WORLD TRADE  
ORGANIZATION   
WT/CFMC/30/Rev.2 
22 June 2012  
 
(12-3341) 
 Original:   English 
  
DIRECTOR-GENERAL'S CONSULTATIVE FRAMEWORK 
MECHANISM ON COTTON 
 
Domestic Cotton Sector and Other Reforms 
 
Communication from the International Cotton Advisory Committee  (ICAC)  
 
Revision 
  
 
 
 
    The following communication, dated 19 June 2012,  is being circulated at the request of the 
Secretariat of the International Cotton Advisory  Committee (ICAC) in partnership with the C4 
proponents under item 4 "Domestic Cotton Sector and Other Reforms" on the agenda of the Director-
General's Consultative Fram ework Mechanism on Cotton. 
 
_______________ 
 
 
DOMESTIC COTTON SECTOR REFORMS  
IN THE C4 COUNTRIES 
 
Information Provided by the ICAC Secretariat
1 
 
 
1. Cotton production in the C4 countries (Benin, Burkina Faso, Chad and Mali) rose from 
101,000 tons of lint in 1980/81 (August 1980 to July 1981)  to a record of 759,000 tons in 2004/05, but 
fell to 326,000 tons in 2010/11.  C4 production is  estimated at 445,000 tons in 2011/12, the current 
cotton season.  Exports followed the same trend,  rising from 97,000 tons to nearly 750,000 tons 
between 1980/81 and 2005/06, and then dropping in  recent years.  Exports are projected at 
370,000 tons in 2011/12.  Textile mill use of cott on in the four countries is stagnant, below 
15,000 tons.  From 2004/05 to 2010/11, harvested area in the C4 fell by 46%, yields declined by 21%, and production dropped by 57%.  As a result, the C4 share of world cotton production fell from 2.8% to 1.3%, and their share in world exports from 8% to 4%.  
                                                      
1 The ICAC Secretariat has prepared this paper.  Th e views expressed are those of the ICAC Secretariat 
alone, and responsibility for any errors or omissi ons lies entirely with th e ICAC Secretariat.  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/CFMC/30/Rev.2 
Page 2  
 
  2. Yields in the C4 averaged about 400 kilogram s of lint per hectare from the early 1990s to 
2005/06. However, the C4 yield has since dropped, and the average in 2010/11 sank to 341 kilograms/hectare.  As a result, the gap betw een the average yield in the C4 countries and the 
world average has increased.  The C4  yield represented three-fourths of  the world average in the early 
1990s but equals just 45% of the world average in 2010/11.  Cotton researchers in the C4 report that 
yields are well below the potential of existing varie ties with current production practices, estimated to 
be 850 kilograms of lint per hectare, or two tons of seed cotton per hectare. 
3. The pace and depth of the reforms in the C4 co tton sectors vary from one country to another. 
Others factors, especially international cotton prices, have also had significant impacts on production. Three of the C4 countries (Benin, Burkina Faso and Mali) share the same economic and monetary 
union (WAEMU).  This regional organization is e ngaged in a common strategic plan to boost the 
competitiveness of cotton, the WAEMU Cotton Textile Strategy
2. 
I. COTTON PROGRAM REFORMS IN THE C4 COUNTRIES 
A. AN OVERVIEW OF THE SINGLE CHANNEL SYSTEM IN THE C4 BEFORE THE CURRENT REFORMS  
4. Prior to reform, the cotton sector was vertically in tegrated in each of the C4 countries, with a 
national cotton company promoting production, provid ing agricultural advice and inputs to growers, 
purchasing all seed cotton at fixed and guaranteed prices each season, transporting and ginning seed 
cotton, and marketing lint and seed.  All cotton pr oducers belonged to farmer organizations at the 
village level.  The farmer organi zations were responsible for input distribution to individual farmers 
and for seed cotton collection in villages.  Their um brella organizations at the regional and national 
levels played significant roles in policy form ation within the cotton sectors.  A guaranteed 
procurement price for seed cotton was announced in  each country prior to planting, based on the 
expected world cotton price.  The guaranteed pr ice was applied across the entire country (pan-
territorial) for the whole season (pan-seasonal).  A t op-up payment (“ristourne”) was paid at the end 
of each marketing season if the average market price was higher than the procurement price3. 
5. Several of the C4 countries began to reorga nize their cotton sectors in the mid-1990s and 
adopted policies to encourage privatization within  the framework of IMF/World Bank Structural 
Adjustment Programs.  Attempts were made to strengthen producer's organizations to be more 
actively involved in critical decisi ons affecting the sector.  Reforms were supposed to transfer supply 
chain management functions from government s to cotton companies and producer groups4.  
6. Under the reform programs, the C4 countries ha ve each developed their model to overcome 
the different crises in their respective sectors a nd to be competitive in the world fiber economy.  
B. COTTON REFORMS IN BURKINA FASO 
7. Cotton accounts for 60% of Burkina Faso export earnings and 20% of GDP5.  Prior to reform 
in 2004, the sector operated under a single-channel system, with a parastatal company, SOFITEX, retaining a monopoly on the collection, processing, and marketing of seed cotton, lint and cottonseed. 
In many regions, SOFITEX was the sole provider of  inputs and extension services.  In 2004, the 
sector abandoned its single-channel system and move d to a local monopoly system.  Two new private 
                                                      
2 The WAEMU Cotton Textile Sector Agenda is focuse d on the goal of the processing one-quarter of 
WAEMU annual cotton fiber production by 2020. 
3 Levrat Regine, "Le coton dans la zone franc depuis  1950 : Un succès remis en cause", Paris, 
Ed. Harmattan, 2009, pp. 105-123. 
4 Levrat Regine, Ibid, p. 159. 
5  Bulletin of African Cotton Companies, February 2012, p. 3.  WT/CFMC/30/Rev.2 
 Page 3 
 
 
  cotton companies were granted exclusive geographi c zones, and SOFITEX withdrew from those two 
zones.  Responsibility for coordination of the sect or passed to an Inter-professional Association 
comprised of the national farmer s' and ginners' associations. 
1. The Burkina Faso Reform Process 
8. The cotton sector reforms in Burkina Faso were aimed at strengthening producers' 
organizations and liberalizing the sector while main taining the benefits of an integrated sector. 
 
(a) SOFITEX started the creation of New Villa ge Cotton Producers' Associations (GPCs 
for its acronym in French) in 1996 to repl ace the former village groups that had 
become insolvent in 1992.  
(b) Unions of GPCs at the district and provinc ial levels were created in 1997, and the 
National Union of Cotton Producers of Burkina (UNPCB), representing all local producers' unions at the national level, was created in 1998.  
(c) The government sold 30% of SOFITEX's  capital in 1998 to UNPCB on credit 
(thereby reducing its shareholding to 35% ), and transferred responsibility for the 
cotton sector co-ordination/management to  the stakeholders through an Inter-
professional Agreement between UNPCB and SOFITEX and the creation of a cotton sector management committee. 
(d) The final step of the liberalization process was the sale of some assets of SOFITEX 
by the government to private investors, selected through a competitive bidding process. The new companies, FASO COTON (the Agha Khan and Paul Reinhart 
Group) and SOCOMA (GEOCOTON Group), began operations in 2004 under eight-
year contracts that afforded them excl usive rights to purchase seedcotton in the 
Central and Eastern sections of Burkina Faso's cotton production belt, respectively. 
These belts accounted for 15% of total Burkina Faso cotton production. UNPCB 
owns 10% of the shares in FASO COTO N and 13% of the shares in SOCOMA.  
(e) Accordingly, three cotton companies curren tly share control over cotton production in 
Burkina Faso: 
 
(i) SOFITEX (Textile Fibres Company of Burkina) in the West, with 20 
provinces; 
(ii) SOCOMA (Gourma Cotton Company) in the East, with 6 provinces; 
(iii) FASO COTON in the central region of the country, with 12 provinces. 
Together, the three companies own 18 gi nning factories with a daily cumulative 
production capacity of about 6,500 tons of seed cotton, and they own two cotton 
planting seed production and processing factories.  
 
2. Current Organization of the Burkina Faso Cotton Sector 
9. In order to defend their common interests a nd harness their efforts, the three companies 
created the Professional Association of Burkina Co tton Companies (APROCOB) in 2006.  Similarly, 
in order to enhance their farming activities, cotton farmers gathered themselves within the National WT/CFMC/30/Rev.2 
Page 4  
 
  Union of Burkina Cotton Farmers (UNPCB).  Toda y, the Inter-Professional Cotton Association of 
Burkina (AICB) manages Burkina Faso's cotton sector.  AICB is a confederation of APROCOB and 
UNPCB.  Cotton producers hold capital shares in each of the three companies (SOFITEX, SOCOMA and FASO COTON), and participat e as shareholders on the Board of Directors of AICB, thereby 
having a better understanding of the difficulties faced by the cotton sector. 
10. Cotton production in Burkina Faso rose to a record of 300,000 tons of lint in 2005/06. 
However, world market conditions led to a shar p reduction in the producer price in the years 
following, and production fell to  150,000 tons by 2007/08.  This resulted in losses for the cotton 
companies, and the government  had to recapitalize SOFITEX.
 
11. Burkina Faso officially approved the commercial use of biotech cotton beginning in 2009/10. 
Bt varieties (varieties resistance to bollworms) we re planted on 59% of the total cotton area in 
2011/12.  However, a severe drought limited production during 2010/11 to 141,000 tons, and rainfall 
continued to be below average in 2011/12.  Total seed cotton production in Burkina Faso in 2011/12 
was 414,500 tons, an increase of 9%6;  lint production is estimated at 151,000 tons. 
12. The reorganization of the sector included the cr eation of an innovative price risk management  
mechanism through the creation of a cotton  lint price stabilization fund (Fonds de  Lissage).  Under 
this mechanism, the procurement price for seed co tton each season is based on a five-year centered 
moving average of the Cotlook A Index, which serves as an indicator of average international cotton 
prices.  When prices in any season are above the moving average price, revenue from each of the 
three cotton companies is retained by the Fund;  when prices in any season are below the average 
price, money will be paid from the Fund to the thre e cotton companies to enable them to maintain the 
announced procurement price for seed cotton.  The Fund currently has a significant surplus reflecting 
the high prices received in recent seasons.  
13. The government of Burkina Faso plans to sell its majority share in SOFITEX to private 
investors, redraw the borders of the three producti on areas, and sell some ginneries in order to reduce 
the size imbalances between SOFITEX, SOCOMA and FASO COTON. 
14. The Interprofessional Cotton Association of  Burkina (AICB), with the effective 
disengagement of the state, has become the essentia l and key organ in chain management.  Its main 
tasks include the management of the Interprofessiona l Agreement to ensure its enforcement, including 
the setting of the purchase price and quality standard s for seed cotton, determining conditions for the 
transfer of agricultural inputs to farmers; and overseeing common management functions including 
research, the issue of inputs, the classification of fiber and slope maintenance production areas7.   The 
government of Burkina Faso oversees the functioning of the sector through the Permanent Secretariat 
of the Monitoring of the Liberalized Cotton Prod uction Stream (SP-SFCL) under the Ministry of 
Industry, Commerce and Handicrafts.  Cotton grow ers, who have administrative roles in the 
companies, hold shares in each: 30.14% of SOFI TEX, 13% of SOCOMA, and 12.62% of FASO 
COTON. 
3.  The Current Situation and Prospects for the Burkina Faso Cotton Sector in 2012/2013 
15. Domestic mill use of cotton in Burkina Faso is only 3,500 tons per year, most of which is 
accounted for by a single company named FILSAH.  Ninety-five per cent of production is exported to Asia, 2.7% to Europe, 0.5% to the USA and 1.8 % to Africa.  China alone represents about 60% of 
Burkinabe cotton exports.  The ICAC Secretariat estimates 2012/13 production at 172,000 tons.  
                                                      
6 Presentation made at the 5th PR-PICA Meeting, held in Côte d'Ivoire, April 2012. 
7 AICB, Presentation of the cotton sector in Burkina Faso, 2012.  WT/CFMC/30/Rev.2 
 Page 5 
 
 
  16. The ICAC Secretariat observes that industry refo rms have been more successful in Burkina 
Faso than in other countries, although there is no empi rical evidence that private ownership of gins is 
resulting in improved efficiencies of operation.  The greater success of the privatization effort in Burkina Faso is due to a combination of good g overnance and the unique geographic situation in 
Burkina Faso with three distinct production zones th at leads naturally to a trisected system of input 
supply and seed cotton procurement.  
17. The stabilization of the institutional landscape,  stakeholder accountability in governance  of 
the sector, the use of better technology  and the adoption of efficient practices are keys to the success 
of Burkina  Faso cotton .  
18. However, the consensual framework for cons ultation was severely disturbed in 2011 by 
farmers who demanded higher prices and reduced i nputs costs.  During March 2011, international 
cotton prices reached an extraordinary peak of n early US$2.20 per pound, which farmers in many 
countries interpreted as average pric es that they wanted to be passed directly to them without 
adjustment for transportation or ginning expenses.   Even though the actual procurement price of 
274 CFA per kilogram was approximately one-third hi gher than in previous years, many farmers were 
disappointed.  The resulting protests caused extensiv e destruction of property and a change in the 
management of SOFITEX. 
C. C
OTTON REFORMS IN BENIN  
19. Cotton is the leading cash crop in Benin.  It accounts for about 80% of the country's export 
earnings and 12% of GDP8.  Cotton farming is the occupational activity for 150,000 households 
planting an average of between 2.5 hectares in  the South and 5 hectares in the North.  
20. There are 18 ginning factories in Benin, with a total capacity of about 600,000 tons of seed 
cotton per year.  After peaking at 171,000 tons of cotton lint in 2004/05, production dropped well 
below 100,000 tons in recent years.  Produc tion in 2011/12 is estimated at 77,000 tons. 
21. The World Bank has overseen Benin's efforts to  implement liberalization policies since 1992. 
1. The Reform Process in Benin 
22. Prior to the reforms, Société Nationale Pour  La Promotion Agricole (SONAPRA) held a 
monopoly on the purchase of seed cotton, the sale of lint and the delivery of cotton inputs to farmers on credit.  Within the framework of the structur al adjustment program, the government of Benin 
withdrew from cotton production in 1991 and began to liberalize the sector.  Most of the reforms were 
implemented between 1993 and 2000: 
(a) Input supply functions were progressively transferred to the private sector, and 
SONAPRA withdrew from this activity in 2000. 
(b) Eight private ginners were licensed between 1995 and 1998 (resulting in ginning 
overcapacity), and each gin was allocated a quota of seed cotton by SONAPRA until 
2000. 
(c) The monopoly of SONAPRA on seed cotton marketing was abolished in 2000. 
                                                      
8 Presentation made by Burkina Faso delegation at the 5th PR PICA annual meeting, April 2012, Côte 
d'Ivoire. WT/CFMC/30/Rev.2 
Page 6  
 
  (d) National professional associations  of ginners and input im porters/distributors were 
created. 
(e) After the Sovereign National Conference of 1990, which advocated the State's 
disengagement from all economic activiti es, the Revolutionary Cooperative 
Associations (GRVCs), which had been  enhanced during the mid-1980s, were 
restructured into district, provincial and national umbrella bodies respectively, known 
as USPP, UDP and FUPRO. A recent reform  introduced in 2010 replaced the GVPC 
with Village Cotton Farmers' Cooperatives (CVPC),  with official approval to set up 
their umbrella bodies at the communal,  departmental a nd national levels. 
(f) Inter-professional bodies were created to manage the sector: 
(i) An inter-professional association (AIC), was put in charge of managing the 
critical functions of the supply chain operation and coordinating the various 
professional segments;  and 
(ii) A clearinghouse (CSPR) was created for securing repayments of all input 
credits. 
23. The creation of the Cotton Inter-Professional Association (AIC) on 19 October 2000, was 
intended to facilitate a smooth transition from state- dominated management of the cotton segment to 
full privatization.  AIC is made up of three professional groups: the National Council of Cotton 
Ginners (CNEC), the National Counc il of Importers and Distributors of Cotton Inputs (CNIDIC), and 
the National Consultative Committee of Cotton Farmers (CCNPC). 
24. Reforms entailed the privatization of input supp ly, the introduction of private ginners and the 
creation of inter-professional bodies to take over mana gement of the sector through a highly regulated 
system precluding competition among ginners.  Under the reformed cotton sector, the inter-profession 
bodies allocate seed cotton to each ginner in proportion to their ginning capacity, while prices of seed 
cotton remain fixed and uniform throughout the country.  The reform policy was updated in 2001, 
2008 and 2010 with the objective of developing a pr ivate but nationally integrated cotton supply 
chain, and transferring its management from the government to the inter-professional body. 
25. The complexity of the regulatory mechanisms to distribute inputs to farmers and collect seed 
cotton according to allocations made them difficult to  enforce.  Payments for seed cotton to farmers 
have become irregular, resulting in a steep drop in production.  
26. With the privatization at the end of 2008 of  the main cotton company, SONAPRA, the sector 
has moved towards a concentrated type, dominated by one private operator controlling all ginneries 
except one, input supply, transit, and a significant sh are of the cottonseed oil and the textile industry. 
2. Regulation of the Cotton Sector and Suspension of the Framework Agreement
 
27. As of June 2012, the Benin cotton sector is again in turmoil.  The implementation of the 
reforms did not yield the expected results, and pr oduction decreased substantially during 2006-20109. 
However, in a press release dated 29 April 2012, the Council of Ministers of Benin announced the 
creation of a national monitoring  and controlling authority/organ over the cotton sector, with the 
reestablishment of the former public society, S ONAPRA, to replace management structures created 
through agreements between the government and th e Interprofessional Cotton Association.  This 
decision was prompted by the report of the Inte rnational Commission of Inquiry set up by the 
                                                      
9 Presentation made by Benin delegation at the 5th PR-PICA Meeting held in Côte d'Ivoire, April 2012.  WT/CFMC/30/Rev.2 
 Page 7 
 
 
  government on 10 April 2012 to assess the 2011/12 cotton campaign.  This report emphasized the 
numerous dysfunctions of the structures respons ible for the management of the sector, the 
Interprofessional Cotton Association (AIC) and th e Central Security Payments System (CPSS).  
28. The organization of Benin's cotton sector has con tinuously been marked by conflicts between 
public and private partners, and the recent de velopments are part of this tradition.   Thus, the prospects 
for revival of the cotton sector in Benin are uncertain .  Instead of AIC, it is now an Interim Committee 
that will steer the cotton sector during 2012/13.  A ccording to estimates provided by the ICA for 
2012/13, there appears to be renewed growth in cotton production, but there are divergent views on 
this outlook. 
29. The ICAC Secretariat observes that the refo rms have not resulted in improved industry 
performance, improved efficiency, increased productio n or reduced operating costs within the ginning 
and transportation sectors.  The privatization pro cess resulted in the initial disorganization of the 
cotton sector followed by reorganization under near ly monopoly conditions in which one firm owns 
approximately 90% of national ginning capacity.  
D. COTTON SECTOR REFORM IN MALI 
30. The cotton sector of Mali showed the best gr owth performance in West Africa during the 
decade following the devaluation of the CFA Fr anc in January 1994.  Production rose from 
169,000 tons in 1995/96 to a record of 260,000 tons in 2003/04.  Production steadily dropped after 2003/04 as cotton prices measured in CFA declined , and the financial difficulties of Compagnie 
Malienne pour le Développement des Textiles (CMD T) caused several consecutive years in which 
farmers were not paid on time.  Cotton productio n reached a 20-year low of 85,000 tons in 2008/09, 
despite an attractive producer price that season of 200 CFA/kg.  
31. As international cotton prices began to r ecover in 2009/10, CMDT began reducing the 
backlog of payments to farmers from previous seas ons, and the Government of Mali also decided to 
subsidize fertilizer.  Thus, some producers who had  turned away from cotton returned to the crop. 
Cotton production rose to 99,000 tons in 2009/10 and 103,000 tons in 2010/11.  With the higher 
producer price announced for the current season, prod uction in 2011/12 is estimated at 185,000 tons. 
1. The Malian Reform Process and Proposed Regulation of the Sector 
32. Reforms in the cotton sector have been impl emented since 1998/99 to address the disastrous 
financial situation of the national cotton comp any, CMDT, and to prepare for the planned 
privatization. The reforms have been focused on several objectives: 
(a) Capacity building for village-level and regional farmer organizations; 
(b) Restructuring of CMDT and refocusing its activities on cotton operations; 
(c) Revising the producer price mechanism and creating a price support fund belonging 
to producers; 
(d) Creating an Inter-professional Body (IPC) and a Central Classing Office (OCC);  and 
(e) Recapitalizing CMDT and dividing it into  four fully privately owned regional 
subsidiaries (West, Center, North-East and South). 
 WT/CFMC/30/Rev.2 
Page 8  
 
  33. The cotton sector reform process seemed to ha ve entered a decisive phase before the current 
political crisis.   CMDT first of all  "branched out" in Se ptember 2009 with the  creation of four 
subsidiaries and a CDMT  holding company.  A social plan th at provided for severance payments and 
retirement benefits to be paid to surplus employees was signed  and entirely financed by the State.   
The Government of Mali also cleared most of the debts of the cotton cooperatives in preparation for 
privatization. 
34. After one unsuccessful round of bids, the subs idiary of CMDT for cottonseed crushing, 
Huicoma, was sold to the government and then in  2005, the company was sold to a local group of 
investors.  The investors had no experience in th e cottonseed industry, and Huicoma has accumulated 
considerable debts owed to CMDT (which Huicoma disputes), and the cottonseed oil mills in Koutiala 
and Koulikoro have stopped operating.  
35. The invitation to tender for the privatization  of the subsidiaries of CMDT through spinoffs of 
majority  blocks of shares by the holding company was published  on 22 February 2010.  
Six companies were pre-qualified to partic ipate in the bidding in May 2010.  From  an analysis of 
technical and financial packages,  the first provisional selections were  made.  Private investors would 
hold 61% of the  corporate capital.  Agricultural producers and  the company's paid staff would join 
together  to hold capital shares of 20% and 2%, respectively.   The State would keep the remaining 
17%.  The private companies will have a regiona l monopoly to buy, gin and sell cotton in their 
exclusive areas, as is th e case in Burkina Faso.  
36. The restructuring of producer associations has been completed  with the creation  of the Union 
Nationale des Sociétés  Coopératives des Producteurs de Coton du Mali, which federates the different 
regional,  sectorial and district levels, bringing together  the 7,000 cotton producers' cooperative 
associations.   
37. The Interassociation Professionnelle du Coton (IPC) was created on 3 February 2009.  IPC 
brings together  the UNSCPC and the Association Professionnelle  des Sociétés Cotonnières du Mali  
(APROSCOM), but the ICAC Secretariat observes that IPC seems to remain dysfunctional.   
IPC is 
supposed to ensure that the different  professional groups involved in the cotton sector will  jointly 
manage critical functions and discuss common  issues, such as developing an information system on 
the performance of each subsidiary,  campaign plans, producer price determination  mechanism, inputs 
supply,  assistance management, agricultural research,  seeds, rural roads, etc.   The creation  of a cotton 
classification office (100% of its shares are held by CDMT) completes the institutional developments.  
38. The creation of a sector regulation board (ARSC) was also being examined  (the bill was 
adopted during the cabinet meeting  of 9 February 2011 and tabled for scrutiny  before the National 
Assembly).  
39. Finally, a cotton development strategic framewo rk and a cotton assistance policy letter were 
adopted in 2010, thereby confirming the political will of the State of Mali to continue to be involved 
in regulating the sector.  Their targets include increasing the productivity, competitiveness and 
sustainability of the sector, improving manage ment in the sector through consultations and 
establishing protective measures against global price fl uctuations.  However, an attempt to privatize 
the western area of CMDT failed because the only bid was considered too low.  
2. What Next? 
40. In Mali, the implementation of the institutional reforms of the cotton sector, as expected by 
financial partners of the country, has been  thrown into disarray by the recent coup.   WT/CFMC/30/Rev.2 
 Page 9 
 
 
  E. COTTON SECTOR REFORM IN CHAD 
41. Even though the primary sector in Chad has b een dominated by crude oil exports since 2003 
(64.6% of the primary sector added value), agricultu re and cotton remain important to the economy of 
the country.  In cotton growing areas (cotton production is located in the south of the country), 80% of 
the farmers grow cotton on small rain fed farms, with an average land area of 1 to 2 hectares .  Despite 
its isolation, Chad was the leading cotton producer  in the African Franc Zone until the end of the 
1970's.  In 1985, cotton accounted for 80% of Chad 's exports and 25% of government revenue.  In 
1997, it still accounted for 65% of merchandise exports10. 
42. From that period onwards, Chad has seen its  production dwindle dramatically, especially 
during the 2000s.  Indeed, the financial situati on of COTONTCHAD was catastrophic.  The company 
has been substantially damaged by the lack of i nvestment and maintenance.   Due to low prices, 
production collapsed from a record of 103,000 tons of lint in 1997/98 to 14,000 tons in 2009/10, the lowest in more than 50 years.  In 2009/10, in spite  of an attractive producer price of 180  CFA/kg of 
seed cotton, production fell because of the lack of interest  of producers suffering from delays in  
payments
11.  Production in 2010/11 was 22,000 tons, a nd production in 2011/12 is estimated at 
32,000 tons. 
43. In December 1999, the Government of Chad adopted a cotton sector reform program under 
prodding from The World Bank, with the objective of improving the incomes of cotton farmers and enhancing their efficiency in cotton production, th rough the liberalization of the sector, including the 
privatization of the parastatal COTONTCHAD, a nd the promotion of the development of strong 
cotton producer organizations . 
44. Learning from the difficulties in the implementation of other cotton reform programs, Chad 
has decided to pay particular attention to consen sus building among all stakeholders along the reform 
path.  In particular, the selection of a divestiture  scenario for the ginning activities of COTONTCHAD 
would take into account the view of the farmers' organizations.  
1. The Chadian Reform Program: Reform  Undermined by Uncertainty over 
Implementation  
45. The reform policy has been endorsed after a very long process.  It led in 1997 to the setting up 
of the “Observatoire du Coton”, a technical s upport unit helping the Reflection and Monitoring 
Committee on Cotton.  In 1999, th e committee became the Technical Committee in Charge of the 
Cotton Reform.  The strategy for the withdrawal of the government was authorized by order N° 541 
on 19 December 1999.  This order officially mark s the beginning of the privatization process with a 
plan of reform that focuses on two areas: 
(a) The government's withdrawal from both the capital and the administration of the 
cotton company (COTONTCHAD) and the libera lization of the cotton industry;  and 
(b) The implementation of accompanying measu res for cotton farmers in order to 
strengthen the capacity of cotton farmers' or ganizations so that the organizations can 
play a more important role in the functioning of the cotton industry. 
                                                      
10 "Cotton sector reform in Chad: on move or stuck",  K. Djondang, M. Fok, B. Wampfler and 
N. Tordina, ISSCRI International Co nference "Rationales and evolutions of cotton policies", Montpellier, 13-
17 May 2008 . 
11 www.lesafriques.com/index  "Mahamat Adoun Ismael, Manager General Director of CotonTchad". WT/CFMC/30/Rev.2 
Page 10  
 
  46. Although the government agreed to withdraw from the cotton sector, its control over the 
sector is still very strong.  The debate about launchi ng a privatization process has been delayed by the 
difference in profitability between different areas or industries.  Finally, an agreement on the 
privatization of the ginneries as a single package h as been achieved.  The Government of Chad has 
moved slowly, hesitating between two scenarios: a share sale or an asset sale.  But the slow 
implementation of the plan has contri buted to the decline in the sector. 
2. Will the creation of COTONTCHAD SN help  re-launch the production of cotton in 
Chad? 
47. A decision regarding the restructuring of COT ONTCHAD was adopted in January 2012.  In 
order to re-launch cotton production, Chadian authori ties decided to pay off the debts of the national 
company.  At the end of December 2011, the Bo ard Direction, during an extraordinary assembly, 
decided on a strategic plan that includes the creation of a new company Coton Tchad Société 
Nouvelle (COTONTCHAD SN).  The government's share in the new company is 51%.  Eventually it 
will be reduced to 33%.  The objective is to reassu re private investors in order to re-launch the 
privatization process of COTONTCHAD SN.  Since 25 January 2012, all the commitments made by 
COTONTCHAD were transferred to COTONTCHAD SN. 
48. With the creation of COTONTCHAD SN, cotton production may revive.  The 
COTONTCHAD SN scheme projects a  progressive resurgence of producer organizations  in the 
management of the sector with the objective of raising production to 300, 000 tons of seed cotton 
(120,000 tons of lint) in 2016.  
3. Reforms Hindered by Hesitation 
49. Uncertainty over the pace and path of reform in  Chad led to financial disaster for the cotton 
company and declining production.  Because of resi stance to the reform policies advocated by The 
World Bank and a lack of consensus on how to move forward, the cotton sector was left without clear direction, and COTONTCHAD was denied the resour ces necessary to maintain the sector.  With the 
creation of COTONTCHAD SN, it is hoped that  a revival of the industry will ensue. 
II. CONCLUSION 
50. The Governments of the C4 countries have been implementing sectoral reforms since the 
early 1990s, often with the support of The Worl d Bank and other developm ent institutions.  The 
reform programs generally entail redefining the role  of the state and facilitating greater involvement 
of the private sector and farmer organizations , with the ultimate objective of strengthening the 
competitiveness of cotton production, processing, a nd exports in an increasingly demanding world 
market.  The pace and trajectory of cotton reform programs have varied widely from country to 
country, and the impact of reforms on secto r performance has been, at best, mixed. 
51. In Mali and Chad, the greater role of the st ate has made reforms more difficult, from both 
political and practical perspectives.  Only Benin (in 1995) and Burkina Faso (in 2004) have permitted 
private investors to control cotton companies, w ithout, however, allowing them to compete.  Each 
cotton company has its exclusive zone in Burkina Faso, and seed cotton is allocated administratively 
to cotton companies in Benin.  The outcome of refo rm in Benin clearly fell short of expectations and 
resulted in a sharp decline of the sector's performance.  
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