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 Sub-Committ ee 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 6th Round of the Director -General's  
Consultative Framework Mechanism on Cotton1 
23 November  2016 
 
 
 
1  INTRODUCTION   
1.1  The 26th Round of the Director -General's Consultative Framework Mechanism on Cotton 
(DGCFMC) took place on 23 November  2016, under the chairmanship of Deputy Director -General 
David  Shark .  
STATEMENT BY THE C4 COORDINATOR  
1.2  The Ambassador of Mali , speaking on behalf of the C4 countries and all other cotton -producing 
countries fro m ACP, Africa and  LDCs, expressed di sappointment at the lack of progress in the 
negotiations on the cotton dossier.    
1.3  She made reference to the C4 Ministerial meeting held in Bamako from 26 to 
28 October  2016, whereby Ministers reaffirmed the importance of the cotton sector in their 
countrie s and made an earnest appeal to eliminate all kind of  export subsidies and  domestic 
support for the cotton sector in the run up to the Eleventh WTO Ministerial Conference (MC11) to 
be held in Buenos Aires, Argentina, in December  2017. 
1.4  She expressed concern  with the continued  drop of international cotton prices which, 
compounded by high production costs , constituted a high obstacle for African countries to  continue  
reform ing their cotton sector  and enhancing  their competitiveness.   
1.5  She thanked  North -South a nd South -South partners for their technical assistance and 
financial support to develop the cotton sector in Africa.  She expressed appreciation to  China for its 
financial support which had made possible  the participation of the C4 focal points in the DGCFM C. 
She encouraged donor countries  to facilitate the participation of other LDC cotton sector focal 
points in the DGCFMC consultations . 
1.6  The Ambassador of Benin , speaking on behalf of the LDC Group , stressed that the cotton 
sector  for LDCs  in Africa was of u tmost  importance  for their economies . He pointed out  that WTO 
Members should tackle the issue of domestic support for cotton  which had not been addressed 
satisfactorily  for the past 14 years . He urged developing country Members to implement the 
commitments  on cotton in relation to export competition as of 1 January 2017 . 
 
                                                
1 This document has been prepared 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 6 • WT/CFMC/5 4 
 
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  COTTON PRODUCTION AND TRADE TRENDS  
1.7  The Executive Director  of the International Cotton Advisory Commi ttee (ICAC), Mr. José Sette , 
informed participants that cotton production in Africa had been rising in recent years and 
represented  7% share of total world output . He underscored that Africa was heavily dependent on 
cotton exports, which accounted for 80% of its production. African share of cotton exports had 
reached 18% in the world in the l ast season.  
1.8  He highlighted that ICAC had launched, in collaboration with the FAO,  some pilot experiences 
under  the Expert Panel on the Social, Environmental and Economic Performance of Cotton  (SEEP)  
to measure the sustainability of the cotton sector  across  a range of countries , by harmonizing data 
gathering on different costs and evaluating the environmental, economic and social impacts of the 
global cotton industry.  
1.9  He under scored  that the net costs of cotton lint productio n worldwide had fallen from 
US$1.50 in 2012/13 to US$1.16 in 2015/16. He made  a detailed presentation on the different 
components of cotton production  (i.e. seeds, fertilizers,  pesticides, irrigation,  harvesting and 
ginning)  and their concomitant share in the total costs. He presented a  comparison of pr oduction 
costs between the top five  cotton producers in the world and the principal  African producers.  
1.10  Responding to some queries from the delegations of Benin, Burkina Faso, Pakistan and 
Senegal in respect of some statistics, the Executive Director of the ICAC highlighted that, even if 
some data  on a particular country  merited  to be taken wi th a great deal of caution, global statistics  
constituted valid indicators of general trends , such as the evolution of the average costs of 
production ac ross the most important producers . He stressed that cotton was a n important factor 
in poverty alleviation  in Africa . He said that in future presentations the ICAC would be focusing on 
different policies that could  help stimulate value addition in cotton producing countries.  
DIRECTOR -GENERAL'S EVOLVING TABLE ON COTTON  DEVELOPMENT ASSISTANCE  
1.11  The Chairman , in introducing item 4 of the agenda , made reference to the 22nd version of 
the Evolving Table  (ET), circulated on 2 November  2016 and contained in document 
WT/CFMC/6/Rev.21.  
1.12  He informed participants that he had undertaken consultations with major players  regard ing 
the structure of the content of the ET, in particular, in con nection with Part III of the ET. Part III  
listed available resources, mainly from the  IMF and the World Bank, that could be used to support 
the cotton sector on the basis of national development or poverty -reduction priorities. It was  noted 
that ascertain ing the precis e amounts from those available resources t hat were actually devoted to 
the cotton sector  was a challenging task .  
1.13  He highlighted  that, following his consultations with several Members on the issue, there was 
agreement to focus the contents of the ET on committed resources. As a result, he believed it was 
pertinent  to allow the ET evolve agai n by making it a streamlined and more focused tool, showing 
development assistance from donors under " committed" resources only, registered in Part I and 
Part II. Therefore, from the next version onwards, the ET would not have Part III. The information 
on those "available" resources would be available on the relevant websites of the IMF and the 
World Bank.  
1.14  He invited Mr. Gerardo Melogno, from the  Development Division, to show the main updates 
of the latest version of the ET.  
1.15  The representati ve of the Secretariat (Mr . Gerardo Melogno ), reported  that the latest version 
of the Evolving Table had been prepared on the basis of contributions from Australia, Brazil, 
Canada, France, Japan, the Netherlands and the United States.  
1.16  He noted that in Part I of the ET, relating to the ongoing activities of cotton specific 
development assistance, the number of beneficiaries had remained stable at 31, while the number 
of commitments had decreased slightly to reach 35.  The total value of commitments had 
decreas ed from US$294 million to US$280 million , while the total value of disbursements had TN/AG/SCC/W/2 6 • WT/CFMC/5 4 
 
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  decreased from US$115 to US$99 million.  He underscored that the ratio of total disbursements to 
total commitments had slipped from 39% to 36%.  
1.17  With reference to Part II of  the ET, concerning ongoing activities under the framework of 
agriculture and infrastructure -related assistance, he said that the number of beneficiaries had 
increased to 31 as well as the total number of commitments which had reached 67.  The value of 
comm itments had jumped from US$3.47 billion to US$4.11 in the revised version.  The total value 
of disbursements had increased to US$1.88 billion and the ratio of total disbursements to total 
commitments had decreased to 46%.  
1.18  As far as the completed activities  were concerned, he said that the total value of 
commitments in Annex 1, showing finalized activities under cotton specific development 
assistance, had increased to US$580 million whereas the actual disbursements amounted to 
US$484 million. With respect to  the completed activities in Annex 2, under the framework of 
agriculture and infrastructure -related assistance, total commitments and disbursements had 
increased to US$4.29 billion and US$4.25 billion, respectively.  
1.19  While commending the donor community for  its latest contributions, the representative of 
the Secretariat highlighted that there was still room for improvement, in particular, regarding 
some long -standing activities, for which updates were needed.  
1.20  In respect of the notification of National Cotton  Sector Focal points, he noted that a min or 
improvement had been registered whereby their total number had increased to 16. He encouraged 
other African cotton -producing countries to communicate the names and coordinates of their 
national focal points to co mplete the list.  
1.21  The representative of Benin  made reference to  the decreasing ratio of disbursements to 
commitments in Parts I and II of the ET. He pointed out that several long -standing projects in the 
ET showed no disbursement and encouraged donor partne rs to expedite the completion of those 
activities.  
1.22  The representative of Japan  intervened to make reference to his country's  19 new projects in 
Part II of the ET, which showed the  continued  engagement of Japan in  support ing the African 
cotton sector.  He un derlined that Japan would sustain  support ing the productivity of the 
agricultural sector and the enhancement of public -private partnerships in Africa in that area.  
SOUTH -SOUTH COTTON COOPERATION  
1.23  The representative of Brazil  underscored that his country had  renewed its commitment to 
provide technical assistance to cotton -producing countries as a tool to promote economic and 
social development. He pointed out that Brazil had decided to provide support  to two projects  on 
cotton  submitted by Benin and Mali.  
1.24  The representative of China  said that his country had continued its current  initiatives to 
provide support to the C4 countries and other LDCs.  
1.25  The representative s of Benin, Burkina Faso, Chad and Mali  expressed their appreciation to 
Argentina, Brazil,  China, Egypt, India, Pakistan and South Africa for their technical and financial 
support. The C4 representatives thanked China, in particular,  for its financial support in the 
framework of the recently held Bamako Ministerial Meeting , as well as the participation  of the C4 
focal points at the DGCFMC meeting.  
1.26  The representative of Benin , speaking on behalf of the LDC Group , extended sincere thanks 
to South -South partners for their collaboration on cotton. He  announced  that LDCs would be 
submitting national and regi onal project s with the objective of improving  cotton production, 
productivity and processing in the cotton  value chain . He made reference to the C4 Ministerial 
Meeting held in Bamako on 26 -28 Octobe r 2016  whereby the terms of reference of the regional 
project "Cotton Ro ad" were validated . Speaking for his own country, h e referred to the three 
project s that were generously  supported  by Brazil for the rehabilitation of lint  classification ; the 
reorganization of the cotton sector by zones, and cotton -seed contamination prevention , 
respectively . TN/AG/SCC/W/2 6 • WT/CFMC/5 4 
 
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  1.27  The representative of Burkina Faso  expressed her delegation's  gratitude to  all its 
development partners for providing funding and expertise to develop the cotton sector, particularly 
in the C4 countries. She expressed  support for the  C4 initiatives  such as the "Cotton Road"  
project , which intended  to improve the competitiveness and create sustainable value chains in the 
cotton  sector . 
1.28  The representative of Chad  thanked  the develop ment partners for their support and 
acknow ledged contributions being made by  Brazil, China and India. He highlighted a number of 
recent  projects undertaken in Chad such as the  building of a soil laboratory  supported by Brazil  
and reinforced cooperation  with India,  in the area of ginning and  settin g up of  tractor assembl y 
factories . He urged the donor community to support  the projects on cotton that have  been 
submitted.  
DOMESTIC COTTON SECTOR AND OTHER REFORMS/NATIONAL COTTON SECTOR FOCAL 
POINTS  
1.29  The Chairman  invited  comments on the latest version of  the ET circulated  on 
2 November  2016 in document  WT/CFMC/6/Rev.21. He mentioned that there were new inputs 
received from Benin and Côte d'Ivoire  and that there were updates from Burkina Faso, Chad and 
Mali on their initiatives. The document indicated  that good level of progress was being made by 
the C4 countries in reforming their domestic cotton sector.                                                                                                                                                                                                                       
1.30  The represe ntative of Mali explained that up to four million people were involved in the 
cotton sector in his country. He stated that since the Government relinquished control of the 
cotton sector in 2010 the yield increased from 852 kg per hectare to more than 1  tonne per 
hectare in 2015/16. He added that cotton exports increased from 103,000 tonnes in 2014 to 
231,000 tonnes in 2015. He specified that his Government  currently  provided  farmers with access 
to seeds and  subsidised  fertilizers and tr actors. In addition, recently set -up Chinese -owned cotton 
mills and ginning factories were expected to process up to 25 % of Mali's total cotton production  for 
2016/17 . 
1.31  The representative of Chad informed the  meeting that the cotton sector was currently being 
affected by a fall in the price and a regional armed conflict in the last two years. H e stated that his 
Government had  been restructuring the cotton sector since 2010 , and that in 2010/11 the country 
produced 52,000 tonnes ; the production reached 142,000  tonnes in 2014/15. The projected 
production for 2015/16 and 2016/17 was 180,000  tonnes and 2000,000  tonnes, respectively.  The 
Government's current objective for this sector was to reach 300,000 tonnes by 2 017/18. In order 
to achieve this target, the Central Bank was to guarantee  the Central African CFA francs  30 billion 
to develop logistics and build infrastructure  for the next three years. He also expressed  confidence  
that WTO Members  could  find a solution  on trade distorting  subsidies  in agriculture , which were 
having a negative impact  on the domestic cotton sectors, particular ly in the C4 countries.   
1.32  The representative of Benin  stated  that his Government had  taken over the management of 
the domestic cotto n sector since 2012 , as it was not satisfied with the performance of this sector 
since its full liberalization  in 2008. In 2016,  however, the Government had  changed its approach 
towards managing the sector . A transition committee , made up of both  Governmen t and  the 
private sector  representatives , was set up to manage the domestic sector . The immediate task of 
this Committee was to ensure effective administration  of the 2016/17 harvest. He mentioned that 
the country's only six companies could participate in this year's harvest. However, in order for 
them to participate, they were required to provide an upfront payment which was equivalent to 
40% of the value of their allocation. Cotton lint had been valued at West African CFA francs 270/kg 
and second choice a t CFA francs 220/kg. Some revenues to be earned from cotton sales would be 
allocated to  areas which ha d been identified as critical to improving  the functioning of the  sector.  
1.33  The representative of Burkina Faso  informed  that reforms were being undertaken , such as  
amend ing legislation related to th e registration of cooperatives ; recruitment of a financial 
institution to manage a cotton fund  - which w ould assist farmers to buy inputs at lower prices ; and 
to implement  cotton seed pricing based on international  prices. He sought financial support from 
development partners, to replenish funds in the country's price stabilization fund - which assist ed 
their cotton producers  when prices f ell below a specified  level. He mentioned that the domestic 
sector had been  facing a number of difficu lties such as parasite infestations  and adequate water TN/AG/SCC/W/2 6 • WT/CFMC/5 4 
 
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  supply to producers. Despite  these difficulties , the use of non -GMO seeds  and a return  to 
traditional farming methods this year, 740,000  hectares were sow ed compar ed to 
660,000  hectares in 2015 , and the expected yield for 2016/17 was 730,000 tonnes.  
1.34  The Chairman  urged  the LDCs , in particular the C4 countries , to provide regular inputs to the 
Secretariat and re quested cotton proponent countries , which ha d not done so, to submit  the 
contact details of  their national  focal points . 
2  CONCLUSION  
2.1.  The Chairman  concluded the meeting by highlighting the importance Director -General 
Roberto Azevêdo  attache d to the cotton dossier . He commended the participants at the DGCFMC  
for their efforts in  reviewing the contents and the structure of the ET. The ET on cotton would 
henceforth focus on committed resources related to the cotton sector. The work in this body 
consolidate d the development dimension of the multilateral trading system. He reiterated  that the 
Secretariat w ould continue to assist this process through monitoring and reporting on progress of 
cotton -related activities , and urged regular reporting to the WTO Secretariat database .  
2.2.  He announced that the next round of consultations would tak e place  in the first half of next 
year, and that it would be hel d back -to-back with the next dedicated discussion to examine 
relevant trade -related developments on cotton in the context of the Committee on Agriculture in 
Special Session. The Secretariat wo uld consult with regard to the specific dates.  
 
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