WORLD  TRADE 
ORGANIZATION WT/CFMC/22 
4 September 2009 
 
 (09-4181) 
 Original:   French 
  
 
DIRECTOR-GENERAL'S CONSULTATIVE FRAMEWORK 
MECHANISM ON COTTON 
 
Communication from Chad
 
 
 
 The following communication, dated 20 April 2009, is being circulated at the request of the delegation of Chad.  
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BRIEF NOTE ON THE PROCESS OF COTTON 
SECTOR REFORM IN CHAD 
 
 I. GENERAL CONTEXT OF THE REFORM 
1. Cotton is of major economic and social importance to Chad as it has a direct impact on the 
majority of the population in terms of income and services.  It is produced by around 350,000 producers for whom it is the main source of cash income. 
2. It is the country's main export, accounting for up to 40 per cent of export revenue and 
therefore playing a key role in Chad's economy after oil, which has only been exported since 2003.  
The cotton sector is the leading borrower from the ba nking and financial system and the main source 
of subcontracts and supply contracts. 
3. Unfortunately, the performance of  the cotton sector has been ha ndicapped in recent years by 
several factors, namely: 
(a) Low productivity; 
(b) lack of support for producers; 
(c) lack of organization of producers; 
(d) lack of local processing of seed cotton; 
(e) lack of marketing; 
(f) the drastic fall in world cotton prices in r ecent years due to the massive agricultural 
subsidies granted by industrialized countries, which has damaged the sector. 
 WT/CFMC/22 
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  4. Average production over the last decade has been 165,000 tonnes of seed cotton.  If there is 
one economic sector which is ope n to international competition and in which Chad has invested 
considerable effort to make it competitive enough to  enjoy a clear comparative advantage, it is the 
cotton sector.  Unfortunately, the cotton sector has been  facing enormous difficulties for several years.  
Significant steps have been taken to revive cotton production.  To that end, the Government of the 
Republic of Chad has undertaken to devise a nd implement a cotton sector reform strategy. 
II. OBJECTIVE OF THE REFORMS 
5. The key objective of these reforms is to make the cotton sector profitable and promote a 
sustainable increase in the income of cotton produ cers, in order to reverse the impoverishment trend 
observed. 
III. IMPLEMENTATION TOOL FOR THE REFORMS 
6. To implement these reforms, the Government has set up a cotton sector reform task force (the 
CTRC) with a mandate to: 
(a) Lead and coordinate reflection on the cotton sector with the various partners with a 
view to submitting a proposed short- and medium-term reform strategy to the 
Government; 
(b) monitor the implementation of the cotton sector reforms approved by the 
Government.  In this context, the CTRC will work with the departments or bodies 
concerned; 
(c) report to the coordinator of the economic group which forwards its reports to the 
Technical Committee for the structural ad justment programme, and further to the 
High-Level Inter-Ministerial Comm ittee for review and approval. 
IV. COTTON SECTOR REFORM STRATEGY 
7. The strategy was defined in several stages, be ginning with a diagnostic study of the cotton 
sector carried out in March 1999 by an independent  consultant.  Based on the questions arising from 
the sector diagnosis, three reflection workshops brin ging together all the partners in the cotton sector 
were organized in September a nd October 1999 in the cotton-grow ing zone.  These workshops served 
to identify the key lines of approach which guided th e preparation of a draft strategy document.  The 
draft reform strategy document was valid ated during a national seminar attended by 
Chadian Government representatives and profession als, donors, NGOs and others.  It was then 
examined three times by the High-Level Inter-Min isterial Committee before being adopted at its 
session held on 7 December 1999.  The document was finally reviewed and adopted by the 
Government at the special session of the Council of Ministers held on 18 December 1999.  The 
adoption of the strategy document setting out the desired action guidelines was endorsed by 
Decree No. 541/PR/MPDEC/99 of 31 December 1999. 
8. The reform comprises three main features: 
(a) The first feature concerns immediate measures to be implemented to reduce the 
impact of the crisis and stimulate the sector.  These measures are aimed at the sector's 
key stakeholders, namely the producers, Chad's cotton company (the Société 
Cotonnière du Tchad , Cotontchad) and the State;  WT/CFMC/22 
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  (b) the second feature relates to the institu tional and political measures including the 
State's withdrawal from the capital and administration of Cotontchad as well as the liberalization of this sector; 
(c) the third feature relates to support measures for producers. 
9. In addition, a road map for the privatization of Cotontchad was drawn up by the Government 
in conjunction with donors.  This road map details  the steps prior to the State's withdrawal from 
Cotontchad and the conditions for the company's recovery. 
V. IMPLEMENTATION STATUS OF THE REFORM STRATEGY AND OUTLOOK 
A. I
NSTITUTIONAL MEASURES  
(i) Separation and privatization of the Oil and Soap-Making Division (DHS) 
10. DHS has been separated from Cotontchad. 
(ii) State withdrawal from Cotontchad 
11. Two scenarios have been presented to the Government by the Technical Committee 
responsible for implementing the cotton sector refo rm for the purpose of selecting the final scenario 
for the privatization of Cotontchad. 
12. The State's desire to withdraw from Cotontchad is reflected in the adoption of a road map and 
the setting up of a technical team responsible for implementing it.  The withdrawal is designed to: 
(a) Refocus the State on its supreme functions and on the general running of the 
economy, 
(b) ensure the sustainability of the sector, 
(c) safeguard the interests of producers, 
(d) improve plant efficiency. 
13. With this road map, the authorities have defi ned the outlines and rules for the cotton sector in 
a liberalized environment after determining the pro cedures and conditions of withdrawal.  They have 
also taken options on a number of activities regarded  as critical functions.  To that end, the Committee 
has drafted two recommendation notes, one on the ou tlines and future operation of the sector and the 
other on the future of the critical functions. 
(iii) Joint Committee 
14. A Joint Committee of producers and Cotontchad has been set up.  Its creation and its remit 
were endorsed by Order No. 002/MICA/DG/01 of 9 April 2001.  Each year, the Joint Committee determines the purchase price of seed cotton for th e season based on the existing price mechanism and 
the sale price of agricultural inputs.  It also negotiates the amount paid for services provided by 
village associations (VAs) and particularly for any new services provided by VAs as part of the cotton 
sector reform.  The producer members of the Joint Committee are present at the opening of bids for 
inputs. WT/CFMC/22 
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  15. Since it was established, the Joint Committee has been operational.  Cotton and input prices 
are no longer set by ministerial order;  they ar e determined by the minutes of the meetings of the 
Joint Committee.  As cotton producers' organiza tions develop and Cotontchad is privatized, the 
Joint Committee will evolve into a cotton trade association. 
B. A
CCOMPANYING MEASURES  
16. These measures are aimed at improving the circumstances of cotton producers.  The main 
measure involves structuring producers' organizatio ns to form local coordination committees (LCCs) 
in each ginnery area and strengthening  the capacities of these organizations. 
  
   WT/CFMC/22
 Page 5ANNEX  
 
TABLE ON DOMESTIC COTTON SECTOR REFORMS FOR ENHANCED DEVELOPMENT ASSISTANCE  
 
 
Cotton 
proponent Measure Description Implementation 
date/status Enquiry point Reform priorities 
CHAD Decree No. 541/PR/MPEDC/99 Adoption of the strategy 
document on cotton sector reform in Chad  31 December 1999 maismail@intnet.td Definition of the cotton sector 
reform strategy 
CHAD Decree No. 720/PR/PM/SGG/CAB/05 Appointment of the 
technical team responsible for implementing the road 
map for cotton sector 
reform 20 September 2005 maismail@intnet.td Implementation of the road 
map for cotton sector reform as adopted by the Government 
(institutional reform) 
CHAD Order No. 001/MPEDC/2000 Creation of a task force 
responsible for 
implementing cotton sector reforms 17 January 2000 ctrc@intnet.td  Organization and coordination 
of capacity-building activities 
for cotton farmer associations 
 
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