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20 September  2016 
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 Sub-Committee on Cotton    
 
 IMPLEMENTATION OF TH E DEVELOPMENT ASSIST ANCE ASPECTS OF THE  
COTTON -RELATED DECISIONS IN  THE 2004 JULY PACKAG E AND  
PARAGRAPH 12 OF THE HONG KONG MINISTERIA L DECLARATION  
ITEM 2C - COHERENCE BETWEEN TR ADE AND DEVELOPMENT ASPECTS:  
UPDATE ON THE DEVELO PMENT ASPECTS OF COTTON  
Report of the 2 5th Round of the Director -General's  
Consultative Framework Mechanism on Cotton1 
1 July  2016 
 
 
 
1  INTRODUCTION   
1.1  The 25th Round of the Director -General's Consultative Framework Mechanism on Cotton 
(DGCFMC) took place on 1 July  2016, under the chairmanship of Deputy Director -General 
David  Shark .  
STATEMENT BY THE C4 COORDINATOR  
1.2  Ambassador Thiam Diallo  (Mali) , speaking on behalf of the C4 countries and all other cotton -
producing countries fro m ACP, Africa and  LDCs, said that the Nairobi Ministerial Decision on cotton 
constituted an encouraging step forward  towards  reaching a fair and balanced resolution of the  
cotton dossier. She reaffirmed  the C4's  commitment  to the multilateral trading system and its 
potential  to enhance the integration  of African countries into the global value chains.  She 
underscored that trade was the best development driver in the fight against poverty  and an 
important tool in reaching inclusive growth in Africa.  
1.3  She noted with satisfaction the continued mobi lisation of donors  as reflected in the  last 
version of the  Evolving Table  on Cotton Development Assistance . She underlined  that, despite 
some shortcomings due to insufficient rain in certain regions, cotton production  in the C4 countries  
had been steady  in 2016. However, s he expressed concern with the continued  downward trend  of 
international cotton prices .  
1.4  She thanked China for its financial support which had made possible  the participation of the 
C4 focal points in the DGCFMC, and encouraged all interest ed parties, including  developed and 
developing  country Members , to nominate their  focal points  so as to expand  the information 
exchange and b uild synergies  on the cotton issue  through  the Consultative Framework Mechanism.  
1.5  The Ambassador of Benin , speaking on behalf of the LDC Group , underlined the vital 
importance of the cotton sector in African cotton -producing countries. He brought to the attention 
of participants  that several  LDCs would be soon submitting  to the Secretariat  certain  regional 
projects on c otton for which they would be seeking support .  
1.6  The representative of Côte d'Ivoire  highlighted that his country had become the third largest 
cotton producer in Sub -Saharan Africa. The Consultative Framework Mechanism had been useful to 
foster support for its cotton sector. In that regard, he thanked developing and developed country 
                                                
1 This document has been prepare d under the Secretariat's own responsibility and is without prejudice 
to the positions of Members or to their rights and obligations under the WTO.  TN/AG/SCC/W/2 5 • WT/CFMC/5 3 
 
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  Members in particular  the EU, France, the Islamic Development Bank  and the World Bank  for 
providing  such financial and technical assistance . 
1.7  The representative of Pakistan  stated that the cotton  economy  was fundamentally important 
for his country. He pointed out that Pakistan had become  the fourth  largest  world  cotton producer 
and had the third  largest spinning capacity in Asia. He underscored that 40% of the industrial 
labour  in the country was linked to cotton and  1.5 million farmer families depended directly  on 
cotton  for their livelihood . Cotton growers in his country were facing major challenges.  Over the 
last three  years, cotton production had slipped  by 34%, not only due to  extreme weather 
conditions , but also because of subsidies  given by  certain countries . He thanked the EU for its 
support which had helped to mitigate tho se adverse consequences.  
COTTON PRODUCTION AND TRADE TRENDS  
1.8  The Executive Director  of the International  Cotton Advisory Commi ttee (ICAC), Mr. José Sette , 
gave a  detailed  presentation on  the organization of the cotton sector in Africa. His in-depth 
analysis  addressing the different typologies of competition (atomistic and concentrated) and the 
monopoly struc ture in various regions of Africa was followed by an assessment of the impact and 
sustainability of cotton price risk management. He also showed the purpose of, and the challenges 
involved in, contract farming arrangements, highli ghting , in particular , aspects of compliance, 
linkages between smallholders and markets, transparency, double contracts and the relationship 
between cotton and food crops . Mr. Sette also gave an account of the advantages , disadvantages 
and challenges of the different types of struc ture in terms of yield performance, employment, 
sharing of benefits , input credits, extension services  and promotion  of cotton by -products.  He 
emphasised that, even if some variables were not correlated with the structure of the sector, the 
way in which it  was organized did explain to a large extent the variability in performance.  
1.9  The representative of Bangladesh  said that his country was one of the largest cotton 
importers in the world and one of the leading exporters of garments. He commended the DGCFMC 
for being instrumental in  monitoring and  tracking assistance  that the donor community had given 
to the cotton  sector in LDCs.  He expected that in the future such support would continue  to help  
adequately  LDCs to improve their cotton production  and export s. He hoped that traders  in 
Bangladesh  could engage with African cotton -producing countries  so as to find mutually beneficial 
trade opportunities.  
1.10  The focal point of Mali  intervened to say that in his country cotton prices were  no longer 
based  on the producti on performance , but were the result of  a concerted price -fixing mechanism  
where  producers  were directly involved  in the decision -making process . He highlighted that the low 
yields  in Africa  were due, in part, to the rain -fed type of cotton cultivation  and also as a 
consequence of some  shortcomings  in the inputs ' supply  chain  in certain regions . He pointed out 
that efforts were being made to add value to cotton  seeds . He stressed  that the cotton premium 
quality was an important incentive  for cotton growers. He pointed out that  the total gross income 
made by  the local private cotton company was  split between  68% for producers and 32% for  the 
company . 
1.11  The focal point  of Benin  stated  that in his country cotton prices were fixed  at the beginning 
of the season to encourage farmers to plant cotton and those prices were adjusted at the end of 
the season in relation to international cotton prices.  There was an open debate on how best to 
address  price fluctuations  between the start and the end of the season . With respe ct to the 
persistent l ow yields  registered  in Africa , he observed stressed that  varieties  adapting  to local 
conditions and better extension services were key to increase productivity.  He expressed 
disappointment at the  low level of value-added  cotton by-products  made  in his country . Cotton 
was exported mainly  raw, missing in -country transformation opportunities . He finally underscored 
that, given the  prevailng  unattractive low prices  of cotton , the cotton production  area had been  
decreasing  markedly in Beni n.  
1.12  The focal point of Burkina Faso  underlined that the cotton sector in his country was divided 
by zones  amongst three  companies and that the re was a uniform  fixed cotton price,  reflecting 
world prices.  He commented that the "Smoothing Fund" had been  utilized recently  and its 
resources were  very low, as the r egional financing  component  of the Fund had not  materialized . He 
underscored that the cultivation of genetically modified  (Bt) cotton  in his country  had faced  a TN/AG/SCC/W/2 5 • WT/CFMC/5 3 
 
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  technical difficulty as the fibre  produc ed was shortened and , as a result,  the premium quality  for 
the crop had not been obtained.  In view of that significant  revenue loss , the Government had 
decided to reduce  momentarily the production of Bt cotton in o rder to recover the top quality . He 
highli ghted that an Inputs Fund had been established to manage the distribution of fertilizers  and 
stressed that in -country cotton transformation remained a  big challenge  that merited to be 
addressed .  
1.13  The representative of Nigeria  expressed  concern that Africa registered the  lowest cotton 
yields in the world  in the last season . He requested  participants if it was possible to share 
experiences that could help remedy the  situation and also could address some long-standing  
issues , such as after -harvest contaminatio n.  
1.14  The representative  of Chad emphasised  that the level of local transformation of cotton in 
Africa amounted to  just 2%. That posed a particular challenge in deriving development dividends 
from cotton . He underlined that r esearch  on cotton  should  be enlar ged to include  other actors, 
including  the private sector . 
1.15  The representative of Brazil  said cotton cultivation was part of Brazil's agricultural history 
and that it had influenced the role  that his country  had played  in international trade. Geography,  
history and  institutional and cultural features were important to analyse how markets were 
organized. He suggested  that participants should reflect on the best possible ways to reconcile the 
need to act on  development al long-term activities  on the one hand, w ith short-term and  specific 
projects  on cotton, on the other hand . 
1.16  The Executive Director of the ICAC , responding to some queries from the floor, agreed  that 
the involvement of cotton growers in the price -setting mechanism in Africa  was a positive step  
forward, but  suggested that some  flexibility tools were needed to enable the adjust ment of  prices 
between the start and the end of the seasons . He stressed that the most important ch allenge the 
African cotton sector faced  was the need to improve yields. In relation to the cotton t ransformation  
possibilities in Africa, he pointed out that the two major challenges  were the need to provide a 
low-cost and efficient supply of electricity as well as the need to improve further on logistics.  
DIRECTOR -GENERAL'S EVOLVI NG TABLE ON COTTON DEVELOPMENT ASSISTANCE  
1.17  The Chairman , in introducing item 4 of the agenda, made reference to the 2 1st version of the 
Evolving Table (ET), circulated to Members on 15 June 2016  and contained in document 
WT/CFMC/6/Rev. 20. He invited Mr. Ger ardo Melogno, from the Secretariat's Development Division, 
to highlight the main points of the latest version  of the ET.  
1.18  The representative of the Secretariat ( Mr. Gerardo Melogno ) informed participants  that the 
latest version of the Evolving Table had bee n prepared on the basis of inputs from Australia, Brazil, 
the European Union and some of its member States, Japan and Switzerland . He noted that the 
updates received from the Netherlands were not possible to include in the latest version , but would 
be refl ected in the next revision.  Inputs had also been received from the FAO, IMF and the World 
Bank.  
1.19  He highlighted that in Part I of the ET, concerning the ongoing activities of cotton specific 
development assistance, the number of beneficiaries had increased  from 28 to 29, and the total 
value of commitments had increased  from US$2 26 million  to US$2 94 million . The total value of 
disbursements  had increased to US$1 15 million from  US$102 million. He underlined that the ratio 
of total disbursements to total commi tments had declined  from 45% to 39%.  
1.20  With respect to Part II  of the ET , concerning  ongoing activities in the broader framework of 
agriculture and infrastructure -related development assistance, he underscored  that the value of 
commitments had decreased  markedly  from US$ 4.78 billion in the previous version to 
US$3.47 billion in the revised version. The total value of disbursements had slipped to 
US$1.76  billion and the ratio of total disbursements to total commitments had declined  to 51%. 
1.21  Regarding informati on on completed activities, he reported that the total value of 
commitments in Annex 1, listing finaliz ed activities under cotton specific development assistance, 
had increased to US$5 45 million and the actual disbursements related to those activities amou nted TN/AG/SCC/W/2 5 • WT/CFMC/5 3 
 
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  to US$4 50 million. Turning to the completed activities in Annex 2 , under the framework of 
agriculture and infrastructure -related development assistance, the total value of commitments and 
disbursements had increased to reach US$ 4.08 billion and US$ 4.04 billion, respectively.   
1.22  The representative of the Secretariat  commended donors for their latest updates which 
showed steady progress. He highlighted, in particular, the notable increase in the completion of 
activities in Part II a nd encouraged the donor  community to continue with that positive trend.  
1.23  As far as the notification of National Cotton Sector Focal Points was concerned, he noted  that 
their number had remained the same  at 15. He urged other African cotton -producing countries  to 
communicate the names and coordinates of their national focal points to complete the list.   
1.24  The focal point  of Japan  made reference to  the Sixth Tokyo International Conference on 
African Development ( TICAD VI ), which would be held for the first time in Africa in August 2 016. 
He said that his country would i mprove its notifications  to the Evolving Table  in the future . He 
stressed that Japan would continue to engage to enhance  the cotton sector in developing countries 
in general, and in African countries, in particular.  
1.25  The Ambassador of Benin, on behalf of the LDC Group , praised the  follow -up activities 
tracked  in the Evolving Table . He underscored that it would be useful to know the operational 
status of the projects listed in Part III of the ET under the World Bank and fo r which no 
disbursement sums were communicated . Furthermore, he wondered whether it was possible to get 
precise details of  the amounts that were specifically allocated to the cotton sector . 
1.26  The representative of the Secretariat  pointed out that, even if it was paramount to monitor 
the evolution of the ratio disbursements/commitments in the ET , particularly in relation to  projects 
with a long time -frame,  it was also important to take into account the dynamics  behind the 
numerical values , i.e. in respect  of new activities introduced and those which had been completed.  
SOUTH -SOUTH COTTON COOPERATION  
1.27  The representative of China  updated participants on his country's South -South  cooperation 
activities in favour of cotton producers in Africa, particularly in Benin , Chad and Mali.  He 
announced that four  workshops on cotton would be  organized by  China, three in favour of African 
cotton -producing countries , and one specifically for Chad . He underlined  that his country was  
about to complete  a high -speed road  in Benin w hich would facilitate the  transportation of cotton 
from remote areas . He highlighted that President  of his country had  announced at the Second 
Forum  on China -Africa  Cooperation  (FOCAC) held on 4  December 2015 in Jo hannesb urg, that 
China  would be launching 10 major plans to  boost cooperation  with Africa  by enhancing  
infrastructure and  helping modernize Africa's agricultural sector, including cotton, over the next 
three years . Those plans involved providing new seeds, fertilizers, agro-equipment  and facilit ating 
joint research  and technology transfer to African producers.  
1.28  The representative of Brazil  made reference to an independent evaluation of the  results of 
Brazil's  technical cooperation and capacity building programme in favour of the C4 countries in 
relation to  the introduction of  new cotton varieties adapted to local conditions, transfer of p lanting 
techniques and  development  of best agricultural practices  and extension support  materials . He 
updated participants on Brazil's ongoing three activities for the deve lopment of the cotton sector in 
the C4 countries , Togo,  Malawi and Mozambique . He also mentioned other activities  undertaken by 
Brazil  in support of several Latin American and Caribbean countries.   
1.29  The representative s of Benin, Burkina Faso, Chad an d Mali  expressed their gratitude to 
Brazil, China and India for their active cooperation in  the cotton sector. They thanked China  for its 
financial support which  allowed the participation of the C4 focal points at the meeting. The 
representative of Benin t hanked Brazil  for support ing three out of the five  projects  on cotton  that 
Benin had submitted and which had been recently  circulated by the Secretariat. The projects were 
designed to reinforce  the productive capacity of Benin  in the cotton sector  and would help 
integrate its economy in regional  and international cotton value chains . TN/AG/SCC/W/2 5 • WT/CFMC/5 3 
 
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  1.30  The Chairman  underlined the importance of South -South Cotton Cooperation  in the work of 
the DGCFMC . He encouraged other Members in a position to do so to  consider forging simil ar kinds 
of cooperation.  
DOMESTIC COTTON SECTOR AND OTHER REFORMS / NATIONAL COTTON SECTOR FOCAL 
POINTS  
1.31  The Chairman  made reference to the thirteenth  version of the Table on Domestic Cotton 
Sector Reforms for Enhanced Development Assistance which had been circulated on 15 June 2016  
as document WT/CFMC/21/Rev. 12, with new inputs  from Burkina Faso, Chad  and Mali.  He also 
noted the prevailing initiatives of Benin in that area. He mentioned that the recent submission 
received from Côte d'Ivoire would be duly reflected in the next version of the Table.  
1.32  He underscored  that the total number  of focal points  in Part IV of the Evolving Table  had not 
changed and remained at 15. He said progress was needed i n that area and urged  other cotton -
producing countries to desig nate and notify their Natio nal Cotton Sector Focal Points.  
1.33  The focal point  of Benin  pointed out  that in order to give impetus to the cotton sector in a 
public -private partnership dynamic , the Framework Agreement with the Cotton Trade Association  
(AIC) had been re -established  in April 2016 . Furthermore, in May 2016 a transitional Technical 
Committee betwee n the Government and the AIC had been  created to manage the  2016/17 
season  and ensure the  timely  implemen tation of the new reform measures . Moreover, Benin  had 
decided in June 2016 to discontinue  subsidising inputs fo r cotton .  
1.34  The focal point of Burkina Faso  commended Japan for its support to the cotton sector in the 
TICAD framework. He highlighted that the liberalisation of the cotton sector in Burkina Fas o was 
going ahead under the new zoning system. The governance tools and follow -up instruments which 
had been put in place were fully operational, such as the Inputs Fund, Smoothing Fund and  price-
fixing mechanism for cotton. The production forecast for the  2016/17 season  was of 750,000 tons 
of conventional cotton, as the cultivation of Bt cotton had been suspended.   
1.35  The focal point of Chad  stressed that the cotton sector, which constituted a major source of 
income for four million people in the country, was  confronted with big challenges. It was in that 
context that the Government had put in place in December 2015 various institutional and 
assistance measures to help cotton growers. Those measures included the creation of local 
coordination committees, the s etting up of two new ginning facilities, upgrading old mills and 
renewing a vehicle fleet for the transportation of cotton. The  national company  Cotontchad SN had 
drawn up a plan to increase cotton production to the level of 300,000 tons for the 2017/18 se ason.  
1.36  The focal point of Mali  made reference to  a re-organization and new strategic orientation  set 
up by governmental authorities to reinvigorate the cotton sector  aimed at enhancing the  industrial 
processing  of cotton and boosting  the national textile i ndustry . To that end, the  newly established  
"Compagnie malienne pour le dévelop pement du textile (C MDT)" would go through a state-
managed transitional phase after which it  would be opened  to private investors . He mentioned th at 
two new ginning facilities  would be constructed  in the country in the near future . As regards cotton 
production  in Mali , following an  increase of  25% in the 2014/15 season , the output dropp ed by 6% 
in the  2015/16  season,  mainly  due to lack of rain.  
2  CONCLUSION  
2.1.  The Chairman  concluded t he meeting by highlighting the enriching interaction amongst 
participants that had taken  place and  reiterating the importance that Director -General Roberto 
Azevêdo attached to the cotton dossier. He underscored that  the work of Members and  other  
participan ts in the Director -General's Consultative Framework Mechanism was widely recognized 
as helping consolidate the development dimension of the multilateral trading system. T he 
Secretariat would continue to assist th e process by monitor ing and report ing to Mem bers on new 
contributions, disbursements and operational status of activities listed in the Evolving Table as well 
as progress in the implementation of domestic cotton sector reforms. He stressed  the importance 
of regular and timely submissions  to the Secretariat's  cotton database.  TN/AG/SCC/W/2 5 • WT/CFMC/5 3 
 
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  2.2.  He pointed out  that South -South Cotton Cooperation was an important aspect of the 
implementation of the mandate on the development assistance aspects of cotton . The significant 
contributions of Brazil, China and India in that re spect were duly acknowledged  and appreciated by 
all participants in the Consultative Framework  Mechanism . 
2.3.  He announced that the next round of consultations would take place  in the second half of the  
year, and that it would be hel d back -to-back with the nex t dedicated discussion to examine 
relevant trade -related developments on cotton in the context of the Committee on Agriculture in 
Special Session. The Secretariat would consult with regard to the specific dates.  
 
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