated by ICAC to have increase d from US$3.8 billion in 1997/98 to US$5.8 billion 
in 2001/02. Direct income and price supports worldwid e are estimated by ICAC to have declined to 
US$3.8 billion in 2002/03. Increases in income a nd price support mechanisms have maintained 
production in subsidizing c ountries by between 300,000 tons to 3.9 million tons a year above what 
otherwise would have been produced in the last se ven years. Subsidies deepen the decline in cotton 
prices and increase the length of the cycle of cotton prices. 
  New technologies, more extensive use of exis ting technologies, and ne w areas dedicated to 
cotton cultivation, have changed the structure of the world cotton market since the mid-1990s and 
contributed to promote world production since 1997/98. By shifting the supply of cotton to the right, these new factors in cotton cultivation allow production to respond more efficiently to the expansion of 
demand, while enhancing the economi c viability of cotton production. 
  Among the new technologies, the most visible is genetic engineering of co tton. It is estimated 
that 21% of world cotton area was planted to geneti cally engineered (GE) va rieties in 20003/04, up from 
just 2% in 1996/97. GE cotton is commercially  approved and grown in nine countries, namely, 
Argentina, Australia, China (M), Colombia, India,  Indonesia, Mexico, South Africa, and the USA, but 
its use concentrates in Australia, China (Mainland) and the United States. As this technology is offered WT/L/587 
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  at lower prices, it is expected to spread to other countries. Area dedicated to GE cotton varieties is expected to climb to 40% of world area by 2007/08, accounting for 50% of cotton production. GE 
cotton lowers the use of insecticides  and, although it does not guarantee that cotton yields will be higher 
than with a non-GE variety, it might lower the cost of production. The most signi ficant impact of the use 
of GE cotton has occurred in China (Mainland), wher e the adoption of GE cotton in the Eastern part of 
the country has significantly reduced damage from insects, lowered production costs and increased the 
income of growers. The increased use of other ex isting technologies and cr op management techniques 
has also contributed to contain the cost of produc ing cotton and to increase world cotton production. 
  The use of new area dedicated to cotton production has also contributed to increased world 
production. It is estimated that new area dedicated to cotton production over the last decade in Mato 
Grosso Brazil and Southeast Turkey contributed 730,000 tons of additional world cotton production in 2002/03, with an average yield of over 1.3 tons per hectare, twice the world average. 
 
 Yet another factor that promoted cotton production despite relatively low prices was the 
appreciation of the U.S. dollar between  1995 and 2001, which partly offset  declines in pr ices in countries 
where the currency devaluated, maki ng cotton prices in domestic curren cy more attractive. Between 1998 
and 2001 the U.S. dollar appreciated by 30% against th e Australian dollar, 90% agai nst the Brazilian reais, 
25% against the CFA franc and 500% against the Turkish lira. Nonetheless, the streng th of the U.S. dollar 
came to an end in early 2002. In th e year to February 2003, the U.S. dollar lost 19% against the CFA franc 
and 14% against Australian dollar.   Cotton is produced in about one hundred countrie s, but production has traditionally concentrated 
in a few of them. Over the last th ree decades, the four l eading producing countries have accounted for an 
increasing share of world production. China (Mainlan d), the United States, India and Pakistan accounted 
for 48% of world production in 1970/71, 52% in 1980/81, 61% in 1990/91, 63% in 2000/01 and 66% in 2002/03.   Within industrial coun tries, cotton is produced in the Unite d States, Australia, Spain and Greece, 
and accounted for 19% of world production in 1980/81, 21% in 1990/91, 26% in 2000/01 and 23% in 
2002/03. Developing countries accounted for 61% of world production in 1980/81, 65% in 1990/91, 67% 
in 2000/01 and 68% in 2002/03. Nonetheless, the share of world cotton production in developing countries, excluding Chin a (Mainland), India and Pakistan, decl ined from 26% in 1980/81 to 22% in 
1990/91 and 2002/03. Cotton production in the former  USSR declined during the last two decades and 
accounted for 19% of world pr oduction in 1980/81,14% in 1990/91 and 8% in 2002/03. 
  Cotton production in China (Mainland), the largest producer, fluctuated within a range of 3.7 to 
5.7 million tons during the 1990s. During the 1980 s, Chinese production increased at an average annual 
rate of 5.2%. However, production in most years was lower than at the beginning of the decade. In 1990/91 
and 1991/92, Chinese production seemed to  be following the trend of the 1980s. International prices above 
80 cents and favorable climatic conditions promoted gains in Chinese production, which reached 
5.7 million tons in 1991/92. The production outlook changed radically in subsequent years. Production fell due to a decline in yields caused by increased pest pressure  in the Eastern part of the country and a 
subsequent decline in area. More efficient pest contro l management and a shift of area from the east to the 
west of the country, mainly from Hebei and Shandong to  Xinjang, sustained the le vels of production above 
4 million tons in the mid 1990s. Over the last four  years, increases in Chinese production has been 
sustained by government policies th at maintain domestic prices above international prices and by increases 
in yields due to the adoption of GE cotton, which reduced damage from insects and increased yields in the 
Eastern part of the country to the levels of the 1980s.   Since September 1999, new policies in China (Mai nland) allow domestic cotton prices to be 
influenced by market factors. The government still sets a reference pr ice for cotton, but actual prices can 
now be negotiated between buyers and sellers. Before  September 1999, the prices set by the government 
were consistently above internationa l prices. Nonetheless, despite the re form, which allows  state mills to 
procure cotton directly from farmers and an addition al policy of reduction of stocks, domestic prices  WT/L/587 
 Page 83 
  
 continued to be above international prices due to re strictions on the importation of cotton. Production for 
local consumption and export is subsidized in Chin a (Mainland) through direct financing made by the 
central government to exporting and local agencies, designed to bridge the difference between 
international market prices and th e internal cost of buying, ginning and transporting cotton to an export 
or mill location. As a result, Chinese production in 200 1/02, a year when prices reached the lowest level 
in over 30 years, increased to 5.3 million tons, the largest crop since 1990/91. Cotton production in 
China (Mainland) declined in 2002/03 to 4.9 million t ons but is expected to expand over the next seven 
years to 6.8 million tons in 2010/11, still 83% of the expected need of the local cotton textile industry. 
Because of the rapid expansion of its textile indust ry, China (Mainland) became a net importer of cotton 
in 2001/02 and is expected to remain a net importer over the next seven years. 
  In the United States, cotton production increase d from 2.4 million tons in 1980/81 to 3.3 million 
tons in 1990/91, and, with the exception of 1998/99,  production fluctuated between 3.5 and 4.3 million 
tons during the 1990s. Production in 1998/99 was seve rely affected by drought and reached 3 million 
tons. As international pri ces deteriorated in the late 1990s, the existing government policies resulted in 
higher subsidy payments, and production increased in th e following three years to reach a record high of 
4.4 million tons in 2001/02 (which in turn created further downward pr essure on international prices). 
By 1997/98, the United States exported 40% of domest ic production, while 60% was sold to domestic 
mills. Because of the rapid deterioration of the U.S. textile industry in the last five years, more cotton 
was sold in internationa l markets and U.S. exports represented 69% of the local production in 2002/03. 
As a result of the loss of the domestic market, U. S. production declined below 4 million tons in 2002/03 
and is expected to continue to declin e to about 3.5 million tons by 2010/11. 
  Cotton production in India rose from 1.3 million tons in 1980/81 to a record 3.0 million in 
1996/97, mostly because of an increase in yield. Thereafter, production fluctuated downwards to 
2.3 million tons in 2002/03 because of lower prices, po or weather and disease. The cotton yield in India 
climbed from 170 kilograms of lint per hectare in 1980/81 to a record 330 kilograms in 1996/97, but 
since then has fluctuated around 300 kilograms per hect are. Gains in yields in  India were tied to 
improved availability of cotton planting seeds and chemical inputs, but yields remain well below 
averages of most other countries. Despite the rise in  cotton production in India, growth in mill use meant 
that cotton remained in tight domestic supply, and pr ices paid to growers incr eased in real terms during 
the 1980s and 1990s. Still, low rates of adult literacy in the non-urban popul ation result in low levels of 
technical knowledge in the agricultura l sector. Yields in India are not expected to improve over current 
levels in the next seven years and production is likely to be 2. 9 million tons by 2010/11, some 
300,000 tons short of the projected needs of the local textile industry. 
  Production in Pakistan expanded rapidly dur ing the 1980s, growing from 700,000 tons in 
1980/81 to 2.2 million tons in 1991/92. However, production fell in 1992/93 and has remained well 
below the 1991/92 level since. The rise in produ ction during the 1980s was mostly the result of 
increases in yields resulting from better methods of pe st control, improved seed varieties and expanded 
use of fertilizer. The leaf curl virus spread thr oughout the Punjab growing areas in the late 1980s and 
early 1990s, and by 1992/93 the virus ha d a devastating effect on yields . By the late 1990s, the virus had 
been controlled through better mana gement of pests and the adoption of  resistant variet ies of cotton. 
Average yields in Pakistan rose from 340 kilogram s per hectare in 1980/81 to 770 kilograms in 1991/92, 
but were no higher than 600 kilogr ams through 1999/00. In the last thre e years, production in Pakistan 
has not surpassed 1.9 million tons and is expected to  remain at about that level over the next seven 
years. Production in Pakistan will likely fall half a mi llion tons short of the pr ojected needs of the local 
textile industry by the end of this decade.   As suggested above, the world cotton market wi ll likely expand to 23.6 million tons in 2010/11, 
and expected increases in production in the four la rgest producing countries account for half of the 
projected increase in world pr oduction between 2002/03 and 2010/11, equivalent to 2 million tons of 
additional production. Other increases will likely come  from Africa, Brazil, and Turkey, and recovery in 
Australia and countries in Latin Am erica other than Brazil. Along with  production in th e United States, 
further declines will likely o ccur in the European Union. WT/L/587 
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    In Africa, cotton production increased from 1.3 million tons in 1990/91 to a record 1.8 million 
tons in 1997/98, but low cotton prices have prevente d production in that continent from surpassing that 
level in the last six years. In 2002/03, Africa pr oduced 1.7 million tons and is expected to produce 
2.2 million tons by 2010/11. French speaking countrie s in west and central Africa produced 1 million 
tons in 2002/03, accounting for 56% of production in th e continent, and have th e potential to increase 
production to 1.3 million tons by 2010/11, or 59% of total production in the continent. 
  
 Cotton production in Brazil declined rapi dly between the mid 1980s and the mid 1990s, 
recovering in the second half of th e decade because of shifting of pr oduction to new areas in the south 
west of the country, particularly  in the state of Mato Grosso . Production, which declined from 
965,000 tons in 1984/85 to 310,000 tons in 1996/97, climbed back to 940,000 tons in 2000/01. Low prices prevented production in Brazil from increasi ng in the first two years of the new decade, and 
production reached 850,000 tons in 2002/03. Production in Brazil is expected to  increase to 1.2 million 
tons by 2010/11, accounting for 67% of produc tion in Latin America and the Caribbean. 
  As a result of a shift in area from the south to the eastern part of the country, where an irrigation 
project known as the GAP project is being develope d since the mid 1990s, cotton production in Turkey 
increased from 650,000 tons in 1990/91 to 900,000 tons in  2002/03, and is expected to increase to over 
1 million tons by 2010/11.   Cotton production in Australia is  essentially 25 years old and in creased very rapidly during the 
1980s and 1990s, from 100,000 tons in 1980/81 to 800,000 tons in 2000/01. A lack of water has kept 
Australian cotton production from increasing more than it has, and in some years has caused dramatic 
production declines. One such year is 2002/03, wh en production declined by 48% to 380,000 tons. 
Australian production is expected to recover to about 800,000 tons by 2010/11. 
  Excluding Brazil, cotton production in Latin Amer ica and the Caribbean declined rapidly during 
the 1990s and into the new decade, from 1 milli on tons in 1990/91 to 245,000 tons in 2002/03. The 
decline was the result of an erosion of the local textile market, which faced increased competition from 
imports throughout the 1990s, combined with low co tton prices in since 1998/99. Cotton production in 
Latin American countries, excluding Brazil, is likely to recover pa rtially over the next seven years to 
600,000 tons in 2010/11.  
 Cotton production in the European Union (EU) increased from 300,000 tons in 1990/91 to 
475,000 tons in 2002/03, mainly reflecting increases in  Greece. During the 1990s cotton production in 
the EU was supported by subsidies. However, rece nt changes in the subsidy program offered to 
growers, which convert a proportion of total subsidies into de-coupled payments to growers, is likely 
to reduce EU cotton production to about 200,000 tons by 2010/11.  Prices  
 International cotton prices, as measured by th e Cotlook A Index, averaged 63 cents per pound 
between 1995/96 and 2002/03, down from an average of  70 cents per pound in the previous ten years. 
Several factor have been described that influen ced the decline in long-term average prices, among 
which are new technologies, more extensive use of existing technologies, and new area dedicated to 
cotton. During the 1990s another factor that de pressed prices was the strengthening of government 
policies in various countries.   As with any other commodity, year-to-year ch anges in cotton prices are driven by changes in 
supply and demand, which is usually expressed as a ratio between stocks and use. The ICAC uses a 
price model that utilizes such a ratio for the wo rld excluding China (Mainland), and expresses supply 
and demand conditions in China (M ainland) affecting internationa l prices with a variable that 
represents Chinese net trade in raw cotton as a proportion of consumption.   WT/L/587 
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  Because of the increasing importance of China (Mainland) to the world cotton market, net 
trade between that country and the rest of the world has played, and will continue to play, an 
important role in determining cotton prices. The IC AC Price Model suggests that a change of just 
50,000 tons in Chinese net trade can move season average international cotton prices by one cent. 
China (Mainland) has influenced increases and d eclines in season average cotton prices over the last 
three decades, as it has turn ed into a net importer or net exporter of raw cotton. For instance, during 
the mid 1990s, dramatic increases in Chinese imports of  cotton, drove prices to nearly record highs, 
where as during the late 1990s, the position of China (Mainland) as a net exporter of cotton resulted in 
downward pressures on prices. The rapid expansion of the Chinese textile industry over the last four 
years has changed the Chinese trading position from net exporter to net impor ter of cotton, and in 
2002/03 net imports of cotton by China (Mainland) we re half a million tons, the first sizable upward 
impact on prices since 1996/97. This year, 2003/04, Chin a (Mainland) is expected to be a net importer 
of 1.5 million tons, and net imports are projected to average one million tons a year over the next 
seven years, providing upward pressure  on cotton prices during the period. 
  In contrast, the stocks-to-use ratio in the rest  of the world increased almost continuously since 
1993/94, when at 0.36 contributed to price increase s in the mid1990s. The stocks-to-use ratio in the 
world excluding China (Mainland) increased to abov e 0.50 in 2001/02 and 2002/03, and is expected 
to average 0.58 over the next seven years. 
  As a result of increased net imports by Chin a (Mainland) and projected increases in the 
stocks-to-use ratio in the rest of the world, intern ational cotton prices are expected to average 60 cents 
per pound over the next seven years.  WT/L/587 
Page 86 
  
 
COTTON LINT SUPPLY AND USE IN WORLD TOTAL 
 
 
Years Beginning August 1 
 
 AREA YIELD PRODUCTION IMPTS CONSUMPTION
 000 Ha Kgs/Ha 000 Metric Tons 
1950/51 28,537 233 6,645 2,724 7,638
1960/61 32,445 314 10,201 3,804 10,231
1970/80 31,778 369 11,740 4,086 12,173
1980/81 33,667 411 13,831 4,555 14,215
1981/82 33,948 442 14,991 4,405 14,147
1982/83 32,569 445 14,479 4,350 14,4521983/84 32,137 451 14,499 4,617 14,6551984/85 35,217 547 19,247 4,602 15,108
1985/86 32,792 532 17,461 4,763 16,589
1986/87 29,503 518 15,269 5,516 18,1981987/88 31,238 564 17,609 5,094 18,1171988/89 33,522 546 18,301 5,654 18,4701989/90 31,640 549 17,365 5,431 18,675
1990/91 33,049 574 18,978 5,220 18,574
1991/92 34,710 596 20,677 6,497 18,637
1992/93 32,248 556 17,941 5,690 18,635
1993/94 30,435 554 16,861 5,766 18,4961994/95 32,112 584 18,762 6,458 18,3781995/96 36,066 564 20,330 5,806 18,455
1996/97 34,195 573 19,584 6,138 19,093
1997/98 33,828 594 20,080 5,738 19,032
1998/99 32,869 569 18,692 5,414 18,457
1999/00 31,953 597 19,070 6,050 19,610
2000/01 31,890 609 19,437 5,747 19,844
2001/02 33,416 643 21,485 6,159 20,283
2002/03, estimate 30,003 643 19,302 6,573 21,115
2003/04, forecast 32,618 620 20,217 6,943 21,005
2010/11, forecast 33,643 704 23,675 6,727 23,612
   
ICAC 3/15/04      
      
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ANNEX 12 
 
INTERNATIONAL MONETARY FUND  
 
 
CHALLENGES FACING LOW-INCOME  COTTON-PRODUCING COUNTRIES 
 
Cyrille Briançon 
 
Division Chief 
 
 
 
Introduction 
Over recent years, the significant subsidies gr anted to cotton producers in industrial countries 
have depressed world cotton prices and reduced revenu es for producers in developing countries. As a 
result, the latter countries’ opportunities for grow th, development, and poverty reduction have been 
lowered. The issue was brought to the fore at th e WTO Ministerial meeting in Cancun, when four 
African countries (Benin, Burkina Faso, Chad, and Mali) demanded that industrial countries eliminate cotton subsidies and compensate African cotton-producing countries for their loss of income. While no agreement was reached in  Cancun, there has been renewed discussion since then of whether and, if 
so, how support might be provided to cotton-produci ng countries in Africa. Hence, the International 
Monetary Fund is very pleased to participate in  this workshop organized by the WTO and to 
contribute to the debate on that issue.  
The International Monetary Fund (“the Fund”), together with other international financial 
institutions (IFIs), has pressed and will continue  to press for industrial countries to remove 
agricultural subsidies, including for the cotton sector, and open their markets to exports from low 
income countries. This represents for the Fund a prior ity issue in the development agenda. It has also 
become a test of industrial countries’ commitment to the development objectives of the Doha Round. 
At the same time, the Fund will continue to enc ourage cotton-producing countries to push ahead with 
reforms to improve the efficiency of their cotton sectors, diversify production, and introduce market-
based mechanisms to stabilize farm ers’ incomes. The IFI’s can also provide advice and assistance 
with these reforms. Considering the Bretton Woods institutions in particular, the World Bank would 
continue to take a lead role in supporting structural reforms to th e cotton sector, while the Fund for its 
part, can support countries in managing balance of payments imbalances and adjustment needs—
including those that may stem from the volatility in cotton prices.   
This paper provides a brief review of economic  developments, policy ch allenges, and reform 
directions in cotton-producing countries. 
The increasing importance of the cotton sector  
The cotton sector in West and Central African  countries has expanded rapidly over the last 
40 years, with cotton production doubling on aver age every decade since the 1960s (Figure 1). As a 
result, the CFA Franc zone’s share of world out put has grown from around ½ a per cent in 1960 to 
close to 5 per cent at present. Furthermore, with al most all this output being exported, the region’s 
share of global cotton exports has also increas ed significantly—reaching around 15 per cent currently. 
Also noteworthy, though, are some periods wher e growth in the cotton sector has been far from 
steady, including stagnation in the early 1990s, ra pid growth following the devaluation of the CFA 
Franc in 1994, and a sharp fall in output in 2000 owing to drought, mismanagement in some public ginning enterprises and low producer prices.  WT/L/587 
 Page 91 
  
 As a result of the overall upward trend in output and exports, the m acroeconomic importance 
of cotton production and associated activities—incl uding ginning, input supply, transportation, and 
marketing—has increased significantly. This is refl ected, for example, in the growing impact of the 
cotton sector on GDP, rural employment and devel opment, external balances, and government 
revenues. For example, cotton exports currently acc ount for around 2/3 of goods exports in Burkina 
Faso and Benin, or 5 to 6 per cent of GDP. Cotton exports also account for 6 per cent of GDP in Mali, 
the largest producer in the region, although gold h as recently taken over as this country’s leading 
export earner. 
Challenges facing low-income  cotton-producing countries 
Despite this rapid growth in production and ex ports of cotton, West and Central African 
countries continue to face a range of development challenges. For example, these countries remain 
among the poorest in the world, with growth—although picking up in most cases since the mid-1990s—still well below the rates needed to make substantial and rapid inroads on poverty. The 
climate for foreign and domestic investment is  not sufficiently favorable, and hence does not 
encourage development of value-added processing of  primary products, including cotton, or support 
broader diversification of economic activities.   
The cotton sector in African economies faces a num ber of specific challenges. These stem in 
part from industrial country subsidies and trade rest rictions, which have limited the scope for African 
countries to exploit their comparative advantage in growing cotton. But the difficulties facing cotton 
producers—and the most appropriate forms of ex ternal support for the countries concerned—also 
need to be viewed in a broader context. Three issues stand out: 
− the substantial year-to-year volatility in cotton prices . Research indicates that the most 
systematic source of volatility has been fluctu ations in income and demand growth among 
industrial country consumers. However, the degree of volatility also reflects in part the impact 
of subsidies granted to producers in some c ountries. In effect, subsidies have provided 
producers with incentives to mainta in supply at a given level even in the face of declining 
demand and prices—hence driving prices even lowe r. Prices have also fluctuated significantly 
for other reasons over recent decades. For exampl e, the oil price shocks of the 1970s led to 
sharp rises and then falls in cotton prices. In  addition, economic policy changes—such as the 
large reduction in U.S. cotton stockpiles in the mid-1980s, and more recently in other 
countries—have led to sharp, short-lived, falls in prices.  
− ratios of domestic producer prices to interna tional prices that vary substantially from 
country to country.  For example, cotton prices received by farmers in India and Zimbabwe 
are generally higher than those in West Africa;  this was particularly the case following the 
devaluation of the CFA Franc in 1994. Within West Africa, price ratios received by farmers 
in Benin and Côte d’Ivoire ha ve often been higher—countries where cotton sector reforms are 
at a more advanced stage. Such comparisons need to be viewed cautiously, however, given 
that cotton companies have often made use of  their monopoly positions to provide various 
public services or below-cost inputs to producers.  Nevertheless, it is important to recognize 
that, as with all monopolies, the inefficiencies in herent in the vertically integrated market 
structure of African cotton production do appear to imply a persistent loss of revenues for 
producers.  
− the long-term trend decline in real cotton prices  (Figure 2). Again, this trend is partly a 
result of supply increases driven by cotton subs idies, which have allowed production to be 
maintained and sometimes increased in what would otherwise be marginal areas. But the 
long-term fall in prices owes more to other supply factors as well as to demand side influences. In particular, technological progress, including better fertilizers, pesticides, and seed types, has boosted cotton yields; the relativ e prices of substitutes (especially man-made WT/L/587 
Page 92 
  
fibres) has declined; and cotton markets have b een hit by the generally low income elasticity 
of demand that characterize primary products . The end of the quota system under the WTO 
Agreement on Textiles and Clothing, on the othe r hand, is expected to provide a structural 
boost to cotton demand and prices. 
Responding to these challenges  
How can the international community—and the Bretton Woods institutions in particular—
best respond to this mix of short- and long-term difficulties faced by cotton-producing countries, and 
what policy responses are needed  from the countries themselves? 
As emphasized in the introduction, the Fund w ill continue to press industrial countries to 
eliminate agricultural subsidies, including for cotto n, and to open their markets to products coming 
from low-income countries. By removing a key impe diment to economic development, such reforms 
would represent a significant and enduring cont ribution from the industrial countries toward 
improving prospects for sustainable growth among developing countries.  
Other forms of support from the Fund can also be considered. In general, the Fund’s main 
instrument for supporting low-income countries is its  Poverty Reduction and Growth Facility (PRGF). 
Arrangements under the PRGF support governments’ macroeconomic programs directed at achieving 
sustainable adjustment in response to balance of paym ents difficulties of a structural character. In this 
regard, PRGF-supported programs seeks to provi de a consistent framework integrating 
macroeconomic and structural policies that will c ontribute to enhancing prospects for sustainable 
growth and reductions in poverty. More broadly,  programs supported by the Fund reflect economic 
policies set out in countries’ Poverty Reduction Stra tegy Papers (PRSPs), prepared by each country 
through a broad-based participatory process.  
While the Fund is prevented under its Articles of Agreement from providing assistance to 
specific sectors, it can support countries facing balance of payments shocks, including those 
emanating from the cotton sector. Fund staff are considering how the need s of cotton-dependent 
countries could be given more explicit recognition,  and how the Fund could underscore its willingness 
to consider, within the framework of the PRGF, in creased financing should a need arise as a result of 
unexpected shocks to the balance of payments.   
There are precedents to the use of such an approach—notably in the cases of Mali and Chad 
in 2001 where, following a fall in cotton prices, th e IMF Board authorized an augmentation of these 
countries’ access to PRGF resources. From this pers pective, the main point of the approaches under 
consideration would be to provide a more explicit, advance indicati on of the Fund’s intentions for 
countries with macroeconomic programs s upported by arrangements under the PRGF.  
The need for a broader response to exogenous shocks
 
Such support from the Fund would however addres s only part of the difficulties faced by low-
income cotton-producing countries. In particular, the challenges faced by the cotton sector—together 
with problems that have arisen with past attemp ts to support cotton producers (see below)—have led 
to widespread appreciation of the need for deeper , longer-lasting, and more predictable approaches to 
reform and assistance. In particular, there appears to have been a growing do mestic and international 
consensus surrounding a reform strategy to increase producers’ participation in management of the 
cotton sector, improve the share of export earnings received by producers, reduce systemic risk, and 
improve governance. This strategy has the following key elements: 
− Spinning off to the private sector the non-core activities of the cotton parastatals—including 
extension services, transport activities, purchase and distribution of inputs and equipments, and marketing of seed cotton and cottonseeds.   WT/L/587 
 Page 93 
  
 − Reinforcing the technical and commercial cap acities of farmer associations so they can 
directly contract for bank credit through a pr ivate sector-based recovery system which links 
repayment of credit to the marketing of the seed cotton. Such efforts n eed to be backed by 
broader institutional reforms—including to suppor t the development of collateral mechanisms 
and the enforcement of contracts.  
− Introducing competition by opening up the sector to private ginneries. In most cases, this 
would require privatizing ginneries that are owne d by the parastatals. In addition, marketing 
of fibre needs to be performed through transparent and competitive bidding processes. 
Competition in ginning, as well as in input supply and marketing, need not end at the border:  
closer regional integration—which would incr ease the scope for cross-border transactions in 
seed cotton, for example—would also help to im prove efficiency and returns to producers.  
− Developing appropriate risk management strate gies—including methods of reducing the risks 
associated with commodity price and exchange rate  fluctuations. There is a considerable need 
for cotton-producing countries in Africa to build  up their expertise in risk management—an 
area where the private sector has a clear comparative advantage. 
The IFIs are providing advice and assistance in th ese structural reforms to the cotton sector—
the World Bank taking the lead role, consistent with  its mandate. The Fund has also been, and is likely 
to remain, closely involved in monitoring and advising on these reforms in coordination with the 
World Bank, given the systemic importance of the cotton sector in the countries concerned and hence 
its impact on overall macr oeconomic performance. 
Looking beyond these structural measures directed at the cotton sector, the long-term decline 
in cotton prices highlights the need for cotton-prod ucing countries to pursue broad-based reforms to 
improve the environment for strong, sustainable gr owth led by the private sector. The Bretton Woods 
institutions will continue to provide advice and assi stance in support of such reforms—guided, for an 
increasing number of countries, by the framework for broader economic development set out in the Poverty Reduction Strategy Papers.  
Alternative approaches to support cotton producers  
 
The consensus that has emerged in favor of the reform strategy outlined in the previous 
section is based in part on difficulties observed with other approaches to countering the adverse 
effects of price fluctuations, supporting pro ducers’ incomes, or promoting overall economic 
development. For example, in many cotton- producing countries in Africa, state owned 
monopoly/monopsony cotton companies have in the p ast (and still today in some cases) provided a 
degree of price assurance to growers. This has gene rally involved setting a base price at the beginning 
of each season, followed by additions to or withdraw als from a stabilization fund if the market price at 
the end of the season turned out to  be higher or lower, respectivel y, than this initial price. An 
alternative approach that has been considered woul d involve direct income support to producers, akin 
to a social safety net.  
Such arrangements create a number of concerns, however: 
− Fiscal risks:   Price and income guarantee schemes risk creating costly and open-ended fiscal 
commitments. For example, when price stab ilization funds have been depleted—whether 
through prolonged periods of low prices, mism anagement, or other reasons—state budgets 
have often been called on to make up for losses and meet commitments to farmers. In Mali, 
for example, the fiscal cost of support to the cotton sector amounted to up to 2 per cent of 
GDP during 2001 to 2003.  WT/L/587 
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− Market distortions and governance problems:   Price guarantees, whether in industrial or 
low-income countries, shelter producers from important signals and incentives coming from 
markets, notably signals pointing to the need  for lower production. Moreover, the benefits 
from these arrangements have tended to go disp roportionately to large producers, and the 
associated stabilization funds have been prone to mismanagement and abuse. Income support 
schemes tend to weaken incentives for improvement s in productivity, and may lead farmers to 
start production on marginal land so that they can become eligible for support.  
− Equity concerns:  Income support schemes targeted just at cotton producers are difficult to 
justify in countries where poverty is widesp read. The same concern applies to price 
guarantees that consistently require d supplementary budgetary support.  
Finally, some attempts have been made to acc elerate diversification and development through 
investment incentives targeted at specific industri es or sectors, particularly through public subsidies 
and tax exemptions. This approach is also pr oblematic, however, especially as pressures for such 
assistance often come from areas where the country concerned does not have an underlying 
comparative advantage. Hence, these activities may be sustainable only if backed by ongoing public 
support. A key concern is that the budgetary res ources used to fund these incentives could instead be 
directed toward areas such as education, health, a nd infrastructure investment that are needed to 
underpin sustainable growth. 
Conclusions 
This paper has outlined a number of measures th at could assist low-income cotton-producing 
countries, including by strengthening the cotton sect or itself and by providing a platform for broad-
based sustainable development. Such measures need both international and domestic backing. 
Internationally, a key requirement is to reduce in dustrial country cotton subsidies and to expand 
market access to developing countries’ output. Th e international community can also provide advice 
and financial assistance to cotton-producing countri es, and the paper indicates how the Fund, for its 
part, could provide a clearer signal of its intent ions to support adjustment in these countries. 
Cooperative external and domestic efforts are also needed to support structural reforms in cotton-
producing countries. In part, these reforms would be directed toward improving competition and 
productivity in this sector, hence improving return s to growers. More generally, ongoing reforms—
again backed by domestic and international s upport—are needed to promote diversification and 
growth, particularly by strengthening instituti ons, human resources, and basic infrastructure.  WT/L/587 
 Page 95 
  
 Figure 1: Cotton Production
(thousand tonnes)
020040060080010001200
1960 1970 1980 1990 2000 2004 (proj)0500010000150002000025000
World  (right scale)
CFA Franc Zone (left scale) 
Figure 2: Cotton Prices
0.00.51.01.52.02.53.03.54.0
19601962
1964 1966 1968 1970 197219741976 1978 1980 1982 1984
1986 1988 1990 1992 1994 19961998
2000 2002
2004 (proj.)US Dollars per kilogramReal
Nominal
Sources: Baffes (2004), ICAC 
 WT/L/587 
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ANNEX 13 
 
INTERNATIONAL TRADE CENTRE 
UNCTAD/WTO  
 
DEVELOPMENT OF THE COTTON SECTOR IN AFRICA 
 
POSSIBLE TECHNICAL ASSISTANCE BY ITC 
 
 
 
What is ITC? 
 
 ITC is a technical cooperation organization w hose mission is to support developing countries 
and transition economies, and particularly their busin ess sectors, in their efforts to realize their full 
potential for developing exports and improving impor t operations, with the ultimate goal of achieving 
sustainable development.  ITC’s efforts are focussed  on the priority sectors that have a high potential 
for export growth, development and diversification.  
 
 ITC support takes the form of information, tr aining and advice. Its ultimate ‘client’ is the 
business community and more specifically, that segme nt of the business community with the greatest 
potential for export growth and the great est need for export-related support: the small- to medium-
sized enterprise  (SME). However, to ensure widest possi ble impact of its technical assistance, ITC 
works directly with ‘multiplier organizations’ or Trade Support Institutions (TSIs) rather than 
individual firms.  
 
ITC has five organizational goals which are: 
 
• To facilitate the integration of developing/ transition economy enterprises into the world 
trading system.  
• To support national efforts to design and implement trade development strategies. 
• To strengthen key trade support services, both public and private. 
• To improve export performance in sectors of critical importance and opportunity. 
• To foster international comp etitiveness within the business community as a whole, and the 
small and medium-sized enterprise (SME) sector in particular. 
 
 In achieving these goals, ITC focuses on national and regional capacity-building  within the 
public and private sector TSIs, which activities ar e critical to the competitiveness of the SME 
 
The cotton sector: products which could be covered by ITC 
 
• Raw cotton, including organic cotton. 
• Cotton by-products: cotton seed, cottonseed oil, cottonseed oilcake and meals. 
• Value-added products using cotton:  yarn, fabric and clothing. 
  WT/L/587 
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Potential trade related technical assistance by ITC for the development of the cotton sector 
 
 ITC’s specific technical cooperation activities are demand-driven. Therefore, detailed needs 
assessment in close cooperation with national c ounterparts would be the starting point for the 
development of specific technical assistance pr ogrammes and projects that would help address 
priority needs to support the export development of cotton, cotton by-products and value added 
products derived from cotton. 
  Activities proposed by ITC could be undertaken either at national, s ub-regional or regional 
levels. Multi-country activities can also be planned to complement specific country level activities.  
  Financial resources will be required to enable ITC to develop technical assistance 
programmes and projects to address priority needs as identified and implement them.  
 
1. At national level  
 
 ITC could offer technical assistance solutions using a wide range of tools and services to help 
build the capacity of Trade Support Institutions (TSIs) and to assist SMEs benefit from the growing 
international markets.  By providing TSIs with ta ilor made advice, the required tools, and the 
dedicated training on their use, ITC ensures that the ca pacity at national level can be sustainable in the 
long run.   
1.1 Capacity building at institutional level:  
 
• Strategic and operational market analysis
: This entails an analysis of trade flow statistics, 
using ITC’s tool TradeMap , to assess trade performance at sector and product levels. This 
provides an assessment of multilateral/bilatera l trade potential and help identify priority 
markets for export development of cotton and co tton products. This will help decision makers 
and producers to focus their efforts, especially in  view of the phase out of textile and clothing 
quota in 2005 that will have an impact on majo r destination markets likely to be found in 
large Asian developing countries. Training will be  provided to all stakeholders on how to use 
the TradeMap  tool and to interpret the analytical tables it produces.  
 
• Market Access assessment and simulation tool : Decision makers in the cotton sector can use 
the ITC Market Access Map - MacMap  to assess market access conditions. The MacMap  
simulation function can also help cotton producing countries better understand the 
implications of change for the cotton sector. Training and information sessions are provided on the use of the tool.  
 
• Trade information
: ITC can help TSIs strengthen trade information services to assist the 
cotton business community to adjust to the new emerging trends.  ITC’s basic methodology 
and steps for the creation and operation of an efficient trade information service cover key 
issues such as assessment of trade information users’ needs; formulation of a strategy for 
providing trade information; efficient operations of a trade information service; dissemination of information to users. ITC’s trade inform ation specialists can pr ovide active support to 
counterparts in applying the methodology throu gh the necessary training, helpdesk services, 
information material and equipment.  
 
• Export Quality Management
: ITC can strengthen the capacity of the National Enquiry Points 
(NEPs) on SPS and TBT to provide sharp and ta rgeted information on technical requirements 
in export markets and to undertake dissemina tion seminars on the standards and conformity 
assessment in the cotton sector. 
 WT/L/587 
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• Product sector strategy development
: In order to benefit from the export of cotton or value-
added products in a sustainable way, a stra tegic approach is needed, especially when 
considering the expected changes to take pl ace in 2005. To ensure a sustainable approach 
based on full country ownership, ITC would work  with all stakeholders to coach them to 
develop their own strategy for cotton, cotton by -products and value-added products made out 
of cotton. The strategy process will aim at assisting the cotton community, including small 
producers and village communities, to generate more value from export potential. This could 
include launching small initiatives using cotton by-products such as animal feed, growing 
mushrooms, bio-fertilizers, etc….  
 
1.2 Capacity building at the enterprise level:  
 
• Product and Market Development for Clothing : With the 2005 Quota Phase-out, 
competitiveness requirements for garment manufac turers will increase tremendously. To meet 
these challenges, ITC addresses 5 major needs of developing countries garment 
manufacturers with solutions implemented togeth er with all major stakeholders, including 
market actors. This includes i) clothing sector  strategy development; ii) benchmarking with 
competitors around the world; iii) sourcing in formation and supply management skills; iv) 
understanding changing markets after 2005 and developing tailo r-made market penetration 
approaches in traditional and newly emerging market s; and v) promotion of e-applications in 
the clothing sector. 
 
• Export Quality Management : While ITC does not work in the area of agriculture production, 
it can help with quality improvement of the export products by assisting producers and ginners to produce according to market/buyer  requirements, which essentially covers post-
harvest handling. This can be done throug h the development of awareness and training 
programmes for grass-root producers and small holders on how to improve quality control 
processes, especially on S PS, involving where applicable the NEPs on TBT and SPS. 
 
• Market development
: ITC can provide assistance to SMEs, small growers, ginners and 
intermediaries to link them to the right bus iness partners by organising market tours and 
market missions to selected markets. These missions will aim at strengthening SMEs capacity 
to respond to the requirements of the target ma rkets and to adopt new technologies that would 
help increase the productivity of the sector. 
 
• Competitiveness assessment : ITC “Fitness Checker”  tools assist enterprises to undertake 
self-assessment through simple interactive checklists. The series include a general Export 
Fitness Checker, ISO 9001 Fitness Checker, and Transport Packaging Fitness Checker . 
These tools are available on CD-ROM software ve rsions and printed versions. Training in the 
use of the various tools is provided at field level. 
 
2. At the regional and sub-regional levels 
 
 ITC could provide trade-related technical assist ance at regional and s ub-regional levels to 
create synergies and to ensure that initiatives unde rtaken help to strengthen the export capacity of 
cotton producing countries within the region or th e sub-region. This would result in a holistic 
approach to the development of the cotton sector to  enable the business community to take advantage 
of increasing market opportunities.   
• Strengthening sub-regional negotiating capacities
: ITC can organize Business for 
Development  workshops, training and information di ssemination sessions at regional and sub-
regional levels where stakeholders from both the public and the private sector would focus on 
the strategic issues regarding cotton and the business implications of WTO negotiations on 
the development of the sector.  
  WT/L/587 
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 • South-South trade along the value chain
: Some African countries, in particular SADC 
countries, are looking into the feasibility of developing an integrated value chain from cotton towards clothing production. While ITC cannot assist  in the development of a textile industry, 
it can assist in creating business linkages be tween African countries with complementary 
production factors and trade interests. ITC can bring cotton growers, ginners, fabric manufacturers and clothing manufacturers closer together to do business along a regional value chain to be finally able to penetrate th e major clothing markets. This sub-regional, or 
regional, approach is needed in order to help African countries comply with the rules of origin 
for market access of clothing products imposed by the worlds major markets and thus benefit 
from business opportunities. This would not only increase trade within Africa but would also facilitate access to the major clothing markets, especially in light of major changes expected 
from 2005 onwards. Such an approach is to be seen in the overall context of regional 
integration 
 3. At global level 
 
 A selected number of products/activities would also enable ITC to help link national capacities to regional and global networks.  
• A“Cotton Guide”
: ITC could prepare a “ trader’s manual on cotton”. The guide would 
contain basic and operational information on the international cotton market and its 
requirements, with practical help to the tr ader and the producer. Specific sections would 
address the issues at the level of the smallhol der and the extension services (from the market’s 
perspective: seeds, storage, pesticides, requirements for producing organic cotton, etc.).  
 
 Based on the ITC product-network approach, traini ng would be organised at regional level to 
introduce the manual and review the needs for its adaptation to the local contexts. This 
training would be targeted to decision makers  in professional organi zations and extension 
services involved in the cotton production and trade as well as in the textiles sector.  
 
• Market studies on cotton by-products and valued-added cotton products : these studies would 
help producing countries to identify and analyse potential export markets for cotton by-
products and value-added produc ts in order to diversify exports beyond the commodity 
market. 
 
• Facilitation of Technical Cooperati on among Developing Countries (TCDC) : As more cotton 
consuming industries will be based in developi ng countries, especially after the textiles and 
clothing quota phase-out, ITC can facilitate the transfer of knowledge and especially 
market/buyer requirements from cotton consum ing industries in developing countries to 
growers, ginners and intermediaries. 
 
Three Delivery Modes  
  Technical assistance proposed by ITC could be de livered through one of the following modes: 
 
• Generic tools and multi-country programmes  
 
 Specific existing tools or tools that could be developed for each of the components described, would be applied to the realization of the define d objectives.  Some of these tools could be made 
available through subscription, while  others would require ITC specialists to train local counterparts 
in their use. This would be the simplest and most  economic way of using ITC expertise and tool kit. 
These tools include provision of guidelines for desi gning, developing and implementing inter-regional 
trade development programmes. WT/L/587 
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• Customised initiatives  
 
 This mode provides in-depth technical assi stance since it addresses carefully identified 
specific national needs for trade development. It involves inter-alia  formulation of specific country 
initiatives addressing specific high priority needs that the country may have in the areas highlighted in 
this document. The initiatives will clearly define speci fic activities that need to be undertaken together 
with a time horizon for their implementation. Wh ile the funding required for country-based activities 
under this modality is usually higher, assistance pr ovided through this mode has a greater impact. 
 
• Multi-agency, multi-country programmes 
 
 Under this mode, a broad range of the compone nts delineated above could be integrated with 
current or planned activities of other development partners; this could then be offered as a multi-
agency, multi-country programmes. The objective is to cover uncovered areas to provide a holistic 
trade related technical assistance. Th e activities that could be delivered through this mode will need to 
be structured in a manner which gives more value to this joint TRTA than  what each partner can 
deliver by working in isolation. A prime example of  this type of assistance is the Joint Integrated 
Technical Assistance Programme (JITAP) of ITC, UNCTAD and WTO, which is currently running in 
16 African countries and seeks to build capacity at di fferent levels for understanding, complying with, 
and deriving benefit from the evolving MTS. Another example is the Integrated Framework (IF) that 
coordinates the intervention of six multilateral agen cies to help mainstream trade in the national 
poverty reduction strategies. More informati on on these two initiatives is given below.  
  WT/L/587 
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 Annex I: Contribution through JITAP
 
  
 JITAP is a multi-country, multi-agency capacity building programme implemented by ITC, 
UNCTAD and WTO in sixteen African countries (Ben in, Botswana, Burkina Faso, Cameroon, Côte 
d’Ivoire, Ghana, Kenya, Malawi, Mali, Mauritania, Mozambique, Senegal, Tanzania, Tunisia, Uganda 
and Zambia). The programme aims at building cap acity and strengthening national knowledge base 
on the Multilateral Trading System (MTS) in the partner countries, for a more effective participation 
in the trade negotiations, in the implementation of WTO agreements, and for the formulation of 
related trade policies. The programme also contributes to improving the supply capacity and 
market knowledge of exporting and export-ready enterprises in the participating countries, to derive 
benefit from business opportunities resulting from better market access under the MTS.  
 Cotton is an important resource for export development and a sector in which smart poverty 
reduction programmes can make a difference. 14 out  of the 16 JITAP countries (i.e. with the 
exception of Botswana and Mauritania) are partic ipating in this WTO regional workshop; capacity 
development action may be initia ted under this  umbrella. 
 
 Cotton was mentioned as a priority sector or a sector of high potential in the project 
documents of Benin, Burkina Faso, Côte d’Ivoire , Kenya, Mali, Mozambique, Uganda and Zambia. 
Burkina Faso had emphasized the cotton case made at the WTO, without specifying what type of 
assistance would be required from the JITAP participating agencies.   Generally and based on contributions by ITC and WTO, JITAP could undertake some 
activities in the cotton sector provided that needs ar e expressed by the countries and are included in 
their respective project documents. Specific need s and priorities must correspond to the JITAP 
mandate and pertain to one of the programme’s fi ve modules: MTS Institutional support, Compliance, 
Policies and Negotiations (Module 1); Strengthening  MTS Reference Centres and National Enquiry 
Points (Module 2); Enhancing MTS knowledge a nd networks (Module 3); Products and Services 
Sector Strategies (Module 4); Networking and Programme Synergy (Module 5). Once identified and 
deemed pertinent for the relevant JITAP countries,  the capacity building activities will be considered 
in the context of the JITAP implementation plans.  JITAP could also ensure a catalytic role in 
coordinating various initiatives that aim at helping the African countries in developing their cotton 
sector. WT/L/587 
Page 102 
   
Annex II: Contribution through the IF
 
 
  ITC’s contributions to the IF initiative have been designed with specific objectives in mind:  
to show immediate and concrete results by promoting the participation of the private sector; to use to 
the largest extent locally available expertise to  maximize resources and enhance the local capacity; 
and to optimise the potential for a broad based  participation of development partners. 
  ITC is committed to put in place new ways  to link LDCs’ production capacities to fast 
growing export markets.  Thus, ITC concentrates on strengthening the capacity of export-oriented 
SMEs in LDCs, almost always labour-intensive enterprises, to have a direct impact on employment and income generation, hence on wealth creation.  This is done through capacity-building for sectoral 
strategy formulation, for trade support services and for enterprise-level performance improvement. 
  Under the IF initiative, ITC is assisting selec ted LDCs in the formulation of strategies for 
export diversification of products  and sectors having good potential.  Activities include, among others, 
improvements of export production technology and quality management, training in product 
conditioning and marketing, and feasibility studies followed by advice on plantation, agro-processing 
and marketing.    
 Since trade development of cotton is becoming increasingly a priority area of intervention 
common to 14 LDCs (Angola, Benin, Burkina Faso , Chad, Ethiopia, Guinea, Madagascar, Malawi, 
Mali, Mozambique, Senegal, Tanzania, Uganda and Zambia) actively participating in the IF, it is 
suggested that a regional programme aimed at a ddressing the country-specifi c supply-side concerns, 
prioritized through the different stages of th e IF process, be prepared based on the DTIS 
recommendations. Such a regional programme will have to follow a comprehensive and holistic 
approach to cover the needs at all levels in cotton producing African countries. While ITC cannot 
address all needs, it can do so in its niche ar eas where it has expertise and experience.   WT/L/587 
 Page 103 
  
 ANNEX 14 
 
SAHEL AND WEST AFRICA CLUB / OECD 
 
TRANSFORMATIONS IN WEST AFRICAN AGRICULTURE 
AND THE ROLE OF FAMILY FARMS 
 
Camilla Toulmin and Bara Guèye 
 
 
Executive Summary 
  This report, commissioned by the Sahel and West Africa Club (SWAC) Secretariat, examines 
changes in West African agricu ltural systems, the major challenges being faced by millions of 
smallholders in the region, and pathways for the future, given in ternational pressures and domestic 
constraints. Based on consultations and analysis of  key issues, this scoping study was undertaken to 
lay the ground work for the development of a longer programme on the transformation of West 
African agriculture. This aims, among others, to st rengthen debate on West African agriculture, the 
role of family farms and trade policy at national,  regional and global levels. The proposed programme 
aims to identify and document how agricultural patte rns and livelihoods are evol ving in different parts 
of the region, to identify winners and losers, to outline the impact of OECD trade and agricultural 
policy on farming livelihoods, and to highlight the opportunities for producer organisations to 
influence policy design and negotiations - all in partne rship with diverse organi sations and interests in 
West Africa. 
  Agriculture is a central sector of West African economies, contributing a third of GDP, 
occupying 50-80% of the population, and providing a major share of export earning and government revenue. Looking towards the future: 
 
• There is a growing demand within the region fo r more diverse grains, fruit, vegetables, meat 
and dairy produce, which may be met by a mix of domestic production, sub-regional sources and 
imports from other major producers. '  • Land will be increasingly scarce and valuable, especially in peri-urban areas and high-
potential zones. A pragmatic approach  is needed to provide greater security for smallholder farmers, 
to encourage investment and productivity growth.  • Smallholder farmers must organize to lobby th eir governments to ensure their priorities are 
taken into account in new strategy and policies, not only in the agricultural sector but also in related 
fields, such as land tenure and trade negotiations. 
 • The future for these family farms depends on  agricultural trade negotiations under the WTO 
Doha round, to cut over-productio n and dumping by richer countries, as well as easier access to 
developed country markets. 
 
• Reliance by West African farmers on traditiona l export crops does not provide a secure route 
out of poverty, given global over-production, dec lining terms of trade, and tariff escalation on 
processed produce.  • The sincerity of OECD countries' commitment to  meeting the MDGs will be seriously tested 
by whether they are ready to cut farm subsidies, and help smallholders in poor countries "grow their 
way out of poverty". _______________ ' 
For example: the European Union, United-St ates, Latin America, and South East Asia. WT/L/587 
Page 104 
   Differences in past agricultural performance are largely explained by the effects of policy, 
market incentives, and climatic factors. Rural people continue to diversify their activities to cope with 
change, including rising levels of migration within and out of the region and it is estimated that 70-
80% of rural people fall below the poverty line in al most all West African countries. Lack of data 
makes it difficult to assess changes in poverty levels over the last 20-30 years. Some longitudinal case 
studies suggest many rural communities have beco me better-off. However, economic collapse and 
conflict have brought a rapid descent into poverty for some populations, such as in Cote d'Ivoire. 
 
 There have been major long-term changes in the structure and character of West African 
agriculture. These include the power exerted by ra pid urbanization throughout  the urban hinterland, 
with towns and cities providing markets, a sour ce of income and economic opportunity; the changing 
structure of farm households, and growing individu alism; diversification of incomes and activities, 
especially migration earnings; new crops and nich e products; rising scarcity and value of land, 
especially in peri-urban areas; and the greater role  of private sector operators in input supply, 
marketing and contract farming systems. At the same time, the emergence of producer organisations 
offers the possibility of getting farmers' voices heard at high levels of government.   Weak performance of the farming sector in West Africa is usually attributed to supply factors 
(e.g. rainfall and land availability). But farmers he re, like those throughout the world, are also 
concerned by returns from investment. Low prices, limited market access, uncertain transport, high 
transaction costs, and very limited access to inputs, set tight constraints on performance. The persistence of family farms is testimony to their adaptability, despite harsh challenges. Family farms 
adapt to changing market conditions by switchi ng between crops and exploring new niches while 
coping with severe constraints. C ontinued growth in output of many crops despite stagnating or 
declining prices demonstrates their capacity to comp ete. However, this has its limits, leading to 
squeezing of margins, inability to renew equipment,  difficulties in maintaining soil fertility and soil 
conservation investments, and the discouraging of youth from remaining in this sector.   "Family farming" or "agricultures familiales" provides the overwhelming share of 
agricultural production in West Africa. Its fundame ntal characteristics concern the link between 
economic, social and cultural dimensions, and multiple objectives, achieved through balancing 
individual and collective goals, risk reduction by diversifying activities and sources of income, and a 
degree of independence from market relations. Neverthe less, there is diversity within the sector, with 
2-3 person households at one end,  and substantial domestic groups of 80-100 people at the other 
extreme. West African ag riculture is to a very large extent  based on family farms, which produce 
almost all food grains, oil seeds, cotton, cocoa, coffee and other crops. Exceptions concern rubber, 
palm oil, and sugar for which commercia l plantations provide a major share. 
  A clearer definition is needed of "family farming" to acknowle dge their diversity, the nature 
of support they require for continued growth, a nd their ability to seize new opportunities. A threefold 
classification is proposed, but it should be remember ed that these groupings are not watertight. There 
may also be movement by househol ds between categories over time. 
 
 • Type 1: farmers oriented towards the market, organized around a major cash crop, 
such as cotton, cocoa, coffee,  fruit and vegetables. Often highly specialized, they are 
exposed to significant risks from fluctuations on global market prices. 
  • Type 2: farms in which cereal and cash crops are largely balanced in terms of relative 
importance. Such farms often pursue c onsiderable diversification to protect 
themselves from climatic and market risks.  WT/L/587 
 Page 105 
  
 • Type 3: farms oriented towards grain production for household needs, some part of 
the harvest sold to raise cash. They c onstitute the poorer households with limited 
access to inputs and markets, little equipment and few livestock. In many places, 
these households are finding it particularly difficult to make ends meet and are undergoing a process of decapitalisation leading eventually to their disappearance. 
  Many West African governments note the need  for agricultural "modernization" associated 
with large-scale commercial farms, relying on hire d labor, modern technology, and mechanization. A 
contrast is often drawn with the small-scale fa mily farm, its reliance on backward technology, 
subsistence orientation, and low productivity. Gove rnments are interested in promoting large-scale 
irrigation and agribusiness to enable agriculture to  respond to new markets and standards, and raise 
levels of productivity. This represents a caricatur e of both large and small-scale farms. Large-scale 
commercial farms in West Africa have been high cost producers, very vulnerable to changes in 
markets, and access to cheap credit, and are the first to collapse into bankruptcy when cond itions 
change. By contrast, small-scale producers have been responsible for the vast majority of food 
and cash crop production, responding to improved  incentives when prices are right. A clearer 
assessment is needed of the strengths and weakness es of the small farm sector, how to support its 
development and responsiveness to changing mark et conditions. Attention needs to be paid to 
ensuring better balance in the preferences granted to large and small-scale farmers (access to 
land, cheap credit, etc.) so that the latter gain a fairer share of  available opportunities. 
  The adverse impacts of trade and agricultural policy in OECD countries on the developing world are gaining recognition, with evidence showing the damaging effects of farm 
subsidies paid to rich country farmers. Adverse impacts stem from: 
 
 • Downward pressure on world market pr ices caused by over-production from rich 
country farmers who are protected from fa lling prices and have no incentive to 
cutback output when demand is falling. 
 
 • Unfair competition in third country ma rkets, given the export subsidies provided 
to sell-off surplus stock. 
  • Adverse impacts on local farmers from su rplus farm produce being sold at below 
cost price, making it increasingly difficul t for local farmers to earn a living, and 
discouraging investment in ag ricultural intensification. 
  The scale of OECD member st ate subsidies to their own fa rmers at some $350b per year 
has mobilized opposition to such continued largesse, given the comparison with budget 
allocations to overseas aid or debt relief.  
 There are many arenas for discussion of trade and agricultural policy.
2 The Poverty 
Reduction Strategy (PRS) process is one avenue  for ensuring coherence between strategic policy 
objectives in trade, agriculture and poverty reduc tion. Equally there is ongoing work on fair or 
ethical trade, and associated ce rtification systems. Civil society groups in  OECD nations have 
launched several networks to influence negotia tions by campaigns for better access to rich 
country markets including tariff reductions for pr ocessed commodities, and cutbacks in non-tariff 
barriers; abolition of production related subsid ies under the Common Agricultural Policy (CAP) 
and US Farm Bill; abolition of agricultural export subsidies and rights for Least Developed 
Countries (LDCs) to protect their own farmers,  especially against dumping; and strengthened 
capacity for negotiation at national and global levels. 
 
_______________ 
2  Such as the current WTO negotiations, CAP reform, the Everything But Arms initiative (EBA), the US's 
Africa Growth and Opportunity Act (AGOA) and Millenni um challenge, the New Programme for Africa's 
Development (NEPAD) and the Internationa l Initiative on African Agriculture. WT/L/587 
Page 106 
    There is a growing body of producer organisa tions, federations, and some NGOs within 
the West African region with an interest in tr ade organisations. Such groups require support to 
enable them to fulfill their promise, maintaining strong links to the people they represent, and enhancing their ability to voice the interests of  their members in national and global fora. ROPPA 
is a central actor in this netw ork of regional organisations. 
 
 To work in this field, the SWAC needs to consider its comparative advantage and where 
best it can add value to the number and diversity of existing initiatives. Priority arenas, topics, 
and partnerships must be chosen to ensure an ef fective focus. Key to this process will be close 
working relations with existing initiatives, strengt hening relations with part ners in West Africa, 
iterative debate on priority themes, and res ponsiveness to new openings in the debate. WTO 
negotiations are the highest level at which trade and agriculture are addressed, with all other 
processes referring to the need for WTO compli ance. A large proportion of  West African states 
fall into the category of Least Developed Count ries (LDCs) and face mo re favorable negotiating 
conditions under the WTO and Cotonou Agreement,  given the non-reciprocal nature of their 
obligations. West African count ries and regional bodies need to consider their room for 
manoeuvre, given their status as LDCs as rega rds protection of domestic food production and 
trade-related benefits. 
  The SWAC Secretariat might best add va lue to these processes in the following areas: 
  • Consultation and providing a platform for discussion amongst stakeholders in West 
Africa on priorities for agricultural developmen t, trade negotiations and the trade-offs 
involved with different options. 
  • Identifying key themes with West African partners for action research to highlight the 
implications of current trends and policy measures, distributional implications, and 
choices to be made. 
 
 • Working with government and civil society groups in OECD member states to push 
for greater policy coherence, and understa nding of the global risks associated with 
short-term considerations of electoral politics at home. 
 
 • Feeding materials and ideas into high-leve l global debate, to info rm stakeholders of 
the interlinkages between trade and farm policy in countries north and south, and to build bridges between different constituenc ies, based on the influence, access and 
reputation of the SWAC. 
 
 
 
This work has been undertaken under the directi on of Karim Hussein (Principal Administrator, 
Secretariat of the Sahel and West Africa Club - SWAC) as part of a series of analytical papers 
and prospective studies on the Transfor mation of West African Agriculture  WT/L/587 
 Page 107 
  
  
Importance Importance ofofcottoncotton
production and trade production and trade 
in West in West AfricaAfrica
Karim HusseinKarim Hussein
Principal Principal AdministratorAdministrator , SWAC, OECD, SWAC, OECD
Contribution to WTO Contribution to WTO RegionalRegional Workshop on Workshop on 
Cotton, Cotonou 23Cotton, Cotonou 23 --24 March 200424 March 2004
Sahel and West Sahel and West AfricaAfrica Club / OECDClub / OECD
 
 
(Note: Prepared by Karim Hussein, Head of the SWAC’s Agricultural Transformation and 
Sustainable Development Unit, with assistance from L.Bossard, C.Perret and P.Heinrigs, 
SWAC Secretariat, Paris) 
¾Thank you very much Mr Chairman, distinguished participants and colleagues. It is an honour 
for the Sahel and West Africa Club Secretariat to participate on behalf of the OECD in this 
timely Forum. 
¾Please let me start by clarifying that while I am participating on behalf of the OECD, the 
presentation I will make today does not represent an official position of the OECD nor the SWAC. In fact, the OECD has not focused its analytical work on African cotton and does not 
have an official position on the issue. However, I will introduce material drawn from the 
SWAC’s monitoring of the West African economy, regional trends and interactions with West 
African actors.  
¾It is important to say one or two words about the SWAC at this point. The SWAC is not a 
donor. It was formed as an international response to the serious famines of the Sahel over 25 
years ago. Since then it has broadened its scope beyond food security and to cover the whole 
of the West Africa region. It is an informal Forum for strategic reflection and exchange on West 
African development perspectives and priorities – bringing together a subset of OECD 
members and West African stakeholders. Our Directorate is attached to the OECD but it has 
an autonomous governing body and Work programme and it has a regional
mandate. Our work 
is organised according to four focus areas: medium and long term development perspectives; 
agricultural transformation and sustainable development; regional integration and local 
development; and governance, conflict, peace and security. A key part of the SWAC’s mandate 
is to foster informed debate on regional development policies and practice based on West African field realities and the perspectives of diverse regional actors. 
¾We have worked on issues relating to cotton through our scoping studies on the 
transformation of West African agriculture (studies available at: http://www.sahel-
club.org/en/agri/index.htm ); field studies in cross-border cotton production zones; ongoing 
consultations with West African governments, private sector, producer networks and 
international agencies on regional agriculture priorities and cotton and joint work with other 
OECD Directorates on the impacts of trade and agricultural policies in West Africa, policy 
coherence for development, and the Development Assistance Committee’s work on donor best 
practice. Throughout we have acted as an impartial facilitator to foster dialogue among West 
African actors and OECD members.
¾We will demonstrate cotton’s importance in economic, agricultural, social and livelihood terms 
in West Africa, and hope through this to contribute to better informed dialogue on the key 
stakes and creativity in the search for appropriate solutions.
¾Finally, my presentation draws on this interaction and I want to thank our collaborators for 
their contributions.
 WT/L/587 
Page 108 
    
 
500 000  to 1 000 000 inhab.
100 000 à 500 000 inhabitants
Cities and roads
> 2000 000 inhabitants
1 à 2 000 000 inhabitants
Main paved roads
01 0 0 0  k mC.VertMauritanie
Senegal
Gambie
G. BissauGuinea
S. Leone
LiberiaMaliBurkina
C. d’Ivoire Ghana
Togo
BeninNigeriaNiger
Chad
CameroonSWAC’s coverage in West 
Africa
 
 
   
•It is important to recall some key characteristic s of the West Africa region before going further.
•The West African region I refer to, as covered by the SWAC, comprises 17 countries from 
Cape Verde in the most western part of the region to Chad on the eastern side. They include 
the fifteen member countries of the Economic Community of West African States (ECOWAS), 
plus Mauritania and Chad. Cameroon is also taken into account due to its role in the Chad River Basin. 
•The population of this region was estimated at 290 million in 2003, representing approximately 
40% of the population of Sub-Saharan Africa, and includes all key cotton producing countries in 
West and Central Africa. The region is characterised by a process of rapid demographic, social, 
agricultural and economic transformation. Population growth is more rapid than that known in other regions of the world, and population is expected to double by 2050. Any actions in agriculture need to keep this broader process of transformation in view.
  WT/L/587 
 Page 109 
  
  
Where is cotton produced? 
Mali, Burkina Faso, 
Côte d’Ivoire51 %
Togo - Benin20 %Chad -Cameroon13 %1.2 million tons in 2003 (lint)
3 main areas
Source : SWAC / OECD 
drawing on FAO data 
 
 
 
• It is useful to recall the main cotton producing zones in the region. 
•According to FAO figures, the CFA Franc zone in West and Central Africa produces 
between 4-6 % of total cotton produced in the world; the region now produces over 1 
million tonnes of cotton (lint and seed counted together - but with seed accounting for 
only 5-10% exports) . Most is exported, with the main exception of Nigeria, which consumes most cotton produced. 
•There are three main zones of cotton production as shown in this map Most West 
African cotton production is concentrated in the Soudano-Sahelian savanna (semi-
arid, variable rainfall). The CFA Franc zone, which has benefited from long term 
investment in structured national commodity chains, produces more than 80% of the 
region’s cotton. It is particularly important for 5 countries  where it ranges between 5-10% of GDP. Most of the rest is produced in Nigeria. Production is comparatively limited in Ghana, Niger, Guinea, and The Gambia. 
•In the last 20 years, West African farmers have increased areas of cotton cultivated 
to maintain production levels in context of liberalisation of the sector, falling yields and the need to maintain income in the face of structural price reduction on the 
international market to prices below the cost of production ( Particularly from the late 
1990s when increased consumption of synthetics ,support for cotton production in the North 
and supply to international markets rose substantially. In 2002, the price of cotton had dropped to 35 cents per pound – a level which Africans found near impossible to compete 
with as it is a price considered below the cost of production).
 
 WT/L/587 
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Production trends for cotton lint
1961 – 2003 (Mt)
1961
1970
1980
1990
2000
2003WEST AFRICA
MALI – BKF –CIV
TOG - BEN
CHAD - CAM200 000 t400 000 t600 000 t800 000 t1000 000 t1200 000 t
Source : FAO.See http://apps.fao.org/faostat/
 
 
 
•This table demonstrates the massive increase in regional production of cotton lint since
economic liberalisation began in West Africa in the early 1980s. This dramatic rise hasoccurred in all three main production zones, with overall production passing from 200,000 tonnes in the 1970s to over 1 million tonnes in the late 1990s / early 2000s - with cotton lintreaching more than 1.2 million tonnes in 2003.
•The table also shows the remarkable capacity of West African farms to adapt strategies to 
respond to market demand and attempt to maintain income through increased production in the
face of falling prices.
 
  WT/L/587 
 Page 111 
  
  
 
Export trends for cotton lint
1961 – 2001 (Mt)
10,000100,0001,000,00010,000,000
1961
1963
1965
1967
19691971
1973
1975
1977
1979
1981
19831985
1987
1989
1991
1993
1995
19971999
2001WEST AFRICAWORLD
100 000 Mt700 000 Mt3 700 000 Mt5 900 000 MtLogarithmic scale
Source : FAO. See http://apps.fao.org/faostat/
 
 
  
•This graph shows that West African cotton exports have progressively risen in the last forty 
years – and is now projected to reach some 13% of the international market in 2004/2005, taking second place, in front of Uzbekistan, after the US. 
•Certain economies, particularly those in the CFA Franc zone, are highly dependent on cotton 
exports. For example, cotton accounts for almost 50% of Burkina Faso’s national export 
revenue, between 32% and 36% for Benin and Chad and 14% for Mali (see Annex for further 
detail ).
 
 WT/L/587 
Page 112 
  
Cotton and the transformation of
West African agriculture
•Most agricultural & cotton production by family farms
•Trend of increased production of key export crops
•Cotton linked with increased cereals production 
(maize…)
•Reliance of traditional export crops risky 
•Population growth and urbanisation: increased demand
•Cotton remains central to many farming systems 
•Increased importance  of producer voice 
Key issue: Has cotton generated an agricultural 
revolution? Where? How?
 
 
 
 
Work undertaken by the SWAC on structural trends in West African agriculture confirmed the strategic importance 
of cotton in the dramatic process of regional agricultural transformation. 
•In contrast to US or European farms, often averaging over 100 hectares, highly mechanised and using 
high levels of inputs, 70-80% of West African agriculture is undertaken on small family farms of 3-10 
hectares . These depend largely on household labour and, if they can, opportunistically switch types of production 
over time to adapt to opportunities and shocks. These farms generate some 30-50% of national GDP – depending on the country – and produce almost all of the region’s staple food crops, oilseeds and cash crops. 
•Dramatic population growth and rapid urbanisation have increased regional demand for agricultural 
products. West African farmers have demonstrated their capacity to adapt as agricultural production of 
cereals has broadly kept up with population and demand over the last 40 years. 
•At the same time, key export crops have expanded in importance: in terms of area cultivated and amount 
produced (cotton, cocoa…). Nonetheless, reliance on export crops and primary commodities is clearly not 
a secure route to poverty reduction, due to price volatility and environmental risk  among other factors.
•Some 1-2 million households in West Africa cultivate cotton, with up to 16 million people estimated to 
directly or indirectly benefit from the impacts of cotton production. Most cotton is produced on such 
family run farms which combine diverse agricultural and livelihood activities: cotton is one major cash 
income generator, in some areas the only viable cash crop. 
•Most of these farmers are poor by international standards. However, farmers in cotton zones are often 
better off than farmers elsewhere as they have benefited from access to inputs, capacity to produce a rare 
cash crop suited to the Sahel and availability of production and marketing chains. In these zones, it seems 
as if a cotton boom might have been accompanied by a boom in cereals production, helping to account for the region moving from structural deficits and famine in the 1970s to impressive surpluses (e.g. the 
last harvest in 2003). There is some evidence that there is an agricultural revolution in cotton production 
zones, with cotton driving a process of “extensification” on the one hand and intensive production of 
cereals as cash crops for urban markets on the other. We aim to explore this in  field studies in late 2004 and 
2005.
•Another key development is that support for  institutional development in cotton areas has facilitated the 
rise of strong producer organisations. Producer voice has become increasingly important  in national and 
regional agricultural policy formulation – although producer representatives are not consistently involved in 
decision making on the cotton sub-sector. The degree to which producer organisations are sufficiently structured and close to their members varies, however. They are not all equally able to effectively interact in national, regional 
or international policy arenas.  
  WT/L/587 
 Page 113 
  
 
Economic and social importance 
of cotton in West Africa
•Comparative advantage : high quality, low costs,  
internationally competitive
•Association with staples production (maize, millet…)
•Source of cash income , jobs and improved livelihoods 
(traditional textiles industry, education, health)
•Capitalising on existing infrastructure (e.g. FCFA zone)
•Fostering innovation , even beyond cotton
•Contributing to community development and strong POs 
But
Risks: climate, volatile markets……
 
 
 
•In this context, a number of core incentives remain for farmers to continue to produce cotton in the Sahelian zone: 
natural comparative advantage given the low production cost and high quality of West African cotton and limited 
alternatives for cash crops;  a crop suited to climate (limited rain); high quality fibre; existence of international 
demand; route to accessing a cash income; availability of a support infrastructure and established marketing channels; access to services…and it has been highly competitive (production cost/quality /price) until the sustained 
plunge in world cotton prices over the last 7 years (with the exception of this unusual year, where prices have risen 
temporarily due to Chinese sustained demand and exceptionally low harvest). 
Four further points are worthy of note:
•Where cotton producers have benefited from the existence of a cotton production support structure, their
families have benefited from multipliers that make them less vulnerable to poverty: increased cash income, 
improved access to schools and clinics (via extra earnings or services provided by cotton companies leading to 
increased access to education and health).
•Access to agricultural innovation is higher in cotton zones, due to the cotton production support system 
introduced initially by the colonial administration: providing consistent extension advice, technology and 
inputs in a number of countries. A recent case study we have undertaken in Mali on agricultural innovation 
shows the wider risks related to reforms and reductions in the  cotton support system assured by the Compagnie 
Malienne pour le Développement des Textiles CMDT (these will be available on our web pages shortly). Will 
producers  still access agricultural inputs, fertiliser and technology  when CMDT is privatised? Will the State be
able to effectively step in to take up the role of technical support to producers ? If not - how will this affect the
production of related food crops?  
•A community development / producer organisation strengthening approach to cotton development in 
the FCFA zone has not only enhanced technical and productive capacities in relqtion to cotton, but has
also contributed to improved overall living conditions. This is due to incfome from cotton but also secondary
activities, e.g.: coordinated marketing of cereals; support for additional economic activities (e.g. CMDT support for 
livestock development and income generating activities for women in Mali). 
•Food grain availability has also increased given a strong association between cotton and increased production 
of staple crops such as millet and maize. 
•Another example from our studies in Mali illustrates this.
 
 WT/L/587 
Page 114 
    
 
 
Cotton 
yeld
(kg/ha)
50010001500
62 76 84 9710 00030 00070 000Maize
Production 
(Mt)From cash crop production to 
commercial farming : Sikasso zone (Mali)  1962 - 1997
Source : SWAC /OECD 
(ECOLOC Study of SIKASSO) 
 
 
•The SWAC Secretariat's “Ecoloc” studies on local economies and decentralisation in the 
Sikasso zone of Mali have shown that when the cotton production support framework, 
maintained through CMDT was loosened in the mid-1980s to allow farmers to freely 
manage the allocation agricultural inputs ac ross different  farm plots, they began to 
apply these to maize for which there was growing urban demand. Maize then became a 
major cash crop. Farmers also expanded areas cultivated, spreading the use of animal 
traction from cotton to other fields, and increasingly integrated crop and livestock activities. Similar patterns were observed in Bobo Dioulasso, Burkina Faso and Korhogo.
•For example, between 1984 and 1997, average farm size in the Sikasso zone rose from 1 
hectare to 3-4 ha. Between 1977 and 1997, maize production increased from 10,000 t to 70,000 t per year. At the same time, while yields fell, the area sown to cotton rose from 15,000 ha to 78,000. (See Annex for further detail on this case)
•While farmers are clearly ready to adapt stra tegies, a key concern in the Sahelian zone 
is that given limited alternative income ea rning opportunities available, a long term 
decline of cotton is likely to be accompanie d with a decline in the cultivation of maize 
and other associated cereals with perhaps unintended consequences for supply of urban centres, farmer incomes and food security. 
 
  WT/L/587 
 Page 115 
  
  
0100200300400500600700
1961
1963
1965
1967
1969
1971
1973197519771979 1981
1983
1985
1987
1989
1991
1993
19951997199920012003Mali : maize and cotton production   
1961 – 2003 (Mt 000)
CottonMaize
Source : FAO. Seehttp://apps.fao.org/faostat/ 
 
 
 
This graph further illustrates the interdependence of cotton and maize production in Sikasso. 
Maize production also went down when cotton production fell dramatically in 2000- 2001, largely due to a long strike by cotton producers in dispute with government over reforms.
 
 WT/L/587 
Page 116 
    
Key stakes according to some
regional actors
•Cotton is special, limited alternatives: diversification is insufficient
•Urgent solution required to address price volatility
-Development and trade components are interlinked; remove subsidies 
and short-term compensation
-Actions needed to preserve quality and competitiveness (cost/price ) 
-Scepticism on value-added of new reforms after liberalisation
-Foster regional demand, markets and processing capacity
-Raise public awareness of policy impacts in states that subsidise
cotton producers to increase support for adaptation of policies
 
 
In preparation for this meeting, the SWAC consulted regional actors (NGOs, private sector, producers…).
Notwithstanding some important nuances, there is a high degree of consensus among regional actors on 
the key stakes regarding the cotton crisis in West Africa and wider implications for agriculture. I think it is 
worth recalling 6 key points here:
(i) It is urgent to find a solution to price volatility in order to avoid destruction of the West African cotton
sub-sector. Albeit that wider key challenges exist for West African agriculture, cotton remains a special case, 
deserving sector-specific approach . 
(ii) Public awareness of the importance of policy coherence in richer nations needs to be raised. Enhanced
understanding of the actual impacts of different national and international trade and agricultural policies on Africa
could provide evidence to support targeted action to address these. OECD, some bilaterals, a number of agencies, 
and NGOs are working on this.
(iii) As confirmed by the recent Association Cotonnière Africaine (ACA) meeting, actions are necessary to 
preserve the quality and competitiveness of West African cotton on international markets (cost of inputs 
and labour, yields, price….) 
(iv) Opportunities for diversification need to be explored, but are unlikely to be sufficient given the limited
availability of alternatives particularly in the Sahel.
(v) Targeted protection, support for and investment in West African agriculture is required – but it is 
unclear how the costs of this can be covered. Fostering regional markets and processing may be a way forward.
(vi) There is scepticism about the proposal for further reform proposed by certain international actors. 
What new reforms are possible after extensive liberalisation since the 1980s? West Africans argue for more 
agricultural support not removal of the remainder of the cotton support system.
 
  WT/L/587 
 Page 117 
  
  
Challenges new initiatives need to 
address: some examples
1. Maintain link between development and trade aspects of WTO 
negotiations (West African actors)
2. Develop regional markets, processing capacities and textile 
industry (UEMOA)
3. Diversification – identify opport unities to develop alternative  
agricultural and non-agricultural value-added activities thatgenerate hard currency (proposed by IFIs and key bilaterals)
4. Risk management / insurance scheme against price volatility
(EU proposal)
5. Mechanism to monitor impact of subsidies (EU proposal)
6. Trade capacity building initiati ves: continue to support donor & 
NGO initiatives to enha nce developing country voice
 
 
This slide recalls a few of the wide range of proposals currently on the table to address the
cotton crisis. In addition to these development intervention oriented initiatives, regional actors
highlight the importance of continuing to work to address the trade aspects of the cotton crisis(e.g. the effects of subsidies on prices). While the latter is not for debate at this meeting, manyof the development initiatives will be discussed during this Workshop
I would simply like to draw attention to the need to consider a  number of challenges and
questions that any new initiatives need to address as proposals for action are debated andevaluated. This will, I hope, contribute to tailoring proposals to better fit regional realities. 
 
 WT/L/587 
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Outstanding questions for debate
(i) Will removal of subsidies produce the expected gains as new 
competitors are likely to emerge? 
(ii) Can support for processing foster a profitable and competitive
textile industry in W.A.? Who will invest?
(iii) How might diversification provide another route to adding value 
in agriculture for small farmers? 
(iv) What conditions are required to attract local and foreign 
investment?
(v) How can international negotiation processes be adapted to foster
compromise and agreement on African demands? What Institutional
issues need to be addressed?
 
 I  would  like to  end by  highlighting  7 key questions thatneed to beaddressed viable solutions to the West  African  cotton crisis
are  considered  
(i)  What is  the nature  of domestic  and international trade andagriculture policy impacts in African  agriculture? What
key adaptations  of these  policies  will generate realgains for West African farmers ? Willremoval  of subsidies  really
produce  expected  gains?  More  detailed  evidence would beuseful on which policies cause harm and to  whom  . Can  we
model  the impacts  of policy change on  African  farmers or other regions ? Proposals to develop a policy impact monitoring 
mechanism  are important  here , as  will be continued work on impact measurement by a range ofinternational institutions.
(ii) Further  - how might West African producers deal with new competition tha at may emerge from other regions as 
policy regimes change  – e.g. the end of textile quotas with the multifibre agreement in early 2005 or the new ACP accords in 
2008 ?  The example  of Vietnam  developing  coffee production attheexpense oftraditional exporters  is instructive.  
(iii) Given past efforts with mixed results, how might support f or a new regional textiles processing strategy really 
foster a profitable and competitive textiles industry in West Af ririca,  given the existence of economies of scale for 
other powerful players in the international economy ? How cantherelatively successful existing  regional  traditional
textiles  manufacturing  industry  be enhanced competition from new industrial plant avoided ? (e.g;  Kente  and Faso 
Fani cloth )? Who will invest in  processing  anddiversification? –given thattheprivate sector is unlikely  to have  sufficient
resources  and interest  in  thecurrent  economic  context . How canwebesure such industry willbeeconomically  viable,  
benefiting  from regular  supply and able to  respond to changing demand ?
( iv )  How might  diversification  really  provide  another route to adding value in agriculture for  small farmers  ? As  our
work has shown  , West  African  farmers  are adaptable, respond to changing demand andopportunity  where  possible and have 
a  capacity  to  switch  types  ofproduction.  However , there alsoneed to berealopportunities for diversification, transport  
networks,  processing  and marketing.  These  do  notalways exist in West African cotton -growing areas.  What types  of non-
agricultural  diversification are to  be  considered ? Where willtheinfrastructure come from ? Who will invest  ?  How will
farmers  be able to  take upthese activities  ? 
(v)  What conditions are  required  to  attract  local andforeign investment to support cotton sector  development  and
diversification?  
( vi ) In  principle  ,  both powerful  and more  vulnerable players in theinternational economy stand to gain  from  a  
functioning  , transparent, rules - based  trade  system . How canoptions bedeveloped where positive  sum games  can 
emerge  ?  Related  to  this ,  how can institutional aspects ofnegotiation processes beadapted to  take account  of 
constraints  felt by  poorer  nations  ?  (e.g;  continued trade capacity building, transparency , …). 
(vii) Can innovative regional initiatives be built around the pr oocess of regional integration in a mutually strengthening 
way?  The ECOWAS proposal for a support fund and the WAEMU proposal on processing provide examples. Further,  how 
can the challenges related to cotton addressed in the regional C ommon Agricultural Policy being developed by 
ECOWAS or in NEPAD  ? 
The key seems  to  be to  pursue  all options  where positive sum games canemerge for different  levels  of actors   WT/L/587 
 Page 119 
  
  
Thank you
Additional resources
SWAC web pages on agricultural transformation and cotton
www.oecd.org/sah (icon - cotton)
www.sahel-club.org/en/agri/index.htm
www.sahel-club.org/fr/index.htm
OECD initiative on Policy Coherence for Development
www.oecd.org/development/policycoherence
DAC guidelines on strengthening trade capacity
www.oecd.org/dac/trade
•Please let me end by referring you to some useful resources on cotton and 
West Africa. 
•I would like to draw attention to the fact that we have established web pages 
devoted to cotton and providing access to extensive materials from regional 
and international actors (www.oecd.org/sah ). We intend to build on this 
“living”  resource and will be happy to include further contributions as time goes on to facilitate debate and informat ion sharing. Please send to me at: 
karim.hussein@oecd.org
• Once again, I would like to congratulate the organisers for this important 
initiative and thank you for listening. I wish participants every success in 
identifying constructive  ways forward.
 WT/L/587 
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APPENDIXES 
 
SUPPLEMENTARY DATA 
 
   
32.6%Benin BurkinaBurkina
49.7%49.7% 36.4%36.4%ChadChad
MaliMali
14.6%14.6%TogoTogo
11,2%11,2%CamerounCameroun
5.8%%5.8%%Cotton lint
Share of National Export Revenue2001: Examples 6 key producers
Source : FAO
 
 
 
Note
•This slide provides an idea of the degree to which cotton is important as a source of export 
revenues for a selection of key producing and exporting countries in West Africa. 
•It is interesting to note, that Nigeria is a different case: it produces some 150,000 MT cotton 
but exports only 8-10% of this, the rest being consumed and processed nationally.
 
  WT/L/587 
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Cotton 
yield
(kg/ha)
50010001500
62 76 84 9710 00030 00070 000Maize
Production 
(Mt)The Mali case
From cash crops to commercial 
farming in Sikasso 1962-1997
Source : SWAC /OECD 
(ECOLOC Study of SIKASSO) 
 
 
This graph, using data from SWAC Ecoloc studies, shows that  trends in cotton and maize production have been close and 
interdependent in the Sikasso zone of Mali in recent decades.  A major rise in maize product ion has accompanied rises in 
cotton production. More recently, the trajectory for maize seems to continue upwards while cotton has stagnated.
This relationship is not primarily due to State intervention or incentives as these became less important after 1994. Rather, 
rapid urban growth, rising demand in neighbo uring countries and availability of inputs  via the cotton support system have been 
key. A similar relationship has been noted by regional actors in other zones between cotton and millet, and even cotton and 
sorghum - though this remains anecdotal. This relationship principally arises through sharing of  inputs, availability of 
infrastructure, technical innovation, access to agricultural services and increased capacity to invest in agriculture due to co tton 
cash incomes. These examples also illustrate that family agriculture can diversify in response to changing incentives and 
demand when the conditions are right. 
More background on the Mali cotton industry may be useful here. The cotton industry in Mali has a long history and Mali 
produces more cotton than any other single country in the region. Cotton was introduced to Mali as an export crop by the French colonial administration. In efforts to coordinate the sub-sector, a single national organisation was established to 
oversee cultivation, collection and ginning: the Compagnie Malienne pour le Développement des Textiles (CMDT). The CMDT 
has provided incentives to farmers to increase yields from 200 kg to 1,600 kg over time, limiting areas sown to cotton and 
providing fertiliser. Farmers were quick to realise that the fertiliser provided through the cotton production support system c ould 
also be used on cereals and other crops. Hence, they sometimes "diverted" some of the fertiliser intended for cotton to other crops. Farmers typically used income from cotton for savings and agricultural investment : primarily, increasing herds as a form
of savings; secondarily, acquiring draught animals to increase cultivated areas. When the CMDT eased its cotton support 
framework with liberalisation farmers increasingly used their animal-drawn ploughs to increase areas sown. At the same time, 
farmers responded to increased local, urban and regional demand for cereals, particularly maize, turning these into commercial 
cash crops. 
Agricultural transformation is accompanying this process, with the introduction of crop rotation and mixed farming systems that  
combine crop and livestock activities, replacing historic forms of  itinerant farming. The current challenge is to introduce 
effective methods of soil regeneration and end fallow.  A simila r transformation seems to have begun in other parts of the the 
Sahel. Ecoloc studies in Korhogo and Bobo-Dioulasso have also experienced this type of change, with minor differences. 
Furthermore, according to an independent observer Gérard Magrin, the combination of a worsening political climate and volatile cotton prices is causing a similar shift in southern Chad. Although the level of urbanisation in this area is low and the 
capital, N’djamena, is distant from producing zones, overall domestic demand for cereals has increased due to growing  urban 
demand from neighbouring countries (e.g. Cameroon and Central African Republic). Chad's "cotton" farmers are producing 
cereals for these countries, in spite of  problems related to distance and poor transport links. 
 WT/L/587 
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•Cotton support system favoured high access to 
agricultural innovation by farmers in the CMDT area:
- long term financial and technical support 
- demand-led innovation process
- close extension support- efficient upstream and downstream agricultural services
•Agricultural revolution in this zone
•CMDT facing new reforms, cuts and privatisation: 
what perspectives for cotton farmers? Agricultural innovation and  
cotton production in Mali
 
 
Our recent field work on access to agricultural innovation has confirmed some of these points 
in relation to current reforms of CMDT. A more detailed case study will be available on our 
web-pages shortly.
 
  WT/L/587 
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0100200300400500600700
1961
1963
1965
1967
1969
1971
1973197519771979 1981
1983
1985
1987
1989
1991
1993
19951997199920012003Mali : Maize and cotton production   
1961 – 2003 (Mt 000)
CottonMaize
Source : FAO
 
 
 
  
The evolution of cotton and maize production are close and inter-dependent. This slide 
provides further evidence of the  remarkable increase in maize and cotton production, and the way in which the maize curve closely follows the cotton curve. This is reflected even in the marked downward trend in 2000-2001, primarily due to a strike of cotton producers.
However, maize is produced for African markets where demand is variable and tight. It 
therefore currently remains marginal when compared to cotton as source cash income. However, this example illustrates that if the cotton production system is seriously damaged, maize and millet production could also suffer, with concomitant impacts on poverty, food 
security, nutrition.
 
 WT/L/587 
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ANNEX 15 
 
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION 
 
 
UNIDO'S CONTRIBUTION IN IMPROVING COMPETITIVENESS OF THE 
COTTON SECTOR AND INCREASI NG AFRICA PARTICIPATION 
IN GLOBAL TRADE 
 
 
Abel J.J. Rwendeire 
 
Managing Director 
 
Programme Development and Technical 
Co-operation Division 
  
 
Mr. Chairman,  Excellencies,  Distinguished  participants, 
 
Ladies and gentlemen,  
1. Introduction 
 It is indeed a great honour for me to be participating on behalf of the Director-General of 
UNIDO, in this meeting with very many distingui shed personalities drawn together to explore the 
crucial issues pertaining to the cotton sector in Afri ca.  Allow me to extend UNIDO's gratitude to the 
Government of Benin, through H.E. the Minister for Industry, Commerce and Employment Promotion 
for the excellent arrangements to host this meeting,  the warm welcome and hospitality extended to the 
participants of this meeting, and to the WTO Secretariat for organizing this meeting. 
 
1. UNIDO's Technical Co-operation Approach 
 The mandate of UNIDO is to assist in de veloping meaningful capacities for promoting 
sustainable industrial development in developing countries and countries with economies in transition 
while giving priority to African countries with a view to connecting marginalized countries and 
communities to the process of globalization.  Ultimatel y, this would ensure that globalization becomes 
a positive force for all in turn contributing effectiv ely to reducing poverty.  In pursuit of this overall 
mission, UNIDO's approach in supporting African c ountries is primarily based on either the existing 
Poverty Reduction Strategy Progr ammes (PRSPs) of the respective developing countries or the 
UNIDO's conceptualization of Integrated Programmes  capable of addressing the requirements of 
industrial development in a holistic manner.  Th ese Integrated Programmes combine a select number 
of UNIDO's Service Modules (reflecting core competen cies in a variety of combinations of such 
services as:  industrial governance;  investment promotion;  private sector development;  trade capacity-building;  energy and environmentally sound technologies) into a targeted support programme.  Such Integrated Programmes are develope d in close consultation with counterparts in the 
government, business community and social society.  Subsequently, they provide the basis for UNIDO's own specialized support but also the frame work for mobilizing complementary programmes 
and resources from other multilateral a nd bilateral development agencies. 
  WT/L/587 
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  In cases where the IP programmes do not exist, UNIDO utilizes the Country Service 
Frameworks, which are designed after an undert aking though needs assessm ent and prioritization 
following close and intense consultations with the recipient countries. 
  In addition to its operational activities, UNI DO devotes significant efforts to analysis and 
research on the industrial development of African countries, ranging from a comprehensive set of 
industrial statistics to country- and sector-oriented studies. 
 
3. Strengthening of Productive Capacities  
 
 The international community committed it self to achieving the Millennium Development 
Goals of poverty reducti on, fight against killer diseases, ge nder equality, basic education and 
environmentally sustainable development.  This  is one agenda that poses tremendous and most 
formidable challenges to member countries, especially those from the developing regions of the 
world.  Given the current economic  conditions taken together with globalisation and the continuous 
technological changes, the only avenue to enhanc ing productivity growth demands that domestic 
industries must compete through innovation and technological upgrading.  This means that governments and private sector enterprises in the developing countries will have to mobilise and 
utilise efficiently technologies that help in tran sforming the abundant raw materials into finished 
products for both local and international markets.   This strategy envisages developing global 
partnerships and linkages with other businesses a nd sources of technology such that there is 
continuous upgrading of do mestic capabilities and skills. 
  While UNIDO also has technical assistance pr ogrammes that deal with issues of policy 
formulation and implementation, UNIDO has had to wo rk consistently with a nd support private sector 
entrepreneurs who are the main drivers of industria l development.  UNIDO's approach has been to 
encourage linkages between large, medium, small and micro enterprises for enhancing productivity 
growth, technology transfer and diffusion so as to maintain competitiveness.  UNIDO supports micro 
enterprises to help them move from a "survivalist m ode" to a growth mode in  poverty reduction.  The 
support for small enterprises is to ensure the creati on of the "Missing Middle" to supply initially the 
local market with a view to entering the export mark et.  As for medium scale enterprises, the agenda 
is to ensure their insertion into the global value chains as true participants in equitable global 
economy.  
 In response to numerous requests from member  states and taking into account the decision 
taken at the 15
th Conference of African Ministers of Industry in 2001 to support African 
industrialization under the framework of the New Pa rtnership for Africa's Development (NEPAD) in 
line with Resolution 57/297 of th e United Nations General Assembly, UNIDO developed recently:  
the Trade Capacity Building Initiative  (launched in 2002 in Monterre y at the UN Conference) and 
the Africa Productive Capacity Initiative .  The aim of the two initiatives is to contribute to the 
achievements of a considerable increase in the share, volume and amount of the Manufacturing 
Value Added and exports  of developing countries, with a special focus on LDCs and African 
countries.  This is done under the Trade Capac ity Building Programme popularly known as the 
TRIPPLE-C INITIATIVE  which ensures that the products from these developing countries can 
Compete, Conform  and Connect  to the global market. 
 
4. Cotton Sector and Development 
 
 The main objective of this regional consultative meeting is to discuss factors constraining the development of cotton production and trade for Afri can countries in the frame of the Cotton Initiative 
initiated by WTO and African countries.  It is well esta blished that in this region, cotton is one of the 
most widely grown and widely traded of all agri cultural commodities.  Afri ca has been one of the 
significant regions producing cotton in the world.  West and Central African countries produce more 
than 5% of the world cotton production.  It is impor tant to note that production of cotton in this region 
registered a significant increase char acterized by a multiplication factor of three of yield/hectare in the WT/L/587 
Page 126 
  last ten years;  a multiplication factor of four of cotton fibre production during the last 20 years.  It is not uncommon to find annual average growth of 16 % of the cotton production acreage.  The cotton 
sector is one of the major employers in Africa acc ounting for nearly 15 million persons working in the 
cotton sector in West Africa.  Moreover, export of  cotton represents 30% to 60% of total export 
earnings in several African countries.  
5. Major Constraints to Cotton Industry 
 
 As mentioned above, the cotton sector has a big employments and export potential but also 
has equally serious challenges to overcome before its  full integration in world trade.  It has been 
found that the production and trade of cotton in African countries are facing some of the following key constraints:  5.1 Lack of necessary productive capacities 
 
 It is noted that less than 30% of the cotton production was processed in 2000/2001 in the Sub-
Saharan countries, mainly in Nigeria and South A frica.  In West Africa c ountries less than 5% are 
processed.  Sub-Saharan cotton producing countries add very little value to their cottons.  This is in 
contrast to most of the cotton growing developing countries, such as Pakistan, India, China, which 
process a big percentage of their crop into value added products for local consumption and exports. 
 5.2 Poor physical infrastructure :  energy, water, communication. 
 5.3 Weak support institutions  in the field of quality infrastructure, research and technical 
centres. 
 5.4 Lack of the necessa ry export capabilities  (such as limited access to international markets 
and commercial information).  
5.5 Limited capacities  in the field of design and product development. 
 5.6 Decrease of cotton prices  in the last years which caused a big drop in export earnings of 
UEMOA countries, estimated at around US$ 150 million per year between 1997 and 2000.  
5.7 Protection policy adopted by several developed countries  by way of grants or subsidies 
and financial support to producer s and exporters of cotton in their own country or Union. 
 
6. Cotton Sector Strategy  
 
 Specifically, for the cotton sector UNIDO aims  to assist African countries to achieve the 
following objectives: 
 6.1 To remove supply side constrai nts and increase the competitiveness  of the sector, through 
more efficient collection mechanisms, waste minimization, introduction of quality grading, 
restructuring and upgrading of productive capacities. 
 
6.2 To enable products to conform with market requirements  through development and 
adoption of standards and technical regulations a nd conformity assessment procedures and assistance 
for accreditation of laboratories.  6.3 To enable producers of cotton and textile firms  to be connected with the international 
market and foster integration in the multilateral trading system through development of market 
information systems, partnership and business opportunities in destination markets.   WT/L/587 
 Page 127 
  
  UNIDO has promoted, for a number of years, the development of the cotton textile and 
garment industry in several developing countries, particularly in Africa.  Specifically, technical 
assistance was provided to the following countries (indi cative list):  Algeria, Egypt, Tunisia, Ghana, 
Senegal, Nigeria, Madagascar, Mauritius, etc.   It is also important to mention that at th e request of the UEMOA countries, UNIDO initiated 
technical assistance to the UEMOA countries in orde r to improve competitiveness of the cotton sector 
and increase UEMOA's participation in global trade.   The UEMOA Ministers of Agriculture, Industry 
and Trade met in Ouagadougou in  June 2003 and adopted a strate gy for enhancing competitiveness of 
the cotton sector in UEMOA countries.  UEMOA aims, by the year 2010, to transform 25% of the 
cotton fibre into textiles and to create 50,000 employments in industry .  However, in view of the 
present constraints in infrastructure, the estab lished enterprises and world demand for cotton and 
cotton-based products, an uneven distribution of countr ies in the cotton value chain is likely.  As a 
first step, closer regional co-operation should be  strengthened and African countries like Mauritius, 
Morocco, Tunisia and South Africa should be encouraged to increase the importation of cotton from African countries.  
7. UEMOA-UNIDO Cotton Programme 
  The UNIDO implementation strategy, prepar ed in order to assist UEMOA countries, 
encompasses two phases:  
Phase 1 – Strengthening Trade Capacities with Focus on Quality Infrastructure  
  (1) Survey on problems facing export of the cotton fibre in the UEMOA countries and 
formulation of an action plan with focus on:  testing capacity for grading, 
contamination, conformity with market requirements ; 
  (2) Strengthening national capacities at regi onal and national levels including trainings of 
classifiers, laboratory st aff, association of farmers  and enhancing the capacities of 
the existing Cotton Technical Centre in Mali  for transforming it into a regional 
centre for technical assistance in the fi eld of cotton to all UEMOA countries; 
  (3) Strengthening capacities of the quality infrastructure  with focus on cotton 
including:  harmonization of policy and procedures for testing and classification, 
development and adoption of standards, accreditation of laboratories ; 
  (4) Establishment of an instrument-based cotton qua lity evaluation system  (HVI) for 
grading and testing of cotton fibre; 
 
 (5) Development of a cotton quality database based  on HVI instrument classification 
for UEMOA countries.  This system is deve loped in all developed country producers 
of cotton – the USA, China, Spain, Greece, etc. 
 
Phase 2 – Restructuring and Upgrading of Productive Capacities  
 
 (1) Assessment and upgrading  of selected cotton and tex tile enterprises in the UEMOA 
countries including technology transfer, certification  of enterprises; 
  (2) Strengthening export supply and support services capacities including:  export 
promotion structures, trade information services ; 
 
 (3) Building institutional capacities  in investment and technology promotion including 
project formulation, appraisal, technology transfer and management. 
 WT/L/587 
Page 128 
   Assistance already started through the ongoing UEMOA/EU/UNIDO programme for "Establishment of a UEMOA System for Accreditati on, Standardization and Quality Promotion".  
This Programme is funded by the European Union.  This is a clear demonstr ation of taking advantage 
of synergies available in the implementation of a regional programme.  Indeed, in the development 
and implementation of the programmes, and for ensuring better coordination and synergy, UNIDO 
has already established a network of links and signed several co-operation agreements and has been 
systematically cooperating with several specia lized technical agencies such as WTO, ISO, 
UNCTAD, FAO, ITC, CFC, etc.  
 
8. Financial Support Mechanisms 
 
 As is evident thus far, UNIDO not only fully supports African countries within its financial 
resources, but also mobilizes financing jointly with the recipient countries, as we are now doing on a 
larger basis with the African Ministers of Indus try (34 African countries are classified as LDCs) to 
implement the "Africa Productive Capacity Initiative (APCI)" .  This fundamental initiative has 
been taken on as a major industrial component of  NEPAD programme of work.  Linking trade and 
industry is fully covered by the APCI, which is al so a proactive tool to promote trade facilitation 
activities. 
 
 Indeed, looking at the items of this workshop, the issue of financial support mechanisms is to 
be discussed.  One really hopes that with the presen ce of the World Bank, IMF, African Development 
Bank, EU and other members of the bilateral donor community, the vexing question of providing 
adequate funding to support the good plans already designed by recipient countries together with their 
development partners will find an appropriate solution. 
 
 Thank you for your kind attention.   WT/L/587 
 Page 129 
  
 ANNEX 16 
 
THE WORLD BANK 
 
COTTON: MARKET STRUCTURE, POLICIES AND 
DEVELOPMENT ISSUES 
 
John Baffes 
Ousmane Badiane 
John Nash 
   
ABSTRACT:
  
 
Cotton supports the livelihoods of millions of ru ral households in West and Central Africa 
where it is a typical, and often dominant, smallholder cash crop. Cotton also has macroeconomic 
significance in several countries of the region, as it accounts for approximately 40 per cent of total 
merchandise export earnings in Benin and Burkina Faso, and 30 per cent in Chad and Mali. Cotton producers are under pressure from declining prices, competition from chemical fibers, stagnant per capita demand, and domestic policies. A resolution to these problems must involve a comprehensive 
package of global trade reforms and development assistance, with the latter focused on development 
of rural areas where cotton is an important crop; diversification; and improvements in the marketing 
channels and productivity of cotton produc tion; and safety nets where appropriate. 
 
John Baffes is Senior Economist with the De velopment Prospects Group; Ousmane Badiane 
is Lead Rural Development Specialist in the Afri ca Region; and John Nash is Adviser with the 
Agriculture and Rural Development Department, all with the World Bank. The contents and views of 
this paper are those of the authors and should not be attributed to the World Bank. We are grateful to 
numerous individuals for comments and suggestions  on earlier drafts, including Mary Barton-Dock, 
James Bond, Carlos Braga, Uri Dadush, Gerald Estu r, Ketaki Jain, Chiedu Osakwe, Claire Thirriot, 
Carlos Valderrama, and Panos Varangis. Se nd questions and comments to John Baffes 
<jbaffes@worldbank.org
, (202) 458-1880>.  WT/L/587 
Page 130 
  
1. Introduction 
  Cotton supports the livelihoods of at least 10 million people in West and Central Africa, 
where it is a typical, and often dominant, smallholder cash crop. Because it is one of the few viable cash crops in this area of Africa, developments in world markets for the fibre have major implications 
in the fight against rural poverty. A 40 per cent re duction in price—equivalent to the price decline 
from December 2000 to May 2002—is estimated to im ply a 7 per cent reduction in rural income in 
Benin, a typical West African cotton producer (Minot and Daniels 2002). Cotton also has 
macroeconomic significance in several countries of  the region, as it accounts for approximately 40 per 
cent of total merchandise export earnings in Beni n and Burkina Faso, and 30 per cent in Chad and 
Mali. Its contribution to GDP in these and other developing countries ranges from 5 to more than 
8 per cent (table 1).  
 The United Nations Food and Agricultural Organization (FAO) estimates that 100 million 
rural households were involved in cotton pro duction worldwide in 2001. Among the countries in 
which cotton is an important contributor to rural livelihoods are China, India, and Pakistan—where 
45, 10, and 7 million rural households, respectively were engaged in cotton production. In African 
producing countries, including Nigeria, Benin, Togo, Mali, and Zimbabwe, the number of rural 
households depending on cotton totalled 6 million. 
  In the early 2000s, low cotton prices, combined  with high support for the sector in some of 
the major producing countries, brought several reactions. Some West African governments were 
forced to support their cotton growers directly from the government budget, as the price of cotton on 
the world market fell below the cost of producing it. In India, a minimum-price-guarantee mechanism 
was triggered, prompting the government to provi de $0.5 billion in support in 2002. Brazil initiated a 
consultation process before the World Trade Orga nization (WTO), claiming losses to its cotton 
exports due to subsidies by the United States. More recently, four West African cotton producing 
countries (Benin, Burkina Faso, Chad, and Mali) have pressed through the WTO for removal of 
support to the cotton sector.
i 
 
 The importance of these issues has been wide ly recognized by the international community, 
and several strategic planning meetings have been  convened by the World Bank (jointly with the 
International Cotton Advisory Committee), the Euro pean Commission, and the WTO. In the context 
of the current meeting, the objective of this paper is to review the market setting and the global and 
country-specific policy issues, the responses to date  of the significant players in the cotton market, 
and possible options for individual country policy-makers and international donors. 
 
2. The Global Cotton Balance 
 
 Cotton is produced in many countries, but the northern hemisphere accounts for nearly 90 per 
cent of global output. More than two-thirds of cott on is produced by developing countries. During the 
last four decades cotton production grew at an annual  average rate of 1.8 per cent to reach 20 million 
tons in 2001 from 10.2 million tons in 1960. Most of  this growth came from China and India, which 
tripled and doubled their production, respectively, during this 40-year period. Other countries that 
significantly increased their share of cotton producti on were Turkey, Greece, and Pakistan (table 2). 
Some “new entrants” also contributed to this growth. Australia, for example, which produced only 
2,000 tons of cotton in 1960, averaged 650,0 00 tons during the late 1990s. Francophone Africa 
produced less than 100,000 tons in the 1960s and now produces ten times as much. The United States 
and the Central Asian republics of the former Sovi et Union, the two dominant cotton producers during 
the 1960s, have maintained their output levels at about 3.5 and 1.5 million tons, respectively, halving 
their shares. A number of Central American countri es that used to produce almost 250,000 tons of the 
fibre now produce virtually none. The share of East African cotton producers has declined 
considerably during this period. 
  WT/L/587 
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  Consumption of cotton is primarily determined by the size of the textile industries of the 
dominant cotton consumers. China, the leading tex tile producer, absorbed more than one-quarter of 
global cotton output during the late 1990s. Other major textile producers (and hence major cotton 
consumers) are India, Turkey, and the United Stat es, which together with China account for three-
quarters of global cotton consumption. Severa l East Asian countries have emerged recently as 
important cotton consumers. For example, Indonesia,  Korea, Taiwan, and Th ailand, which consumed 
only 130 thousand tons in 1960 (1.2  per cent of global consumption), absorbed 1.5 million tons in 
2002 (7.2 per cent of global consumption). Between  1960 and 2000, cotton demand has grown at the 
same rate as population (1.8 per cent per annum) implying that per capita cotton consumption has 
remained stagnant (figure 1). By contrast, consump tion of chemical fibres has increased consistently 
over the last four decades, causing cotton’s share in  total fibre consumption to decline from 60 per 
cent in 1960 to less than 40 per cent in 2000 (figure 2).  
 
 One-third of cotton production is traded in ternationally. The four dominant exporters—the 
United States, Uzbekistan, Francophone Africa, and Australia—account for more than two-thirds of 
world exports. Four major producers—China, India,  Pakistan, and Turkey—import cotton to supply 
their textile industries (table 3). Currently the eigh t largest importers account for more than half of 
world cotton imports. The four East Asian tex tile producers—Indonesia, Thailand, Taiwan, and 
Korea—accounted for 22 per cent of world cotton impor ts in 2002, compared to just 3 per cent in 
1960. 
 
 The International Cotton Advisory Committee (ICAC) collects data comparing costs of 
production among cotton producers. In its most rece nt (2001) survey, based on a questionnaire of 
28 cotton-producing countries, ICAC suggests that West Africa (especially Benin, Mali, and Burkina 
Faso), Uganda, and Tanzania, are among the low est-cost cotton producers. High-cost producers are 
the United States, Israel, and Syria. Two European cotton producers, Greece and Spain, are probably 
the world’s highest-cost producers, although they did not participate in the survey. 
 
 Real cotton prices have declined over the last  two centuries, although with temporary spikes. 
The reasons for the long-term decline are similar to those characterizing most primary commodities: 
reduction in the costs of production due to technolog ical improvements, stagnant per capita demand, 
and competition from synthetic products. Between 1 960–64 and 1999–2003, real cotton prices fell by 
55 per cent, quite similar to the 50 per cent de cline in the broad agriculture price index of 
22 commodities (figure 3). 
   Reductions in the costs of production have been  associated primarily with a doubling of yield 
during the last 40 years, from 300 kilograms per hectare in the early 1960s to surpass 600 kilograms in 2000. The phenomenal growth in yield was ai ded primarily by the introduction of improved 
varieties, expansion of irrigation, use of ch emical fertilizers, and mechanical harvesting. 
Developments in genetically modified seed technol ogy and precision farming, introduced in the late 
1990s, are expected to further reduce the costs of production. Substantial technological improvements 
have also taken place in the textile sectors, so that  the same quality of fabric can now be produced 
with lower quality cotton, a trend that holds fo r many products whose main input is a primary 
commodity. 
 
 During the last 10 years, nominal cotton prices fluctuated between $2.53 per kilogram in May 
1995 and $0.82 per kilogram in Oc tober 2001 (figure 4). The post-1996 decline in prices was a result 
of various factors, including: excess production in 1997–98; weak demand from the East Asian textile 
producers affected by the financial crisis of  1997 (Indonesia, Republic of Korea, and Thailand 
together account for some 15 per cent of cotton import demand); record stocks, reaching 9.8 million 
tons in 1997–98 and pushing the stock-to-use ratio to 0.51, the highest since 1985–86; low chemical 
fibre prices reflecting currency devaluations of several  East Asian producers; and the strength of the 
U.S. dollar.  WT/L/587 
Page 132 
   During their decline, cotton prices have been volatile. The nature of volatility, however, has 
changed considerably during the last 40 years. A simple measure of volatility shows that during 
1985–2002 volatility was 2.5 times greater than in 1960–72, but only half as great as in 1973–84 
(figure 5).
ii 
 
3. Policies Affecting the Cotton Market 
  Cotton has been subject to various mark eting and trade interventions. Townsend and 
Guitchounts (1994) estimated that in the early 1990s, mo re than two-thirds of cotton was produced in 
countries that had some type of government in tervention, including taxation and subsidization 
policies. The ICAC (2002 and 2003), which has been  monitoring the level of assistance to cotton 
production by major producers since 1997–98, found that at least eight countries have consistently supported cotton production—Brazil, China, Egypt, Greece, Mexico, Spain, Turkey, and the United 
States. The level of assistance in these 8 c ountries between 1998 and 2002 averaged $5.3 billion 
(table 4). In 2002—the year in which support wa s highest—assistance to U.S. cotton producers 
reached $3.6 billion, China’s totalled $1.2 billion, and the EU provided almost $1 billion. Producers 
in Brazil, Egypt, Mexico, and Turkey received a co mbined total of $110 million. India also supported 
its cotton sector in 2002 with  an estimated $0.5 billion.
iii 
 
 In addition to domestic support, there are so me border restrictions. Import tariff rates for 2003 
were: Argentina (7.5 per cent); Brazil (7.5 to 10 per cent); Egypt (5 per cent); India (10 per cent); 
Uzbekistan (10 per cent); Zimbab we (20 per cent). Countries with tariff rate quotas (TRQ) in place 
included China (3 per cent within quota, 90 per cent  outside quota; TRQ of 856,250 tons in 2003) and 
the United States (4.4 cents/kg within quota and 31 .4 cents/kg outside quota; TRQ of 73,207 tons in 
2002, when cotton imports totalled 6,295 tons). The remainder of this section analyzes the structure 
and degree of interventions in the United States, European Union, and China. It also looks at 
Uzbekistan, a country that taxes its cotton sector.  
The United States 
 
 The main channels of support in the United  States are decoupled payments (formerly known 
as production flexibility contracts), deficiency pa yments (also known as loan rate payments), 
insurance, subsidies to domestic mills (the so-calle d Step-2 mechanism, often referred to as an export 
subsidy), and emergency payments (introduced in 19 98 to compensate for the “loss” of income due to 
low commodity prices but made permanent under the 2002 Farm Bill). Direct payments, 
predetermined annual payments based on historical areas of cotton production, were introduced with 
the 1996 Farm Bill to compensate for “losses” due to the elimination of deficiency payments. Market 
price payments, which consist of loan deficiency pa yments, marketing loan ga ins, and forfeitures, are 
designed to compensate cotton growers for the diffe rence between the world price and the loan rate 
(that is, the target price) when the latter exceeds the former. Step-2 payments are made to eligible 
cotton exporters and domestic  end users of cotton when domestic prices exceed world prices, so that 
U.S. exporters maintain their competitiveness.   According to U.S. Department of Agriculture data, in 1997, the first year of the 1996 Farm 
Bill, support to U.S. cotton growers reached $878 m illion. Almost $700 million came in production 
flexibility contract payments, and the rest as an insurance subsidy. In 1998 support was $1.2 billion. 
When prices began declining, the emergency assistance measures were introduced, increasing the 
support to $1.9 billion in 1999, $3. 5 billion in 2000, $2.2 billion in 2000–01, and $3.6 billion in 2002. 
  In 2002 the United States passed the 2002 Farm Bill , which will be in place for six years. 
This legislation retained the earlier support through va rious loans, flexibility contracts, and insurance, 
as well as the Step-2 payment, while legitimi zing emergency assistance as “counter-cyclical 
payments.” Preliminary data fo r 2002–03 and 2003–04 indicate that budgetary outlays for the cotton 
sector (excluding Step-2 and insura nce) will be $2.7 and $2.5 billion. 
  WT/L/587 
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  Perhaps the best summary of the complexity and costs of the U.S. cotton program was given 
by the 1995 audit of the U.S. General Accounting Office: 
The cotton program has evolved over the past 60 years into a costly, complex maze of 
domestic and international price supports t hat benefit producers at great cost to the 
government and society. From 1986 through 199 3, the cotton program’s costs totalled 
$12 billion, an average of $1.5 billion a year.  Moreover, the program  is very complex. 
With dozens of key factors that interact and counteract to determine price, acreage, 
and payments and to restrict imports. The severe economic conditions and many of the 
motivations that led to the cotton program in the 1930s no longer exist … The [U.S.] Congress could, for example, reduce or phase out payments over a number of years, 
perhaps over the life of the next [1996] farm bill. 
 
The European Union 
 
 During the 1960s and 1970s Greece and Spain together, the two main cotton producers in 
Europe, produced an average of 130,000 tons each. Following their accession to the European Union, 
cotton production grew by an annual average of 7. 3 per cent, averaging more than 400,000 during the 
1990s. Support to cotton growers under the Common Agricultural Policy is based on the difference 
between the market price and a guide (support) price. The policy also influences the quantity 
produced by specifying a maximum for which assistance will be provided—the equivalent of 255,000 tons for Greece and 82,000 tons for Spain.  
  The European Union modified its cotton program in 1999 (European Commission 2000). While the guide price and the maximum guaranteed quantity were maintained, “penalties” (reductions 
in subsidy) for excess production over the maxi mum guaranteed quantity increased. Under the 
reformed policy, for each 1 per cent of excess producti on, the level of subsidy is lowered by 0.6 per 
cent of the guide price, as opposed to 0.5 per cen t prior to 1999. As production increases, the penalty 
becomes stiffer, effectively imposing a ceiling on th e level of budgetary outlays. It is important to 
note that the maximum guaranteed quantity applies at the country level (as opposed to individual 
producers), implying that when this restriction is translated to a grower basis, it creates not only 
administrative complexities but also leads to misallo cation of resources, since there is no well-defined 
mechanism of allocating quotas. Karagiannis and Pa ntzios (2002), for example, argued that the 
current system failed as a surplus-containment m echanism while resulting in farm income losses. 
 
 Between 1996 and 2000 the bud getary expenditure on cotton aid ranged between €740 and 
€903 million, implying that, on average, EU cotton producers received more than twice the world price of cotton. EU cotton producers receive support even in periods of high prices, since the budgetary allocation to the cotton sector must be disbursed. For example, EU cotton producers received approximately the same level of suppor t in 1995 and 2002, although cotton prices in 1995 
were twice as high as in 2002. In  addition to output  subsidies, EU cotton producers receive subsidies 
on inputs, such as credit for machinery purchases, insurance, and publicly financed irrigation. 
  On September 23, 2003, the European Commission proposed to reform its cotton sector. Under the proposal, an estimated €700 million will fund two support measures, with 60 per cent of the 
total coming in the form of a single farm paym ent decoupled from current production decisions and 
the remaining 40 per cent in the form of an area pa yment. Eligibility for the decoupled payment will 
be limited to growers who produced cotton during the three year period from 1999 to 2001. The area 
payment will be given for a maximum area of 340, 000 hectares in Greece, 85,000 hectares in Spain, 
and 360 hectares in Portugal and will be proportionat ely reduced if claims exceed the maximum area 
allocated to each country. To receive decoupled pa yments, cotton growers must keep the land in good 
agricultural use. To receive area payments they  must plant (not necessarily produce) cotton. 
 WT/L/587 
Page 134 
  
China  
  China is currently the largest producer, cons umer, and stockholder of cotton. China’s cotton 
sector became fully government-controlled in 1953 af ter the introduction of the first five-year plan 
(Zhong and Fang 2003). The central planning policies a dopted then, similar to those of the Soviet 
Union, remained in place for 35 years. The central government set production targets and procurement quotas. This monopoly was easily exerci sed because all ginning facilities were owned by 
cooperatives. A step to boost cotton production was taken in 1978 by increasing the price of cotton 
and supplying more fertilizer. A second boost came  in 1980 following the partial abolition of the 
communal production system and the distribution of land use rights to individual farmers.   Evidence suggests that the government of China protects its cotton sector through support 
prices, import tariffs, export subsidies, and public  stockholding. The government sets a reference price 
for cotton, typically above world prices. China also imposes a 3 per cent tariff on cotton imports up to 
0.86 million tons (it becomes 90 per cent afterwar ds). The ICAC found that support to the cotton 
sector during the six years beginning in 1998 ranged from $0.8 to $2.6 billion.
iv  Huang, Rozelle, and 
Chang (2003) estimated that in 2001 the nominal rate of protection for cotton averaged 17 per cent.   
 In 1999 the government of China announced reform measures that included creating a cotton 
exchange to facilitate domestic s pot trading, reducing prices paid to  producers, and lowering stocks. 
In September 2001 further reforms were announced  and are under way (Zhong and Fang 2003). First, 
the internal cotton market will be open to cross-re gional trade. Second, various enterprises will be 
allowed to buy cotton directly from producers with  approval granted by the provincial government. 
Third, ginning operations will be separated from marketing cooperatives, in effect making them 
commercial enterprises. To some extent the reform s have achieved their stated objectives. China’s 
stocks declined from some 3.5 million tons in th e 2-year period 1998–99 to 2 million tons in 2001–02. 
In these two periods, support to the cotton sector declined from $2.4 to $1 billion. Cotton prices 
during these two periods averaged $1.30 and $1.04/k ilogram, respectively. Furthermore, the TRQ for 
2004 has been extended to almost 1.9 million tons, fa r exceeding the likely levels of imports. Finally, 
Jinglin (2003, p. 103) noted recently on Chinese subsidies: 
  In order to assure the interests of the farmers and to promote their stable incomes, China is 
actively exploring the direct subsidy system for the bulk of agricultural products such as grain and cotton, and having the existing indirect subsidies adju sted to become direct subsidies and changing the 
subsidies meant previously for the distribution enterprises to the subs idies directly for the farmers. 
Nevertheless, such subsidy met hod and standard will not surpass th e framework of the WTO rules. 
 
Uzbekistan 
 
 Uzbekistan, the world’s fifth-largest cotton producer and second largest exporter, produces 
more than one million tons of cotton, most of  which is exported. Du ring 1998–99 cotton exports 
accounted for one–third of total merchandise exports , while the sector contributed an average of 
6.4 per cent to the country’s GDP. Prior to 1991 all aspects of Uzbekistan’s cotton sector were under state control. Most cotton was consumed by mills in Russia or shipped to Eastern European countries 
under barter arrangements. Following the collapse of  the Soviet Union, Uzbekistan began exporting 
its cotton to Western countries in exchange for fo reign currency. Until 1996, some cotton still went to 
Russia under barter trade terms.   Although 12 years have passed since the cha nge in the trade regi me, most aspects of 
marketing and trade in the sector closely resemb le the pre-1991 arrangements. There are numerous 
entities involved in all post-production activities of co tton, the most important of which are (i) the 
state ginning company; (ii) the state trading organiza tions (STOs) responsible for exports; and (iii) the 
Ministry of Foreign and Economic Relati ons, which handles financial transactions. 
  WT/L/587 
 Page 135 
  
  All pre- and post-ginning operations are handled by UzKhlopkoprom/UzPakhta-sanoitish 
(UKP), now a state company but formerly a minist ry. UKP is responsible for collecting, storing, 
ginning, and classifying cotton; making payments to growers; and providing inputs. UKP owns 
considerable assets, including a ll ginning and storage facilities as well as handling machinery and 
equipment.   The three STOs handle all aspects of cotton exports. Their main responsibilities include 
contracting with cotton merchants, organizing ship ments, receiving payments  for exports, converting 
them into local currency, and paying UKP. Alt hough the STOs have other responsibilities (such as 
purchasing machinery and equipment on behalf of th e government), exporting cotton is their core 
activity. Because each organization ha s been allocated a quota of cotton to be exported, there is no 
competition.  
 The third important entity is the Ministry  of Foreign Economic Relations, whose main 
function is to manage cotton export operations —setting prices, selecting buyers, and monitoring 
dollar receipts. Several other entities are involved in the sector, such as the state company responsible for domestic and international tr ansportation of cotton, the orga nization responsible for quality 
monitoring, and customs. 
 
 It appears that cotton growers are heavily taxed both directly, through the lower price 
received by UKP (which, in turn, receives a fixed pr ice from the STOs as dictated by the Ministry), 
and indirectly, through the exchange -rate regime. A recent study found that at an ex-ginnery price of 
$1.03/kg, the STOs receive the equivalent of $0 .63/kg (based on a world price of $1.24/kg). With 
respect to the difference between $1.03 and $0.63/kg, the study concluded: “It is not clear exactly 
where this profitability figure is allocated. It is alleged that, after a marketing fee is deducted, the 
balance is paid to the Ministry of Finance as an e xport duty.” The declared price to be paid to farmers 
by UKC is 126,000 Cym/ton of seed cotton, which,  at an exchange rate of 960 Cym/dollar and a 
32 per cent ginning ratio, implies a price of $0.41/kg, about one third of the world price.  
 It is not unreasonable to conclude that, apart from the fact th at cotton exports from 
Uzbekistan moved from a barter to a commercially oriented structure, the sector is still tightly controlled by the government. Moreover, growers are taxed heavily, receiving only about one-third of 
the export price of cotton. The latter statement must be qualified, since the exchange rate is not freely 
determined (and thus is likely to be misaligned) , and inputs are provided at non-market prices. 
 4. Reform Initiatives in Africa 
 
 During the 1990s, a number of African cott on producing countries undertook substantial 
reforms, especially in East Africa. The outcome of  those reforms has been mixed and, in a sense, 
mirrors the outcome of the reforms in other commod ity sectors (see for example Shepherd and Farolfi 
1999, and Akiyama and others 2003). There is broad agreement in the literature that one of the 
positive outcomes of the reforms has been an increa se in the producers’ share of FOB prices, prompt 
payments, increased entrepreneurial activity, and,  on some occasions, supply response. However, the 
provision of public services, including research and ex tension, has deteriorated. Furthermore, because 
reforms in most cases meant that the parastatals that had held monopolistic powers were dismantled, 
credit recovery rates worsened, in turn reduci ng input use (Baffes 2001; Poulton and others 2004). 
The remainder of this section reviews the reform process of the cotton sectors of Uganda, Zimbabwe, and Tanzania, where reforms have been advanced , and of West Africa, where reforms have only 
recently begun.  
Uganda 
 
 Cotton was introduced to Uganda early in the 20
th century, and production grew rapidly until 
the mid-1930s, when coffee began to compete as  an alternative cash crop. Cotton production 
continued to increase steadily, however, peaking in  the early 1970s at 75,000 tons. Most activities in WT/L/587 
Page 136 
  the cotton industry were administered under monopo listic arrangements. Political instability, poor 
governance, and inappropriate macroeconomic polic ies in the 1970s and 1980s had a devastating 
effect on the Ugandan economy, hitting the cotton sector especially hard. Seed multiplication 
activities were disrupted, as were research and exte nsion. Cooperatives failed to pay farmers cash for 
their cotton, and inefficient ginning marketing and operations generated high overhead costs. 
Production collapsed, plunging to a low of 2,000 tons in 1987.  
 In 1992, with World Bank assistance, Uganda embarked on a major reform program that 
included the liberalization of the cotton industr y (World Bank 1994). The government redefined its 
role in the cotton industry, taking on some ne w responsibilities (especially during the transitional 
phase) and shedding others. Ginning and the marketi ng of cotton and cotton inputs were liberalized, 
and research, seed multiplication, and extension services were strengthened.  
 Government participation in the cotton sector  after the reforms takes place almost entirely 
through the Cotton Development Organization, wh ich represents the cotton industry as a whole and 
monitors the production and marketing of cotton. A 12-member board of directors that includes public 
and private sector representatives governs the orga nization. Among other thin gs the board approves 
expenditures, senior staff appointments, procurem ent procedures, and business plans. An auditor-
general reviews the organization’s accounts and by la w must report findings to the legislature (Sabune 
1996).   To carry out its mandate, the Cotton Developm ent Organization can charge for its services, 
borrow, manage property, and levy a cess. The in itiating statute also placed explicit limits on the 
organization’s authority, however. The agency ca nnot levy a cess of more than 2 per cent, although 
the Ministry of Agriculture, which is responsible for the organization, can vary or rescind the cess by 
statutory instrument. The types of penalties the or ganization can levy for non-compliance are limited. 
Further, it is obliged to give all new entrants regi stration permits, even if they have not previously 
been engaged in the cotton industry. Businesses can renew their registrations automatically by paying 
the fees. 
 
 In many respects the cotton reforms in Ug anda have been successful (Baffes 2001). During 
the eight-year period starting in 1995–96 cotton output averaged 17,000 tons, an almost three-fold increase over the eight seasons prior to 1995–96. The corresponding world price average before and 
after 1995–96 was $1.56 and $1.40 per kilogram. The farmers’ share in world prices rose from less 
than 50 per cent to 70 per cent after the reforms, wh ile a number of new traders and exporters entered 
the sector. This success came despite the failure of most of the credit mechanisms launched after the 
reforms (Lundbæk 2002).  
Zimbabwe 
  Commercial production of cotton in Zimbabwe began in the early 1920s; a comprehensive 
cotton research program and a research station were  set up in 1925. Advan ced technology through 
insect control and the development of improve d seed varieties increased production, turning 
Zimbabwe into an important cotton producer in Africa. Initially, cotton marketing was the 
responsibility of a committee under the Grain Mark eting Board. The Cotton Marketing Board was 
established in 1969. It controlled most aspects of cotton production until 1994, from the sale of 
planting seeds to the purchase of cotton from farmers.    The Cotton Marketing Board grew into an in efficient organization with poor governance and 
high operating costs. It developed financial difficu lties because of weak management and subsidized 
cotton sales—often at half the international pri ce—to the domestic textile industry. Cotton production 
fell by almost half during the 1980s. Producers were  not paid on time and often did not receive full 
payments. By the late 1980s it had become clear that the board would have to be restructured or the 
cotton industry would collapse. A severe drought in 1991–92 contributed to the sector’s woes, causing 
a further 60 per cent decline in production.  WT/L/587 
 Page 137 
  
  
 Reforms in Zimbabwe started in 1992, when private sector representatives were appointed to 
the board, leaving just one government representativ e. The board’s mandate at the time was to 
develop a reform plan for all aspects of cotton trad e and marketing. Various regulatory controls (such 
as seed-quality regulations and cotton grading) were  transferred from the board to the Ministry of 
Agriculture. In 1993 the government announced that the cotton market would be open to new entrants, 
effectively ending the board’s monopoly to an end.  
 
 In July 1994 the Cotton Marketing Board began having difficulty paying for cotton, and a number of commercial growers started to buy thei r seed cotton elsewhere and have it ginned at the 
only private gin. In September 1994 the board’s monopoly was formally terminated. The entity became the Cotton Company of Zimbabwe, with th e government holding all shares. The government 
assumed all of the company’s debts, allowing the agen cy to start out with a clean balance sheet, and 
discontinued all subsidies to the textile industry (Larsen 2002). 
 Private companies have moved into ginning and marketing in the country. As of 1994 the 
Cotton Company still owned 80 per cent of the ginni ng capacity in Zimbabwe and operated a network 
of buying centres and collection points throughout  the major cotton-growin g areas. The Commercial 
Cotton Growers Association, a cooperative owned by  growers farming 25 hectares or more, joined 
with an international cotton company to form a new firm, Cotpro, that competes with the Cotton 
Company. In 1997 the Cotton Company was privatized. The government holds 25 per cent of the shares, small-scale farmers 20 per cent, institutiona l investors and the general public 15 per cent each, 
large-scale farmers and the National Investment Trust 10 per cent each, and employees 5 per cent.  
 Following reforms, the cotton industry improved in several ways. Cotton production is up 
substantially. In the eight seasons since 1995–96, cotton output has averaged 115,000 tons, 50 per cent more than in the eight-year period prior to 1995–96. Some 30 per cent of the 1997–98 cotton harvest was marketed entirely by private entities.  Private companies now transport most cotton. 
Competition has pushed the price farmers receive to close to 80 per cent of international prices, and 
producers are being paid faster. Zimbabwe has also retained the premium it used to receive in the 
world market.  
  Despite its success, the cotton sector of Zimbab we is experiencing difficulties that are beyond 
the sector’s control. Political and macroeconomic in stability and uncertainty over land issues have cut 
investment in the sector. The sector is also suffe ring from implicit taxation, through inflation and 
exchange-rate misalignment. 
 
Tanzania 
 
 Cotton was introduced to Tanzania in 1904 by  German settlers as a plantation crop, but the 
attempt failed. During the 1920s new efforts focused  on smallholder production, first in eastern and 
later in western Tanzania. Local research during th e 1930s led to the development of a local pest-
resistant variety. Cotton output, especially in wester n Tanzania, rose considerably with the releases of 
these local varieties, along with better organiza tion of the sector following establishment of the 
Tanganyika Lint and Seed Marketing Board in  1956. By 1966 Tanzania’s cotton output was 
80,000 tons, or 0.75 per cent of world production. 
  A turning point came in the 1960s following the spread of the cooperative movement and 
deterioration of relations between  ginnery owners (mostly Asians) and cotton growers. Eventually, 
cooperatives took over ginneries and cotton oil mills from foreign owners. Until the late 1980, the 
cooperatives and the Cotton Board handled all aspects of marketing and trade of cotton. However, 
most of the cooperatives accumulated huge debts and managed to survive only through government 
subsidies and donor support.  WT/L/587 
Page 138 
   The first steps toward cotton reform were taken in 1989–90, when the government launched 
the Agricultural Adjustment Program (Kähkönen a nd Leathers 1997). The largest reforms came with 
the Cotton Act of 1994, when the government forma lly eliminated the monopoly held by the board 
and the cooperatives and allowed competition in  cotton marketing and ginning. At the time 
14 regional cooperative unions were licensed to trade cotton. In 1994–95 some 22 private companies 
started trading cotton, and 8 new private ginneries were built, opening up another marketing channel. 
By 1996–97 private businesses were purchasing almost ha lf of all cotton. Private traders and ginneries 
were able to capture a considerab le share of the market by offeri ng higher prices than cooperatives 
and paying promptly. Some private ginneries also engaged in contract farming, providing inputs 
(seeds and occasionally fertilizer) to producers who ag reed to supply cotton in  return. The ginneries 
and producers usually established a minimum price at planting time, but the price could be adjusted if the market price was higher during the harvest.  
 The outcome of cotton reforms in Tanzania  has been mixed (Baffes 2004b; Gibbon 1998). On 
the positive side, the share of producer prices incr eased to 50 per cent, from 40 per cent before the 
reforms. Growers receive payments quickly, a ma jor achievement compared to the long delays 
encountered previously. And, contrary to many  reports, quality appears not to have suffered 
considerably. On the other hand, average cotton pr oduction after 1995–96 has been less than before 
the reforms. On the policy side, the Cotton Board a nd the two line ministries (Agriculture and Food 
Security) still play a major role in the sector that extends far beyond their proper regulatory role. Collection and dissemination of data (as well as accuracy of statistics) are poor by the government’s own admission.  
Francophone Africa 
 
 The cotton industry in francophone Africa was pioneered by the French state-owned Compagnie Française de Développement des Fibres Textiles (CFDT). As countries gained independence they established their own national cott on companies, but the CFDT retained a minority 
shareholding position and an owne rship interest in companies engaged in processing cotton by-
products. The national cotton companies had a lega l monopsony in cotton buying, and most had a 
monopoly on ginning, marketing, and supplying inpu ts. They would announce a base buying price for 
seed cotton before planting, sometimes supplementing that price with a second payment (payable in 
the following season) based on the company’s financ ial health. Village producer associations handled 
intermediate input credit and seed payments, and input credits were deducted from payments for 
cotton. Aided by research in Africa and France, cotton growing expanded ra pidly, increasing more 
than fourfold in the past 25 years. Growers u sed inputs well adapted to local conditions to produce 
high yields of cotton of consistent quality (Badiane a nd others 2002). 
  The system, however, exhibited weaknesses. Pr ices received by producers were very low, 
often not exceeding 40 per cent of FOB. The absen ce of competition in domestic markets and the 
involvement of cotton companies in the provision of  services allowed costly operating inefficiencies 
on the part of the parastatal companies, wh ich absorbed a large share of export prices. 
  The determination of annual cotton prices reflecte d, at least in part, the relative bargaining 
power of a number of groups; namely, producers, go vernments, managers of the state-owned cotton 
companies, and the CFDT. Pan-territorial pricing of cotton and farm inputs implied that transport 
costs were not properly taken into account in the determination of where cotton was grown. 
Furthermore, uniform prices across the region eff ectively transferred res ources from producers who 
were close to ginning or distribution centres to t hose who were farther away. Pan-seasonal pricing and 
planned delivery schedules to ginning plants severely limited growers’ choices on managing 
inventories. Finally, the system did not respond fl exibly to changes in world market conditions. For 
example, in the late 1980s and early 1990s low wo rld prices and an overvalued currency led to the de 
facto  bankruptcy of a number of cotton companies, wh ich then had to be drastically restructured, 
supported by injections of money from national go vernments and international aid organizations. 
  WT/L/587 
 Page 139 
  
  During the past several years, in conjunc tion with the Agence Française de Développement 
(AFD), the World Bank has held intensive discussions with the governments and other stakeholders in 
West and Central Africa, including the cotton parastatals, CFDT, and input suppliers. These 
discussions resulted in two broad reform proposals: retaining the cotton companies but reforming and 
regulating them, and introduci ng free entry and competition (Badiane 1999; Baffes 2000). The first 
proposal involved a number of st eps including: setting prices at levels appropriate to a competitive 
environment; giving producers equity in the nati onal cotton companies and more influence over key 
decisions, especially price setting; subcontrac ting activities, such as providing inputs and 
transportation to private firms; and eliminating subsidies on sales of cotton lint and cotton seed to domestic textile firms and oil mills.   The advantage of this proposal is that it reduces the risk of damaging the current system—
which has many desirable aspects—with more far-re aching reforms. Maintaining the current system’s 
ability to recover research and extension costs a nd its high repayment rates on input loans is 
especially important. The proposal has two weaknes ses, however. First, domestic prices are unlikely 
to move in line with world prices (a supposed goa l of the reform process), because large shares of 
national income are at stake. The price-setting mech anism has been (and is likely to remain) political 
because a number of interest groups are involved in the negotiations. Second, the proposal is 
incompatible with initiatives to establish free tr ade among countries in the region under the two 
regional arrangements. New trade arrangements w ould require reforming the cotton industry again. 
  The second proposal, which involves free entry,  calls for opening the sector to competitive 
entry at all levels, and hence linking domestic pr ices to international prices, which would vary 
according to transportation costs and the season; ma intaining and strengthening research, extension, 
and phytosanitary regulations, areas in which the government has an essential role; strengthening 
farmers’ groups and facilitating their participa tion in voluntary contract-farming arrangements; 
freeing the cotton industry from sector-specific taxa tion and subjecting it only to economy wide taxes; 
and increasing the efficiency of regional ginneries by harmonizing reforms of cotton trade across West African cotton zones. 
 
 Some reforms in francophone Africa over the last  few years point to the future direction of 
institutional changes in the region’s cotton sector (Goreux 2003). In Burkina Faso, for example, the 
cotton company still holds a monopsony on cotton pu rchases, but producers acquired 30 per cent of 
the company’s shares in 1999. There are also plan s to allocate one of the production zones to a new 
ginning operator. In Côte d’Ivoire, the cotton comp any was split into three companies of comparable 
size in 1998; following a two-year transition pe riod, the two new private companies now operate 
independently.   In Benin, reforms started earlier, with input  provision being privatized in 1992 and private 
operators entering the ginning sector in 1995. Reforms have made significant progress since then, 
under the strong leadership of farmers’ and ginners’  organizations. The private sector, led by producer 
organizations, today plays a lead role in financing and setting priorities for research in the sector. It 
has taken over complete control over extension ser vices. More importantly, it has established an 
innovative mechanism to recover input credit and manage payment to producers. However, 
recognizing the gradual character of the reform process,  stakeholders in Benin have preferred to retain 
some aspects of the monopoly/monopsony system, while capacities of local producer organizations 
are being strengthened. For instance, producer prices are still pan-territorial and still announced in advance of planting. The last next big step in the reform process in Benin is the privatization of the ginning operations of the national cotton company, which is in its final phases. 
  Mali is the only other francophone country where noticeable efforts are being made to reform 
the cotton sector, following the near-bankruptcy of  the national cotton company a few years ago. 
There are plans to allow new ginning  operators to set up plants in two production zones. In addition, 
discussions are underway to restructure the nationa l cotton company and possibly move toward its 
privatization in the near future. WT/L/587 
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5. The World Bank's Activities in the Cotton Sector 
  The World Bank Group has undertaken cotton- related activities in several developing 
countries. Traditionally, the Bank’s involvement has taken the following forms: lending to support the 
cotton sector—for both investment and technical as sistance—either from IBRD loans or IDA credits; 
and policy advice through economic and sector work, usually linked to policy reforms associated with quick-disbursing loans and credits. 
 
Lending and Technical Assistance Projects 
 
 The World Bank has approved a number of cotton-related investme nt and adjustment 
operations.
v Two operations were approved during th e 1990s. Approved in 1994 for a total of 
US$14 million, the Cotton Development Project in Uganda sought to improve performance in the 
cotton industry through liberalization of cotton pro cessing and export marketing; establish an efficient 
regulatory framework for the cotton industry; an d improve managerial, technical, and operating 
efficiency in a creditworthy ginning industry. The project also sought to improve efficiency of supporting services through support for national researc h and extension programs and also to improve 
delivery mechanisms and availability of credit and seeds. Approved in 1995 in the amount of 
US$66 million, the Cotton Improvement Project in Uzbekistan was designed to liberalize prices of 
cotton seed, bring producer prices for seed cotton marketed under the state system closer to 
international prices, create a private cotton-planting  industry, eliminate input subsidies, and shift 
cotton trade from barter-based to cash-based transactions. 
 More recently, the World Bank made loans in West and Central Africa that had components 
directly or indirectly affecting the cotton sector. The Cotton Sector Reform Project in Benin 
(approved in 2002), is expected to facilitate tran sition to a competitive system through support of 
private sector operations and institutional change resulting from the privatization of the National 
Company for Agricultural Promotion's (SONAPRA) ginning activities. This project component’s main focus is supporting the ins titutions involved in cotton ginning and primary marketing to help 
them become strong and effective. Technical assi stance and advisory services will cover management 
responsibilities, auditing, and financing operations , including training for institutional capacity 
building. Furthermore, the project will support th e implementation of sector wide technical-service 
programs to help the private sector take over th e agricultural services and other technical support 
functions carried out by SONAPRA. The effort to  privatize SONAPRA’s ginning plants includes 
assistance and advisory services, notably to address social issues and the financial needs of the 
government's conversion program.   The Second Poverty Reduction Support Credit Project in Burkina Faso, approved in 2002, is an integral part of the Country Assistance Stra tegy to support the implementation of the Poverty 
Reduction Strategy Paper (PRSP). It is the second in  a series of three planned operations. The project 
is designed to help the government achieve better outcomes in public resource management by 
(i) strengthening program budgets and linking allocations to specific sector objectives, strategies, and 
action plans; (ii) improving service delivery in education, health, and rural development; and 
(iii) strengthening the fiduciary framework to prom ote accountability and transparency in the use of 
public funds, including external aid. In the c ontext of its rural development component, the 
government, in collaboration with the World Bank, w ill closely monitor the poverty impact of cotton 
liberalization in the medium-term and take corrective measures if necessary. An upcoming PRSC III program ($50 million) is expected to continue to foster the reform proce ss in the cotton sector by 
supporting participatory mechanisms for developing  the rules and conditions governing the opening 
of two cotton zones to private investors, awarding the contracts, and addressing issues related to input financing. 
 
 The Structural Adjustment Credit Project V in Chad, approved in 2003, is designed to support the cotton-sector reform program. Its primary goal is to improve the livelihoods  of about 300,000 poor 
families. Given the complexity of the reform progr am, which is being introduced in a context of  WT/L/587 
 Page 141 
  
 depressed world cotton prices and barely functioning rura l markets, it will be a challenge to ensure the 
program's consistency with its stated objective. To overcome this risk, a study has been carried out to 
identify the most appropriate scenario for the st ate's divestiture from Cotontchad. Moreover, an 
extensive ex-ante and ex-post povert y and social impact analysis is being completed, the results of 
which will feed into the design of the reform progr am and allow for ex-post adjustments if necessary. 
 The Third Structural Adjustment Credit in Ma li, approved in 2001 and currently under way, 
supports (i) recovery and restructuring of the co tton sector to restore positive economic growth and 
(ii) public expenditure reforms aimed specifically  at advancing the government's poverty reduction 
objectives. The government has laid out its policy for reforming and liberalizing the cotton sector, 
including a plan to privatize the cotton company’ s agro-industrial and commercial activities. The first 
phase of the project includes initial divestment ac tivities and design of a full sector-liberalization 
program. The restructuring program will necessarily sp an several years and require an effort to create 
an appropriate framework to attract private capita l and know-how and to build the capacities of key 
participants, notably the farmers' organizations . Reinforcement of the capacity of farmers' 
organizations to play an increasing role in the management of the cotton sector will be provided 
separately. 
 
Finally, under the Agricultural Services a nd Producer Organizations Project, approved in 
2001, the authorities in Mali expect to implement th e first phase of the reform program. Its objectives 
were to (i) restore the cotton company’s financial st ability so as to allow it to secure financing for the 
forthcoming crop season; (ii) achieve efficiency gains in the cotton company through restructuring and divestment of non-core activ ities; (iii) divest to the private sector the cotton collection and 
marketing activities in one cotton growing area; (iv) privatize the cotton-oil company; (v) assure that 
the producer price of cotton for the 2001–02 crop year was high enough so that confidence of the 
farmers would be maintained, compensate for the heavy losses in rural incomes suffered in 2000–01, 
and redress the impact on rural poverty; and (vi) define and prepare the final phase of the sectoral 
reform program.  Non-Lending Activities 
 
 In addition to its lending operations, the World Bank has engaged in non-lending activities 
that include policy advice, sector work, dissemination activities, and, more recently, price-risk management (box 1). 
 
 The World Bank has been active in assisting the reform process in the cotton-producing 
countries of West and Central Africa. To that end, numerous consultati ons have taken place among 
the relevant stakeholders, including farmers’ orga nizations, the cotton companies, the French cotton 
parastatal, and the multilateral donors. Initially, the discussion regarding the reasons for reform took a heated tone, most likely due to misunderstanding.  Later, however, a consensus emerged. As the 
special issue of Cotton Outlook on the cotton sector of West and Central Africa noted (p. 2): “Much of 
the impetus for change in the regions has come  from … the World Bank [which] provides a clear 
outline of the main policy options now under consid eration. It is encouraging to note that the 
sometimes acrimonious nature of the recent debate w ith regard to the future of cotton in Francophone 
producing countries appears to be giving away to a more constructive dialogue.” 
 
The World Bank along with AFD convened tw o major regional meetings, a technical 
symposium on cotton sector policies in Ouagadougou in  1999 and a ministerial meeting in Abidjan in 
2002 on the cotton reforms and the global environment for cotton trade. Furthermore, the World Bank is currently finalizing a study on long term devel opment strategies for the co tton sector in West and 
Central Africa countries, focusing on 4 main area s: the potential for textile and garment sector 
development; future trading mechanisms for an  expanding cotton sector; technology generation and 
dissemination to sustain long term competitivene ss; and raising the poverty impact of cotton 
cultivation. The World Bank and ICAC co-sponsor ed a conference on “Cotton and Global Trade 
Negotiations” (July 8–9, 2002) that boosted awaren ess of the global policy environment in the cotton WT/L/587 
Page 142 
  market. Cotton also figures prominently in Global Agricultural Trade and Developing Countries , an 
edited volume forthcoming from the World Bank. Numerous commodity-related briefings of the 
Bank’s Board of Executive Directors have taken place, including one that focused exclusively on 
cotton (March 31, 2003).   Managing price risk in the cotton sector is another area in which the World Bank has been 
active. Price-risk management in the cotton sector  is complicated due to the presence of high basis 
risk—that is, low correlation between the New York Bo ard of Trade futures contract and the A Index, 
the main price measure of the world cotton market.
vi  In addition to the b asis risk, use of the New 
York contract by producers and traders outside th e United States involves currency risk (for example, 
Euro/$ exchange-rate risk in the case of West and Central Afri ca). Despite these difficulties, the 
World Bank recognizes that managing risk, especially in an environment where cotton growers are fully exposed to the forces of dema nd and supply, is an issue that mu st be fully explored. Currently, 
the World Bank and ICAC are examining the existing pricing and marketing systems in selected West 
and Central Africa countries in order to assess the potential of various devices to manage and mitigate 
risk. The work will focus on two key areas. First, it will examine the existing marketing and price 
mechanisms and the way in which risks are current ly allocated. Second, it will study potential risk-
mitigation devices that go beyond the existing New York  futures contract, such as over-the-counter or 
forward contracts offered by large banks, cotton merchants, and investment houses. 
 
6. The Road Ahead 
 
 Low-income countries that depend on cotton f ace challenges on several levels. First, cotton 
encounters intense competition from chemical fibres, especially following technological 
improvements of the early 1970s that brought the pri ces of synthetics down to cotton’s levels. Second, 
agricultural support policies in important cotton- growing countries inflate production and depress 
world prices. Third, in developing countries where cotton is an important source of rural incomes, 
reform programs for restructuring the cotton sector to increase its efficiency remain incomplete, or in 
some cases have just begun. 
 
 On the demand side, cotton promotion is someth ing that must be pursued by all producers. 
Two signs are encouraging. First, cotton consump tion in the United States has been increasing for a 
decade. The United States has an  active cotton-promotion program with an annual budget of about 
$60 million (Jacobson and Smith 2003). Its main featur e is raising consumers’ awareness of cotton 
through the “Seal of Cotton” campaign. Skelly (2003) finds a strong correlation between the 
program’s advertising campaign and cotton’s market  share in the United States. Second, an initiative 
was undertaken recently through the ICAC to establi sh a cotton promotion program. To that end, the 
International Forum for Cotton Promotion (IFCP) was established in 2003 with the objective of 
encouraging and facilitating national market-developm ent programs to be organized by associations 
and commercial organizations in i ndividual countries and funded from domestic resources. The IFCP 
is expected to achieve its objective by serving as a clearinghouse for the exchange of ideas and 
strategies to be implemented by national organi zations, and by facilitating the establishment and 
expansion of national de mand-enhancement efforts. While it is  too early to assess the performance of 
the promotion initiative, it is certainly a step in the right direction.  
 While a detailed discussion of producer suppor t policies and their impacts on developing 
countries is outside the purview of this paper, it is clear that any long-run resolution must achieve 
significant reduction in production- and trade-distorti ng subsidies, which will need to be addressed in 
the multilateral trade negotiations. If subsidies to  farmers in industrialized countries are not 
eliminated, a second-best alternative would be to provide them in the form of decoupled support 
mechanisms. Income transfers under decoupled m echanisms are based on past production and prices 
and thus have relatively small effects on production. 
  WT/L/587 
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 On the reform side, a number of developing countries, especially in Sub-Saharan Africa, 
launched policy reforms in the 1990s. Although not a panacea, in many respects the reforms have 
been successful. Generally, cotton growers in count ries where reforms have been sustained have 
received a higher share of FOB prices. They also received payments more promptly, and their supply response has been greater. In an environment of declining commodity prices, these are not trivial 
achievements. However, in some cases, the refo rm process has not been co mpleted (Tanzania), has 
been reversed (Zimbabwe), has been slow (West A frica), or has not begun (Uzbekistan). Here further 
reforms are the only feasible alternative. 
 The World Bank and other international donors can  play a useful role in supporting reforms 
through policy dialogue and appropriate investment programs. In r ecognition that an effective strategy 
for rural poverty reduction must give commodity  producers opportunities to diversify sources of 
incomes, the long-run strategy should be to focu s the investment program on public goods necessary 
for overall rural development rather than on commod ity-specific lending. But investments to improve 
the competitiveness of the sector are also important . One approach to improving competitiveness is to 
increase the efficiency of the production chain throug h restructuring. As mentioned earlier, the World 
Bank has approved a number of projects that directly or indirectly deal with the cotton sectors in West Africa. 
 
The World Bank has been working with the In ternational Task Force on Commodity Risk 
Management on a pilot project to make available risk-management instruments to help developing-
country producer organizations and rural finance in stitutions increase their efficiency by managing 
their exposure to price risks. The project provides technical assistance and training to institutions in developing countries and to interna tional providers of risk-management instruments in order to bring 
the two together. While the project focused origin ally on coffee producers, it has more recently begun 
to work with cotton producers.   In addition, farmers’ incomes could be  enhanced by increasing on-farm productive 
efficiency—for example, by improving research a nd extension work in cotton and helping cotton 
growers access the most appropriate technologies. Appropriate technologies may include genetically 
modified (GM) cotton. In China for example, wher e GM cotton is used extensively by smallholders, 
the costs of production declined by 20–25 per cent (Pray and others 2001). Th is cost reduction meant 
doubling the net income for cotton growers. GM cotton in Australia requires half the amount of chemicals used by conventional cotton (Campbell 2003). One should also note that GM cotton has not 
been subject to negative consumer reaction,  as has been the case with food products. 
  It is also important to reduce the macroec onomic vulnerability of cotton-producing countries 
to future market shocks. In the longer term, this w ill involve diversification of exports at the national 
level. This could occur horizontally (farmers coul d move out of cotton and into other agricultural 
products and income-generating activities in rural areas)  or vertically (the country could move up the 
value chain by manufacturing cotton products). The pot ential for such vertical diversification in the 
West African cotton-producing countries is not clear, but it could be explored through market tests by 
extending preferential access to OECD and middle-in come country markets for African textile and 
garment products, with generous rules of origin.  
 In the shorter term, donors can make extra r esources available to countries when they are 
subjected to shocks, in order to buffer nega tive impacts on vulnerable groups and productive 
government investments. This is the objective of  the European Union’s new FLEX program, and of 
the International Monetary Fund’s Compensatory Finance Facility.
vii  While the World Bank does not 
have any analogous special facility to address co mmodity shocks in IDA countries, it has used 
existing lending instruments in this way. Both th e World Bank and the IMF are currently evaluating 
how they can best use current or new instrume nts to mitigate the negative effects of shocks. 
 WT/L/587 
Page 144 
   Thus, a reasonable donor strategy for assis ting countries to overcome these problems could 
comprise the following elements: 
 
• Support by cotton-producing country governme nts and the international community for 
further efficiency-enhancing reforms and restructuring of the sector. 
 
• Donor support for the cotton-growing sectors and the rural sector more generally. This should 
take the form of productive investments and may include funding for selective safety nets for 
especially vulnerable groups in cotton- growing areas that may have suffered 
disproportionately from the depressed state of the cotton market. 
 
• Donor support for development of mechanisms to  mitigate vulnerability to risk on the levels 
of both the individual farmer and the country. 
 
• In the multilateral trade negotiations, redoubled ef forts to come to an agreement that will 
significantly reduce domestic support for cotton producers in industrialized countries and 
ensure that residual support is provided in a form that has minimal effects on production and 
trade. 
 
• In bilateral trade policy, reduced barriers to imports into industrialized and middle-income 
countries from African manufacturers of textiles and garments.   WT/L/587 
 Page 145 
  
 ENDNOTES 
  
i Even the chemical fibre industry has complained. The Director General of the International Rayon 
and Synthetic Fibres Committee in a letter to the Financial Times  on June 12, 2003, complained that 
“recent increases in cotton subsidies have rigged the market even more dramatically in favour of 
cotton, depressing demand for every substitute product. The result is industrial plants being kept idle 
… that were built in legitimate expectation that  the competitive advantages of manufactured fibres 
would create demand to fill the capacity.”  
ii Note that 1973 reflects the commodity price boom, while 1985 coincides with the U.S. change in 
cotton policy regime and the subsequent  disposal of large cotton stocks. 
 
iii Numerous studies have examined the effects of these policy interventions on the world price. as 
well as the trade and production structure of cotton. For a summary, see the survey in Baffes (2004a). While studies differ on the effects of reforms on cotton trade patterns and world prices, a likely 
outcome to consider is that under full agricultura l liberalization in all commodity sectors (including 
cotton), cotton prices will increase in the range of 10 to 15 per cent above the level that would prevail 
in the absence of reforms. African and Aust ralian producers would increase their production and 
export share, while U.S. and EU shares would decline. 
 
iv Fang and Beghin (2003), however, estimated th at between 1997 and 2000, the nominal protection 
coefficient for cotton averaged 0.80, implying that China taxes its cotton sector by an estimated 20 per 
cent. The different views on the nature and degree of  intervention reflect the complexities of China’s 
agricultural policies as well as the unreliability of the data.  
 
v In addition to World Bank’s lending operations, lending and equity investments to private sector 
entities (notably textiles) take place through IFC (International Finance Corporation, the private sector leg of the World Bank Group). 
 
vi In addition to the low correlati on between the A Index and the No. 2 contract, research has shown 
that some of the components of the A Index are not highly correlated with each other (Baffes and 
Ajwad 2001). 
 
vii The FLEX program replaced the STABEX/SYSMIN program, which had the same objective but 
was judged not to be operating effectively. WT/L/587 
Page 146 
    
Box 1: World Bank’s Lending and Non-Lending Activities in the Cotton Sector: 2001–04 
 
The World Bank’s involvement in the cotton sector incl udes lending operations directly targeting the sector, 
adjustment operations, poverty reduction support projects, technical assistance, policy advice, and dissemination 
of information. 
Lending Operations: Benin—Cotton Sector Reform Project ($18 million, approved January 22, 2002). Burkina 
Faso—Second Poverty Reduction Support Credit Project ($35 million, approved July 11, 2002). Chad—
Structural Adjustment Credit Project V ($40 million, approved March 18, 2003). Mali—Structural Adjustment 
Credit III ($70 million, approved D ecember 11, 2001). Mali—Agricultural Se rvices and Producer Organizations 
Project ($43.5 mil lion, approved December 11, 2001). 
Policy Advice:  The World Bank has assisted the reform process in the cotton-producing countries of West and 
Central Africa. To that end, extensiv e consultations have taken place among the relevant stakeholders, including 
farmers’ organizations, the cotton companies, the French  cotton parastatal, and multilateral donors. Currently, 
the World Bank and the International Cotton Advisory Committee are studying pricing and marketing systems 
in selected West and Central Africa countries in order to assess the potential of risk-management  and -
mitigation devices. 
Sector Work/Dissemination Activities:  The World Bank and the Internati onal Cotton Advisory Committee co-
sponsored the conference on “Cotton and Global Trade Negotiations” (July 8–9, 2002), which raised awareness 
about the policy environment in the world cotton market. Cotton also figures prominently in Global Agricultural 
Trade and Developing Countries , forthcoming from the World Bank. Numerous briefings at the World Bank’s 
Board of Executive Directors have taken place, including  one devoted exclusively to  cotton (March 31, 2003). 
The World Bank played a major role during the Cancun Ministerial meetings by facilitating discussions among 
the relevant stakeholders and disseminating material, including a trade note entitled “Cotton and the Developing 
Countries: A Case Study in Policy Incoherence.” 
Integrated Framework:  Chad, Burkina Faso, and Benin have applied to join the Integrated Framework. Given 
the importance of cotton to these recommendations countries , it is likely that in the IF studies, cotton will 
feature in the policy and technical assistance. Mali has undertaken a diagnostic trade integration study. 
  WT/L/587 
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 TABLE 1: COTTON’S IMPORTANCE TO DEVELOPING ECONOMIES: 1998-99 
 
 COTTON EXPORTS 
 Millions of 
US dollars Per cent of 
merchandize 
exports Per cent 
of GDP MERCHANDISE 
EXPORTS 
(millions of US dollars) PER 
CAPITA 
GDP 
Burkina Faso 127 43.9 5.1 289 249 
Benin 164 39.1 7.1 419 398 
Uzbekistan 1,038 32.2 6.5 3,227 467 Chad 76 32.2 4.7 236 224 Malí 180 29.5 6.7 611 285 Togo 67 21.3 4.7 315 341 Tadjikistan 97 15.1 8.2 643 352 Turkmenistan 110 12.3 3.6 891 1,126 Tanzania 44 7.6 0.5 576 185 Syria 214 6.7 1.4 3,177 858 Sudan 41 6.0 0.4 688 290 
 
Notes: Per capita GDP is ex pressed in constant 1995 U.S. dollars. 
Source . FAO (FAOSTAT) and World Bank (World Development Indicators). WT/L/587 
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TABLE 2: GLOBAL BALANCE OF TH E COTTON MARKET (THOUSAND TONS) 
 
 1960 1970 1980 1990 1999 2000 2001 2002 2003 
PRODUCTION           
China 1,372 1,995 2,707 4,508 3,830 4,417 5,324 4,916 4,870 
US 3,147 2,219 2,422 3,376 3,694 3,818 4,420 3,747 3,968 
India 1,012 909 1,322 1,989 2,650 2,380 2,686 2,312 2,848 Pakistan 306 543 714 1,638 1,911 1,816 1,783 1,736 1,700 
Uzbekistán
 1,491 2,342 2,661 2,593 1,128 975 1,055 1,022 915 
Franc Zone 63 140 224 562 881 728 1,039 952 967 Turkey 192 400 500 655 791 880 922 900 900 
Brazil 425 549 623 717 700 939 766 848 1,121 
Australia 2 19 99 433 741 804 745 386 295 Greece 63 110 115 213 43 5 421 435 375 330 
Egypt 480 509 529 296 233 210 317 290 190 
Syria 112 150 118 145 306 370 327 245 277 
World 10,201 11,740 13,831 18,970 19 ,070 19,437 21,485 19,301 20,212 
CONSUMPTION          
China 1,481 2,016 3,300 4,225 4,700 5,200 5,700 6,500 6,750 
India 1,006 1,076 1,371 1,958 2,939 2,924 2,910 2,927 2,950 
Pakistan 245 429 461 1,343 1,700 1,764 1,855 2,042 2,100 US 1,803 1,786 1,083 1,885 2,230 1,929 1,676 1,583 1,350 
Turkey 109 184 293 557 1,483 1,150 1,300 1,310 1,300 
Brazil 272 296 566 723 852 873 830 760 760 Indonesia 10 43 104 336 480 530 510 500 475 
Mexico 109 146 165 170 525 435 430 460 410 
Thailand 15 65 127 328 340 360 415 415 400 Russia 1,350 1,821 1,796 1,190 280 320 340 313 300 
Korea 59 117 322 436 325 320 340 325 310 
Italy 226 201 209 333 305 300 275 260 230 Taiwan 46 137 229 346 295 250 280 260 234 
Bangladesh  — — 45 98 169 196 240 300 320 
Uzbekistán — — — 205 185 220 220 225 250 Japan 739 766 715 650 280 251 228 204 184 
World 10,231 12,173 14,215 18,585 19610 19,844 20,284 21,119 20,978 
 
Notes:  Uzbekistan and Russia refer to USSR prior to and including 1990. Bangladesh is included in Pakistan 
prior to (and including) 1970. 
Source:   ICAC, Cotton:  Review of the World Situation , various issues.  WT/L/587 
 Page 149 
  
 TABLE 3: GLOBAL COTTON TRADE (THOUSAND TONS) 
 
 1960 1970 1980 1990 1999 2000 2001 2002 2003 
EXPORTS           
US 1,444 848 1,290 1,697 1,470 1,472 2,395 2,591 2,862 
Uzbekistan 381 553 616 397 893 800 810 798 643 
Australia 0 4 53 329 696 849 662 575 360 Greece 33 0 13 86 310 244 290 275 223 
Malí 2 19 35 114 201 125 126 167 262 
Syria 97 134 71 91 252 212 180 120 170 Benin 1 14 8 58 136 140 148 162 128 
Burkina Faso 0 9 22 73 95 112 123 155 197 
Tadjikistan — — — 200 83 110 117 140 141 Côte d’Ivoire 0 7 42 81 160 150 109 83 144 
Zimbabwe 0 32 55 38 121 118 67 76 95 
World 3,667 3,875 4,414 5,081 6,107 5,857 6,470 6,618 6,932 
IMPORTS           
Indonesia 7 36 106 324 450 570 460 500 470 
India 204 155 0 0 348 350 425 350 200 
China 65 108 773 480 30 52 98 685 1,500 
Turkey 0 1 0 46 575 383 624 516 400 Thailand 4 46 86 354 371 342 443 410 391 
Mexico 0 1 0 43 404 410 450 501 361 
Russia
 0 238 28 37 279 373 292 310 141 
Italy 218 178 193 336 307 300 271 260 230 
Korea, Rep. 51 121 332 447 332 304 352 325 310 
Japan 800 796 697 634 276 240 227 215 169 Pakistan 1 1 1 0 103 101 191 186 425 
Taiwan 47 160 214 358 313 226 333 265 201 
Brazil 0 4 2 108 340 131 55 123 75 
World 3,804 4,086 4,555 5,222 6,050 5,747 6,159 6,577 6,932 
 
Notes:  Uzbekistan, Tajikistan, and Russia refer to USSR prior to and including 1990. 
Source:   ICAC, Cotton:  Review of the World Situation , various issues. WT/L/587 
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TABLE 4: GOVERNMENT ASSISTANC E TO THE COTTON SECTOR 
 
 1997 1998 1999 2000 2001 2002 
Assistance (millions of US dollars)     
United States 1,244 1,886 3,485 2,215 3,634 2,690 
China 2,013 2,648 1,534 1,900 1,217 800 Greece 659 660 59 6 537 735 718 
Spain 211 204 199 179 245 239 
Turkey — 220 199 106 59 57 Brazil 29 52 44 44 10 — 
Mexico 13 15 28 23 18 7 
Egypt 290 — 20 14 23 33 
Assistance (percentage of world price)    
United States 18 45 78 47 89 58 
China 27 45 35 34 24 13 
Greece 121 142 11 8 101 187 160 
Spain 114 151 130 151 253 197 
Turkey — 19 31 10 7 5 
Brazil 4 8 6 4 2 — Mexico 4 5 18 15 22 15 
Egypt 53 — 7 9 7 9 
 
Notes:  Years refer to marketing years (i.e. 1998 refers to 1998–99). Data for 2003 are preliminary (for the 
United States they do not include insurance and Step-2 payments). Assistance (percentage of world price, lower 
panel) is the ratio of total assistance divided by production over the world price of cotton, multiplied by 100. Source:  U.S. Department of Agriculture for the United States; European Union for the EU and International 
Cotton Advisory Committee for the rest.  WT/L/587 
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Figure 2: Cotton's Share in Total Fiber Consumption and Polyester 
to Cotton Price Ratio
304050607080
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
20020.01.02.03.04.05.0Cotton's Share (%, left scale) Price  Ra tio (right scale )Figure 1: Cotton Consumption
9111315171921
1960
1962
1964
1966
1968
1970
1972
1974
1976
19781980
1982
19841986
1988
1990
1992
1994
1996
1998
2000
200212345
Kilogra ms pe r pe rson (right sca le )
Million tons (left scale)WT/L/587 
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Figure 3: Real Price Indices, 1960-2003 (1980 = 1.0)
0.40.60.81.01.21.4
1960
1962
1964
19661968
1970
1972
1974
1976
1978
1980
1982
1984
1986
19881990
1992
1994
1996
1998
2000
2002A Inde x Agriculture
Figure 4: Nominal Price Indices, 1990-2003 (August 2002 = 1.0)
0.51.01.52.02.53.03.5
Jan-90
Jul-90
Jan-91
Jul-91
Jan-92
Jul-92
Jan-93
Jul-93
Jan-94
Jul-94
Jan-95
Jul-95
Jan-96
Jul-96
Jan-97
Jul-97
Jan-98
Jul-98
Jan-99
Jul-99
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03Agriculture A Inde x WT/L/587 
 Page 153 
 
 
 Figure 5: Cotton Price Variability
048121620
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
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1994
1996
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2000WT/L/587 
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 REFERENCES 
 
Akiyama, Takamasa, John Baffes, Donald Larson,  and Panos Varangis (2003). “Commodity Market 
Reform in Africa: Some Recent Experience.” Economic Systems , 27: 83-115. 
 Badiane, Ousmane, Dhaneshwar Ghura, Louis Goreux, and Paul Masson (2002). “Cotton Sector Strategies in West and Central Africa.” Wo rld Bank Policy Research Paper, no. 2867. 
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 Badiane, Ousmane (1999). The Cotton Sector in West and Central Africa. Cotton Policy Brief. The 
World Bank, Washington, D.C.  
Baffes, John (2004a). “Cotton: Market Setting, Trade Policies, and Issues.” World Bank Policy 
Research Paper, no. 3218. http://www.econ.worldbank.org
. 
 _____ (2004b). “Tanzania’s Cotton Sector: Reforms, Constraints and Challenges.” Development 
Policy Review , vol. 22, no.1, pp. 75-96. 
 
_____ (2001). “Policy Reforms in the Cotton Market.” In Commodity Market Reforms: Lessons from 
Two Decades , ed. Takamasa Akiyama, John Baffes, Donald  Larson, and Panos Va rangis. Regional and 
Sectoral Studies, The World Bank, Washington, D.C.  _____ and Mohamed Ajwad (2001). “Identifying Price Linkages: A Review of the Literature and an 
Application to the World Market of Cotton.” Applied Economics , vol. 33, pp. 1927-1941. 
 _____ (2000). “Cotton Reforms in West a nd Central Africa, and the World Bank.” Cotton Outlook, 
Special Issue: Cotton in the Franc Zone . Cotlook Limited, Liverpool, United Kingdom. 
 Campbell, Christine (2003). “Australian Cotto n Industry.” Paper presented at the 3rd China 
International Cotton Conference, Jiuzhaigou, China, October 27-29. 
 Cheng, Fang and John C. Beghin (2003). “Prot ection and Comparative Advantage of Chinese 
Agriculture: Implications for Regional and National Specialization.” in D. Sumner and S. Rozelle 
eds., Agricultural Trade and Policy in China: Issues, Analysis and Implications , Ashgate Press, 
United Kingdom.  
 European Commission (2000). Commission Analysis Paper: The Cotton Sector in the European 
Union . Brussels. 
 
European Commission (2003). Agricultural Reform Continued: Commission Proposes Sustainable 
Agricultural Model for Europe's Tobacco, Olive Oil and Cotton Sectors . Brussels. 
 Gibbon, Peter (1999). “Free Competition without Sust ainable Development? Tanzanian Cotton Sector 
Liberalization, 1994–95 to 1997–98.” Journal of Development Studies , vol. 36, pp. 128-50. 
 
Goreux, Louis (2003). “Reforming the Cotton Sector  in Sub-Saharan Africa (Second Edition).” Africa 
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 Huang, Jikun, Scott Rozelle, and Min Chang (fo rthcoming). “The Nature of Distortions to 
Agricultural Incentives in China and Im plications of WTO Accession.” In WTO Accession, Policy 
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 Jacobson, Timothy Curtis and George David Smith (2003). Cotton’s Renaissance: A Study in Market 
Innovation . Cambridge University Press, Cambridge, UK. 
 
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   WT/L/587 
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4/1/2004 1MULTILATERAL ROLE:MULTILATERAL ROLE:
SOME INITIAL THOUGHTSSOME INITIAL THOUGHTS
Uri Dadush
The World Bank
WTO African Regional Workshop 
on Cotton
Cotonou, Benin
March 23-24, 2004
 
 
4/1/2004 2A.BACKGROUND
Slow growth in demandSlow growth in demand
Rapid productivity growthRapid productivity growth
Extended supply, Extended supply, ““newnew ””entrantsentrants
Downward price trendsDownward price trends
High degree of volatilityHigh degree of volatility
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4/1/2004 3West Africa Cotton
It is price competitiveIt is price competitive
It is of high qualityIt is of high quality
Price recovery is improving, but Price recovery is improving, but ……
it is based on low wage laborit is based on low wage labor
 
 
 
4/1/2004 4B. BROAD IMPLICATIONS
Need to operate at a global level with Need to operate at a global level with 
agricultural negotiationsagricultural negotiations
Step up efforts to enhance the pace of Step up efforts to enhance the pace of 
reformsreforms
Focus initially on West Africa but Focus initially on West Africa but 
more needs to be done broadlymore needs to be done broadly
 
 
 
  WT/L/587 
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4/1/2004 5C. GENERAL APPROACHES
Country ownership within PRSPCountry ownership within PRSP
Focus on helping the farmersFocus on helping the farmers
Exploit regional synergiesExploit regional synergies
Enhance the role of private sector and Enhance the role of private sector and 
rely on marketrely on market --based instrumentsbased instruments
 
 
 
4/1/2004 6D. SPECIFIC ACTIONS
Enhance productivityEnhance productivity
Increase quality, improve priceIncrease quality, improve price
Explore specific nichesExplore specific niches
Explore the role of trade logisticsExplore the role of trade logistics
Continue the process of reformsContinue the process of reforms
 
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4/1/2004 7E. POSSIBLE NEXT STEPS
Create a specific donorCreate a specific donor --coordinated coordinated 
initiativeinitiative
Prepare a diagnostic to put Prepare a diagnostic to put ““fleshflesh --onon--
thethe--bonesbones ””
Develop a Develop a ““business planbusiness plan ””for a donorfor a donor --
joint initiativejoint initiative
Discuss and determine on the above in Discuss and determine on the above in 
a followa follow --up conferenceup conference
 
 
  WT/L/587 
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4/5/2004 1Cotton: Market Structure, Policies, Cotton: Market Structure, Policies, 
and Development Issuesand Development Issues
John Baffes
The World Bank
WTO African Regional Workshop 
on Cotton
Cotonou, Benin
March 23-24, 2004
 
 
  
 
4/5/2004 2Cotton:
Percent of Merchandise Exports (1998-99)
051015202530354045
Burkina Faso Benin Chad Mali
 WT/L/587 
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4/5/2004 3Cotton:
Share of GDP (1998-99)
012345678
Burkina Faso Benin Chad Mali
 
 
  
 
  
4/5/2004 4Per Capita Income
(1995 constant US$)
050100150200250300350400
Burkina Faso Benin Chad Mali
 
  WT/L/587 
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4/1/2004 5Cotton's Share in Total Fiber Consumption and Polyester t o 
Cotton Price Ratio
304050607080
1960
1962
1964
196619681970
1972
197419761978
1980
1982
1984
1986
198819901992
1994
199619982000
2002012345Cotton's Share (%, left scale) Price Ratio (right scale)
 
 
   
 
    
4/1/2004 6World Fiber Consumption (thousand tons)
06,00012,00018,00024,00030,000
1960
1962
19641966
1968
1970
197219741976
1978
198019821984
1986
198819901992
1994
1996
199820002002Cotto n
Chemical Fibers
 
 WT/L/587 
Page 164  
 
  
  
4/1/2004 7World Per Capita Fiber Consumption (kilograms)
12345
1960
19631966
1969
1972
1975
197819811984
1987
1990
1993
1996
19992002Cotton
Non-Cotton
 
 
 
 
    
4/1/2004 8World Cotton Yields (kilograms per hectare)
200300400500600700
1960
1963
1966
1969
1972
1975
19781981
1984
1987
1990
1993
1996
1999
2002 
  WT/L/587 
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4/5/2004 9During the last 40 years, 
all cotton demand came 
from additional 
population. 
Furthermore, all this 
demand was met by 
yield increases.
 
 
   
 
 
4/5/2004 10ISSUES:
¾Supply side development issues 
(promote efficiency, introduce 
new technologies, e.g., enhanced seed cotton technology).
¾Demand-side issues (e.g., cotton 
promotion).
¾Policy issues (policy reforms in 
both developing and developed 
countries).
 
 
  
 WT/L/587 
Page 166  
 
 VI. LIST OF PARTICIPANTS  
 
African Countries  
 
Angola  
Benin 
Burkina Faso Cameroon Central African Rep. Chad 
Congo (Dem. Rep. of) 
Côte d'Ivoire Egypt Ethiopia Ghana 
Guinea 
Kenya  Madagascar Malawi Mali Morocco 
Mozambique 
Niger Nigeria Senegal Somalia 
South Africa 
Sudan Tanzania Togo Tunisia Uganda 
Zambia  
Zimbabwe  Mauritius (Coordinator of the WTO African Group)  
 
Other Representatives  
 
Canada  European Commission  Japan  
United States  
  China, Peoples' Republic of    WT/L/587 
 Page 167 
 
 
 International Organizations  
 
African Development Bank (ADB)  African Union (AU)  ACP Secretariat 
Economic Community of West African States (ECOWAS) 
United Nations Food and Agriculture Organization (FAO) Intergovernmental Francophone Agency (AIF) International Cotton Advisory Committee (ICAC)  International Monetary Fund (IMF)  
International Trade Centre (ITC) 
New Partnership for Africa's Development (NEPAD) Organization for Economic Co-operation and Development (OECD) Secretariat 
United Nations Conference on Trad e and Development (UNCTAD) 
United Nations Development Programme (UNDP) 
United Nations Economic Commission for Africa (ECA) 
United Nations Industrial Develo pment Organization (UNIDO)  
West African Development Bank (WADB), Lomé, Togo West African Economic and Monetary Union (WAEMU), Ouagadougou, Burkina Faso  World Bank   
 
WTO Secretariat  
 
Director-General  Mr. Stuart Harbinson, Director, Office of the Director-General  
Deputy Director-General Dr. K.A.A. Rana  
Director Textiles Division, Chiedu Osakwe  Mr. Jean-Pierre Lapalme, Textiles Division  Mr. Bijit Bora, Economic Research and Statistics Division  Miss Selvarany Reynaud, Textiles Division  (Logistics)   
 WT/L/587 
Page 168  
 
LIST OF PARTICIPANTS 
WTO African Regional Workshop on Cotton 
Cotonou, Republic of Benin, 23-24 March 2004 
 
    
Mr. Viwanou Gnassounou ACP Secretariat  Brussels   
Mr. Saul Alanaoca ACP Secretariat  Director , Programme Management Unit Support, Brussels alanaoca@mtsacpeu.org  
Mr. Maki Osman ACP Secretariat  Economic Couns ellor, Embassy of Sudan at Brussels   
Ms. Marcelle Da Silveira ACP-UE AC P-UE Secretariat, Benin 00 229 30 70 10 
Mr. Ablassé Ouedraogo AfDB Special Advisor, Tunisia 00 216 71 10 2057 
Mr. Chuku-Dinka Spencer AfDB Director, Tunisia c.spencer@afdb.org  
Mr. Alphonse Gombe AfDB Senior Agronomist, Tunisia a.gombe@afdb.org  
Mr. João Lusevikueno Angola Director, Interna tional Co-operation, Ministry of Commerce gob.min.com@ebonet.net  
Mr. Abdirizak Musa AU Counsellor, African Union Office at Geneva   
Mr. Karl Vandepitte Belgium Assistant Attaché,  Embassy of Belgium in Benin 00 229 30 18 75 
H.E. Amb. Samuel Amehou Benin Ambassador/Per manent Representative of Benin at Geneva info@missionbenin.ch  
Ms. Josseline Da Silva Benin First Secretary, Embassy of Benin at Brussels 00 322 68 11 46 
Mr. Antoine Sitété Agbadome Benin Director, Ex ternal Trade, Ministry of Industry and Trade agbadome@yahoo.fr  
Mr. Joseph Paul Akle Benin Chambre du Co mmerce et de l'Industrie du Bénin   
Mr. Eloi Laourou Benin 2nd Secretary, Pe rmanent Mission of Benin Geneva   
Mr. Patrice Lagnon Sewade Benin Chargé de Mission patsewade@yahoo.fr  
Ms. Ernestine Attanasso Benin Reference Cent re Resp., Ministry of Industry 00 229 30 70 42 
Mr. Issa Coulibaly BOAD/WADB Vice- President, WADB Togo 00 228 221 5906 
Mr. Cheick Haidara BOAD/WADB Resident  Representative, Benin 00 229 31 59 35 
Mr. Yoro Diakite BOAD/WADB Economiste, WADB, Togo ydiakite@boad.org  
H.E. Amb. Kadré Désiré Ouedraogo Burkina Faso Ambassador/P ermanent Representative of Burkina Faso at Brussels ambassade.burkina@skynet.be  
Mr. Ambroise Marie Balima Burkina Faso Direct or-General of Trade, Ministry of Trade  mcia@cenatrin.bf  
Mr. Abdoulaye Ouedraogo Burkina Faso Economic Counsellor, Perm anent Mission of Burkina Faso at Brussels 00 322 345 9912 
Mr. Augustin Zagre Burkina Faso Delegation of Burkina Faso   
Mr. Célestin Tiendrebeogo Burkina Fa so Delegation of Burkina Faso   
H.E. Amb. Ndjemba Endezoumou Cameroon Ambassador/Permanent  Representative of Cameroon at Geneva 00 41 22 787 5040 
Mr. Mohamadou Alba Cameroon Inspecteur Général, Minist ère du Développement Industr iel et Commercial   
Mr. Hamidou Hassane Cameroon Sous-Directeur du Commerce, Ministère du Développement Industriel et Commercial hamid_hassane@yahoo.fr  
Mr. Isaac Nguehoung Cameroon Chargé d'Etudes Assistant, Mi nistère du Développement Indus triel et Commercial   
Ms. Lorraine Bélisle Canada Directrice, Bu reaude la Coopération Canadienne, BCC-Bénin lbelisle@internetbcc.com  
Mr. Gilles Hounkpatin CEDEAO Di recteur des Politiques Commerciales et Douanières, Nigéria ghounkpatin@hotmail.com  
H.E. Amb. Abderahim Yacoub N'Diaye Ch ad Ambassador/Permanent Representative of Chad at Brussels 00 322 215 1975 
Mr. Nadjinangar Mirangaye  Chad Economic Couns ellor, Embassy of Chad at Brussels   
Mr.  Ibrahim Malloum Aissaram Chad Commerci al Counsellor, Embassy of Chad at Paris ibrahim_malloum@yahoo.fr  
Mr. Manasset Guealbaye Chad Commissionner of Trade and Competition, Ministry of Trade mguealbaye@yahoo.fr  
Mr.  Baisheng An People's Rep. of Chin a Senior Staff, Ministry of Commerce anbaisheng@mofcom.gov.cn  
Mr. Liu Jie People's Rep. of China Se nior Staff, Ministry of Commerce liuj@mofcom.gov.cn  
Mr. Rengang Huang People's Rep. of China Counse llor, Permanent Mission of China at Geneva huangrengang@hotmail.com  
Mr. Tianfang Qin People's Rep. of Chin a Official, Ministry of Agriculture qtiamfang@agri.gov.cn  
Mr. Kouakou Adrien Kouadio Côte d' Ivoire Counsellor, Permanent Missi on of Côte d'Ivoire at Geneva kouadio.adrien@bluewin.ch  
Mr. Abel Vangah Côte d'Ivoire Director of E xportation Productions, Ministry of Agriculture   
Mr. Roger Gnango Côte d'Ivoire Counsellor, Embassy of Côte d'Ivoire at Brussels gnangoroger@hotmail.com  
Mr. Lassina Sanogo Côte d'Ivoire Director, Ministry of Trade sanogolassina@hotmail.com   
  WT/L/587
 Page 169Mr. Fidele Sambassi  Dem. Rep. of C ongo Delegate, Permanent Mission of Dem. Re p. of Congo at Geneva 00 41 22 740 16 80 
Ms. Patricia Dibata Apel Dem. Rep. of  Congo 2nd Secretary, Ministry of Forei gn Affairs and International Co-operation patricia_dibata@yahoo.fr  
H.E. Amb. Iversen Denmark Ambassador/Permanent  Representative of Denmark at Geneva   
Mr. Pierre Defraigne EC Deputy Director-General, EC/DG Trade, Brussels pierre.defraigne@cec.eu.int  
Mr. Hans-Christian Beaumond EC Prinicipal Administrator, EC/DG Development, Brussels   
Mr. Philip Mikos EC Head of Unit,  EC/DG Development, Brussels philip.mikos@cec.eu.int  
Mr. Henny Gerner EC Policy Adviso r, EC/DG Development, Brussels henny.gerner@cec.eu.int  
Mr. Franco Nulli EC Head of Delegation, Cotton Delegation, EC Benin de legation-benin@cec.eu.int  
Mr. Martin Pilser EC Counsellor, Cotton Delegation, EC Benin martin.pilser@cec.eu.int  
Ms. Ulla Olsson EC Counsellor, Cotton Delegation, EC Benin delegation-benin@cec.eu.int  
Dr. Cornélius Mwalwanda  ECA Principal Advisor, ECA Geneva cmwalwanda@unog.ch  
Mr. Mohamed El Yamany Egypt Sr. International Trade Law Researcher, Ministry of Foreign Trade m_meenna2001@yahoo.fr  
Mr. Ahmed Talaat El Libedy Egypt Counsellor,  Permanent Mission of Egypt at Geneva   
Mr. Esayas Gotta Seifu Ethiopia 1st Secretary, Permanen t Mission of Ethiopia at Geneva mission.ethiopia2itu.ch 
Mr. Asefa Aga Ethiopia Agricultural Economist, Ministry of Trade and Industry asefaaga@yahoo.com  
Mr. Brook Debebe Ethiopia Deputy Mission Head, Brussels  
Dr. Shangnan Shui FAO Representative FAO, Rome, Italy shangnan.shui@fao.org  
Dr. David Hallam FAO Chief, Commodities and Trade Division, FAO, Rome, Italy    
Mr. Themba Masuku FAO Director, FA O Office at Geneva tmasuku2unog.ch 
Mr. Mohamadou El Habib FAO Repres entative FAO, Benin 00 229 314 242 
Mr. Robert Van Otterdijk FAO Fonc tionnaire d'Agro-industrie, FAO Ghana robert-vanotterdijk@fao.org  
Mr. George Osieku Ghana Financial Cont roller, Ministry of Agriculture   
Mr. Clement Nyaaba Ghana Minister, Permanent Mission of Ghana at Geneva 00 41 22 909 04 50 
Mr. Emmanuel Awuri Ghana Minister Counsellor, Embassy of Ghana at Brussels 00 322 705 8220 
Mr. Abraham Laryea Odai Ghana Senior Industrial Pr omotion Officer, Ministry of Trade and Industry abeodai@yahoo.com  
Mr. A. Akamboe Ghana Manager Public Re lations, Ministry of Agriculture   
Mr. Aliou Diallo Guinea 1st Secretary,  Embassy of Guinea at Brussels  
Mr. Carlos Vaderrama Becerra ICAC H ead Economist, ICAC, Washington, USA carlosv@icac.org  
Mr. Cyrille Briançon IMF Division Chief, A frican Department, IMF, Washington, USA cbriancon@imf.org  
Mr. Murat Yalek IMF Resident Representative, Benin  
Mr. Joseph Smadja ITC Deputy Executive-Director, Geneva smadja@intracen.org  
Mr. Matthias Knappe ITC Senior Market Development Officer, Geneva knappe@intracen.org  
Ms. Lilia Naas ITC Senior Trade Promotion Officer, Geneva naas@intracen.org  
Mr. Ben Fadhl Abdelkrim ITC Coordina teur du Programme JITAP, Genève benfadhl@intracen.org  
Mr. Kunito Imai Japan Official , Ministry of Foreign Affairs kunito.imai@mofa.gov.jp  
Mr. Masahir Bamba Japan Senior Regional Coordinator, Ministry of Foreign Affairs 00 81 3580 3311 
Mr. John Gitara Muraya Kenya Senior Trade Officer, External Trade, Ministry of Trade and Industry kextrade@africaonline.co.ke  
Ms. Mary  Wairimu Githaiga Kenya Agricultural Officer, Kenya 00 254 20 271 9013 
Mr.  Wanjala Kisuya Rabson Kenya 1st Secret ary, Permanent Mission of Kenya at Geneva wrabson@hotmail.com  
Mr. Solofo Razafitrimo Madagascar Economic Counsellor, Brussels   
Mr. Pierrot Andriamiandrisoa Madagascar Counsellor, Perm anent Mission of Madagascar at Geneva 00 41 22 740 1650 
Mr. Charly Rakotonandrasana Madagascar Commissaire du Commerce et  de la concurrence, Ministère du Commerce 00 261 32 0448 493 
H.E. Dr. Jerry A.A. Jana Malawi Am bassador/Permanent Representative of Ma lawi to the EC in Brussels   
Mr. Alan A. Chipasula Malawi Permanent Repres entative of Malawi to the EC in Brussels embassy.malawi@skynet.be  
Mr. Time Fatch  Malawi Principal Economist, Ministry of Agriculture and Food Security tfatch@agriculture.gov.mw  
Ms. Christine Mtambo Malawi Chief Agricultural Officer, Ministry of Agriculture and Food Security cmtambo@yahoo.com  
H.E. Amb. Louis Marie Joseph Bastide Mali Ambassador/Perma nent Representative of Mali at Geneva 00 41 79 768 42 22 
Mr. Mohamed Askia Mali Counsellor,  Mission of Mali at Brussels askiamohamed@skynet.be  
Mr.  Abdoul Karim Sissoko Mali Head of Division, Exte rnal Trade, Ministry of Commerce 00 223 645 0164 
Mr. Alacoum Maiga Mali 2ème Conseiller, Mission permanente de Genève mission.mali@bluewin.ch  
H.E. Amb. Jaynarain Meetoo Mauritiu s Ambassador/Permanent Rep. Geneva  and WTO African Group Coordinator mission.mauritius@ities.itu.int   
 WT/L/587 
Page 170 Mr. Vishal Anand Luchoomun Mauritius 2nd Secr etary, Embassy of Mauritius at Brussels vluchoomun@mail.gov.mu  
Mr Mohammed Benjelloun Morocco Chief of WTO Servi ce, International Trade Relations of Foreign Trade benjelloun@mce.gov.ma  
Mr. Eugenio Fazenda Gove Mozambique Economist, National Cotton Institute, Mini stry of Agriculture and Rural Dvpt iampab@zebra.uem.mz  
Mr. Alberto Ana Maria Raquel Mozambique Commercial A ttaché, Permanent Mission of Mozambique at Geneva aalberto35@hotmail.com  
Mr. Karim Khalil NEPAD Coordinator Market Access, Nepas Secretariat, South Africa karimk@nepad.org 
H.E. Amb. Abdou Abarry Niger Ambassador/Permane nt Representative of Niger at Brussels   
Mr. Haboubakar Maman Niger General-Secretar y, Ministry of Commerce and Industry mhaboubakar@yahoo.fr  
Mr. Adani Illo Niger 1st Secretary, Embassy of Niger at Brussels adillo@skynet.be  
Mr. Ezikpe Egbuta Kalu Nigeria Counsellor, Perman ent Mission of Nigeria at Geneva 00 41 22 733 10 00 
Mr. Obinna Edwin Nnama Nigeria Minister, Emba ssy of Nigeria at Brussels 00 322 762 52 00 
Mr. Karim Hussein OECD Sahel and West Africa Club/OECD, Paris  karim.hussein@oecd.org  
Ms. Maria Niculescu OIF/AIF Director of the Economic Co -operation, Paris, France maria.niculescu@francophonie.org 
Mr. Marc-André Beaulieu OIF/AIF Conseille r en Affaires Economiques, Genève marc-andre.beaulieu@francophonie.org  
Mr. Reginal Bigue Kola RCA Chargé de Missi on, Ministère du Commerce et de l'Industrie bigue_kola@yahoo.fr  
Mr. Seydina A.s. Ndiaye Sénégal Commissaire aux Enquêtes Economiques, Ministère du Commerce seydina4@yahoo.fr  
Mr. Iba mar Oulare Sénégal 2nd Counsellor, Pe rmanent Mission of Senegal at Geneva   
Mr. Faizel Ismail South Africa Head of the South African Delegation to the WTO at Geneva faizel.ismail@ties.itu.int 
Ms. Sara Dien South Africa Investment Mana ger, Department of Trade and Industry  
Ms. Shareen Osman South Africa Sector Mangaer, Ministry of Trade and Industry shareen@isa.org.zq  
Mr. Liako Moahloli South Africa Senior Manager,  National Dpt of Agriculture 00 27 12319 7324 
H.E. Mr. Baddredin Sulieman Sudan Advisor to the President of the Republic of Sudan   
H.E. Mr. Hassan Numan Ali Sudan Assistant Director-General, Sudan Cotton Co-operation sccl@sudanmail.net.sd  
Mr. Elsiddig Abdalla Sudan Minister Plenipotentiary, Permanent Mission of Sudan at Geneva 00 41 76 436 0158 
Mr. Lucas Saronga Tanzania Minister Plenipoten tiary, Permanent Mission of Tanzania at Geneva saronga@mit.gov.tz  
Mr. Bede Lyimo Tanzania Assistant Director, Multila teral Trade, Ministry of Industry and Trade   
H.E. Amb. Kati  Ohara Korga Togo Ambassador/Permanent  Representative of Togo at Brussels 00 322 770 1791 
Mr. Anani Nyawouame Togo Minister Counsellor, Perm anent Mission of Togo at Brussels 00 322 770 1791 
M. Kossi Messan Ewovor Togo Directeur-général adjoint, So ciété Togolaise du Coton, Ministère de l'Agriculture sotoco@togo-imet.com  
Mr. Gnadi N'laba Pre Togo Financial Director, Société Togolai se du Coton, Ministry of Agriculture sotoco@togo-imet.com 
Mr. Afolé Ayawo Eklou Togo Director, Qua lity Department, Ministry of Trade  sent@laposte.tg  
Mr. Soumaila Cisse UEMOA/WAEMU President of the WAEMU Commis ion, Burkina Faso commission@uemoa.int  
Mr. Adrien Kohoue UEMOA/WAEMU Director of Cabinet, Rural Development, Burkina Faso commission@uemoa.int  
Mr. Alain Faustin Bocco UEMOA/WAEMU Director of Trade, UEMOA Commission, Burkina Faso alain.bocco@uemoa.int  
H.E. Amb. Ruhemba Kweronda Uganda Ambassador/Permanent Representative of Uganda at Geneva 00 41 22 339 80 10 
Mr. Hans Muzoora Uganda Cotton Developmen t Organization, Ministry of Agriculture cdo@africaonline.co.ug  
Mr. Julius Kagamba Singoma Uganda 1st Secr etary, Embassy of Uganda at Brussels ugembrus@brutele.be  
Mr. Cyprian Batala Uganda Assistant Commisione r for Multilateral Trade, Ministry of Trade  batalac@yahoo.ca  
Mr. Marcel Namfua UNCTAD Interregional Advisor, Geneva marcel.namfua@unctad.org  
Mr. Mehmet Arda UNCTAD Officer in Charge, Commodities Branch Office at Geneva mehmet.arda@unctad.org  
Mr. David Luke UNDP UNDP Office at Pretoria, South Africa david.luke@undp.org  
Mr. Moustapha Soumaré UNDP Resi dent Representative, Benin moustapha.soumare@undp.org  
Dr. Dhaoui M. Lamine UNIDO Senior Industr ial Development Officer, Vienna, Austria mdhaoui@unido.org  
Mr. Beer Budoo UNIDO Chief Technical Adviser,  UNIDO Project, Burkina Faso  00 226 33 15 12 
Mr. Abel Rwendeire UNIDO Managing Director, UNIDO Office at Vienna, Austria arwendeire@unido.org  
H.E. Amb. Linnet Deily United States of America Ambassa dor/Permanent Representative of the USTR at Geneva ldeily@ustr.gov  
H.E. Amb. Wayne E. Neill United States of America U.S. Ambassador to Benin, U.S. Department of State neillwe@state.gov  
H.E. Amb. J. Anthony Holmes United States of America U.S.  Ambassador to Burkina Faso, Special Representative to WAEMU holmesja@state.gov  
H.E. Amb. Christopher Goldthwait United States of America Ambassador, U.S. Depa rtment of Agriculture, Washington, USA christopher.goldthwait@fas.usda.gov  
Ms. Emmy Simmons United States of America Assistant Administ rator, Bureau for Economic Growth, USAID, Washington, USA emsimmons@usaid.gov  
Mr. Patrick Dean Coleman United States of America Director for African Affairs, Office of the USTR, Washington, USA   
Mr. Faraaz Siddiqi United States of America Director for Trade and Capacity Building, Office of the USTR, Washington, USA    
  WT/L/587
 Page 171Ms. Roxana Henderson United States of America International Trade Specialist, U.S.  Department of Agriculture, Washington, USA   
Mr. Kevin Mullally United States of America Deputy Director, USAID, Mali kmullaly@usaid.org  
Mr. Modupé Broderick United States of America Acting Director, USAID, Benin mbroderick@usaid.gov  
Ms. Kristen Grauer United States of America Political Officer, U.S. Department of State, Benin grauerkk@state.gov  
Mr. Gregg Young United States of America Agricultural Attaché, Permanent Mission of the USTR at Geneva aggeneva@usda.gov  
Ms. Carleene Dei United States of America Mission Director, West Africa, Regional Programme, USAID, Ghana cdei@usaid.org  
Mr. Uri Dadush World Bank Director, Trade Department, Washington, USA udadush@worldbank.org  
Mr. John Baffes World Bank Senior Agricultural Economist, DECPG jbaffes@worldbank.org  
Mr. Louis Philippe Ong Seng World Ba nk Administrator, Washington, USA pongseng@worldbank.org  
Mr. Ousmane Badiane World Bank Lead Ru ral Development Specialist, Africa Vice-Presidency, Washington, USA   
Ms. Isabel Matyola Lemba Zambia 1st Secretary, Permanent Mission of Zambia at Geneva zambia.mission@ties.itu.int  
Ms. Beatrice Mutetwa Zimbabwe  Minister, Permanent Mission of Zimbabwe at Geneva   
Mr. Cecil Chinenere Zimbabwe  Embassy in Brussels   
Ms. Nancy Zitsanza Zimbabwe  Chief Agricu ltural Economist, Ministry of Agriculture zitsanzan@yahoo.com  
    
 Total:   163 
    
 
 
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