WORLD TRADE  
ORGANIZATION  WT/CFMC/17 
28 May 2008 
 (08-2484) 
 Original:   French 
  
 
COTTON DEVELOPMENT ASSISTANCE – COTTON CO-SPONSORS' 
PRIORITY AREAS FOR SOUTH-SOUTH COOPERATION FOR 
DEVELOPMENT OF THE COTTON SECTOR 
 
Communication from Burkina Faso
 
 
  The following communication, dated 9 April 2008, is being circulated at the request of the delegation of Burkina Faso.  
_______________ 
 
 
I. THE COTTON SECTOR IN BURK INA FASO:  SUPPORT NEEDS 
A. I
NTRODUCTION  
1. The cotton sector of Burkina Faso requires support in order to raise the income of producers 
and ensure its long term survival. 
2. The current request for funding has been drawn up by the Association Interprofessionnelle du 
Coton du  Burkina  (AICB) within the framework of South- South cooperation for the development of 
the cotton sector.  It provides the other part of th e South with a summary of the projects for which 
cotton producers in Burkina Faso wish to obtai n support.  These projects involve the following 
priority areas: 
- Construction of infrastructure; 
- acquisition of agricultural equipment; 
- scientific research; 
- quality improvement; 
- establishment of an inputs fund; 
- mobilization of resources for the support fund; 
- mobilization of resources for the price smoothing fund, recently established by the 
Association Interprofessionnelle du Coton du Burkina ; 
- establishment of basic social infrastructure. 
3. The total estimate for the funding requested amounts to €197.1 million.  Brief details on the 
various projects are set out below. 
B. INFRASTRUCTURE  
(i) Silos 
4. If the quality of cotton is to be maintained sp ecial care is required at  several levels from 
harvesting via storage conditions to the industrial process.  Support for the construction of silos will WT/CFMC/17   
Page 2  
 
  make a huge contribution to the quality of the fibre by protecting the cotton from contaminants.  It has 
been calculated that this need can be met by about 300 ordinary covered silos at a cost of €7,000 per 
silo, i.e. a total cost of €2.1 million. 
(ii) Warehouses and buildings for collective use 
5. In order to help the Producers' Organizations to improve their capacities for the management 
of agricultural funds and to ensure the suppl y of inputs, it will be necessary to construct 
300 warehouses.  Similarly, if existing needs for mu lti-use centres (buildings that can be used for 
meetings, training courses and other community activities)  are to be met, it has been estimated that 
150 such centres will have to be constructed.  This will contribute greatly to strengthening the 
organizational capacities of the Producers' Organizations. 
6. The unit cost of these facilities has been assessed at €12,000, one third of which will be borne 
by the cotton farmers.  The overall total of the support requested amounts to €3.6 million. 
C. A
GRICULTURAL EQUIPMENT  
7. Under this heading 30,000 farms will be able to obtain basic equipment for animal-traction 
cultivation and the management of manure reservoirs .  Such basic equipment could be an ox-drawn 
multipurpose cultivator (plough, hoeing, soil-packing an d seeding, equipment, trailer, IR 12 teeth, 
barrows, draft animals).  The total amount is estim ated at €11.7 million.  Of this amount €4.7 million 
would be contributed by the cotton farmers th emselves and hence €7 million would need to be 
provided by outside support. 
8. Support for the funding of equipment could be provided by a partner for 50 per cent of the 
needs, while the other half would be provided  by the producers through a medium-term loan. 
D. SCIENTIFIC RESEARCH  
9. With a view to promoting cotton research, the cotton enterprises make a contribution to the 
Environmental and Agricultural Research Institute  (INERA) in order to finance the research 
programmes adopted by the AICB.  However, such  aspects as the restoration of soil fertility and 
environmental protection do not receive sufficient attention. 
10. It is for this reason that the AICB, aware of the threat to production in the long term, is 
seeking specific support for research that will enable it to meet these concerns.  The funding needs are 
estimated at €3 million. 
E. QUALITY IMPROVEMENT  
11. In the context of inter-occupational action grading is regarded as a common function. 
Accordingly, the AICB is seeking support for equipment, the modernization of grading halls, 
awareness-raising and training of producers in quality control (establishment of quality circles in rural 
areas).  The financial support required under this heading is €4.6 million. 
F. INPUTS FUND 
12. The charges involved in the current method of financing the purchase of inputs are fairly high 
and have the effect of raising the cost price of i nputs.  In addition, there are problems relating to the 
availability of financial resources for the purchase of inputs during certain crop years.  The 
establishment of a special inputs fund could be benefi cial and would help to reduce the cost price of  WT/CFMC/17   
 Page 3 
 
 
  inputs and consequently the price charged to producers.  This fund could be established at about 
€60 million. 
G. SUPPORT FUND 
13. By combining forward selling, payment in two instalments (discounting) and a support fund, 
Burkina Faso has been able to mana ge the price risk for several years.   However, the mechanisms that 
have been employed have shown their limitations in the current circumstances of a structural fall in 
world prices.  There is therefore obviously an  urgent need to reconstitute this fund. 
14. If the avowed objective of the use of subsidies in the countries of the North is the obligatory 
maintenance of the level of income of cott on producers, it becomes equally obligatory for 
compensatory measures to be taken so as to preven t a sudden fall in the income of African cotton 
producers. 
15. Measures need to be taken to seek outside assi stance through both bilateral and multilateral 
cooperation in order to clear the existing deficit a nd increase the creditworthin ess of cotton enterprises 
within the banking system.  The to tal amount requested is €54 million. 
H. PRICE SMOOTHING FUND 
16. The new philosophy of the cotton sector is to let the price smoothing fund take account of 
market fluctuations, which it seeks to mitigate by  maintaining (and guaranteeing), the payment of a 
basic purchase price for seed cotton, which will evolve on the basis of price trends.  Accordingly, by 
fixing each year the purchase price of seed cotton on the basis of price trends it should be possible to 
mitigate the shocks resulting from market fluctuations , which, in the current circumstances, represents 
progress in the search for solutions to the sector's fina ncial difficulties.  On the basis of the hypotheses 
and parameters used in the model of the price smoothing fund our partners  will be requested to 
contribute about €50 million to the fund by 1 April 2008. 
I. BASIC SOCIAL INFRASTRUCTURE  
17. In order to improve the standard of living of the cotton-producing communities and, therefore, 
increase their productivity, the AICB is seeking funds  in order to finance 800 wells and drilling 
operations, construct 30 schools with six classes each and ten health centres. 
(a) Wells and drilling operations:  800  at €12,000 each = €9.6 million. 
(b) Schools and health centres:  40 at €80,000 = €3.2 million. 
18. The funding for basic social infrastructure is estimated at €12.8 million. WT/CFMC/17   
Page 4  
 
  TABLE SUMMARIZING FUNDING REQUIREMENTS OF 
THE COTTON SECTOR IN BURKINA FASO 
 
 
No. ITEMS ESTIMATE 
(millions of Euros) 
INFRASTRUCTURE 5.7 
Silos 2.1 1. 
Warehouses and buildings for collective use 3.6 
2. AGRICULTURAL EQUIPMENT 7 
3. SCIENTIFIC RESEARCH 3 
4. QUALITY IMPROVEMENT 4.6 
5. INPUTS FUND 60 
6 SUPPORT FUND 54 
7. PRICE SMOOTHING FUND 50 
BASIC SOCIAL INFRASTRUCTURE 12.8 
Wells and drilling operations 9.6 8. 
Schools and health centres 3.2 
TOTAL FUNDS REQUESTED 197.1 
 
__________