WTO: 2015 NEWS ITEMS

DEVELOPMENT: COTTON DEVELOPMENT ASSISTANCE CONSULTATIONS


NOTE:
THIS NEWS STORY is designed to help the public understand developments in the WTO. While every effort has been made to ensure the contents are accurate, it does not prejudice member governments’ positions.

MORE:
> cotton, including the sub-committee
> Agriculture negotiations: www.wto.org/agnegs
> Development: www.wto.org/development

 

The most recent data on development assistance in the cotton sector shows that more countries are benefiting from foreign assistance, and this applies in particular to the Cotton-4. The gap between donors' commitments and their actual disbursement of development assistance in the cotton sector as well as in agriculture and infrastructure more generally has decreased (see WT/CFMC/6/Rev.18).

Ambassador Thiam Diallo of Mali, representing the Cotton-4 countries, said that the statistics show a positive development in cotton assistance. She noted that a session at the Aid-for-Trade Global Review on 2 July 2015 attended by the trade ministers of the Cotton-4 countries demonstrated the political importance of reducing trade costs in the cotton sector. Despite the increasing assistance, she noted that the cotton sector in Africa remains vulnerable to price volatility in international markets.

This meeting on cotton was the 23rd round in a series of consultations held regularly since 2004, known formally as the WTO “Director-General’s Consultative Framework Mechanism on Cotton”. The chairperson was Deputy Director-General David Shark, acting on behalf of Director-General Roberto Azevêdo.

 

Development assistance

Several development projects aimed specifically at the cotton sector or involving agricultural or infrastructure assistance more generally have been completed since the last meeting in November 2014, and donor spending has increased in relation to total donor commitments.

“I am pleased to report that the figures … show that progress has been made,” Director-General Roberto Azevêdo said in a cover note. "In particular, there has been an improvement in the ratio between commitments and disbursements”.

The number of countries benefiting from specific cotton projects increased to 30, up from 27 in the previous period. The total number of commitments remained static, at 34. The total value of commitments decreased, however, to US$ 247.1 million from US$ 327.5 in the previous period, mainly due to the completion or suspension of several projects. The ratio of total disbursements to total commitments reached 37%, compared with 30% previously.

In the area of agriculture and infrastructure-related development assistance, the total number of commitments decreased to 57, down from 60 previously. The total value of these commitments fell to US$ 4.78 billion but the disbursements increased by US$ 323 million to reach US$ 3 billion. The ratio of total disbursements to total commitments jumped to 63% from 55% previously.

The information on development assistance was provided by Australia, Brazil, the European Union and some of its member states, Japan, Switzerland and the United States as well as multilateral institutions such as the UN Food and Agriculture Organization, the International Monetary Fund, the International Trade Centre, the United Nations Conference on Trade and Development and the World Bank.

 

Development assistance for cotton and agriculture, US$ million

ACTIVE, ON-GOING

COMPLETED

Committed

Spent

Committed

Spent

Specifically for cotton

247

92

516

421

For agriculture and infrastructure, also benefiting cotton

4,781

3,009

2,273

2,236

Total

5,028

3,101

2,789

2,657

This information is available in WT/CFMC/6/Rev.18.

 

Market situation

The International Cotton Advisory Committee (ICAC) presented its latest assessment of the African cotton sector. Ms Rebecca Pandoph of ICAC noted that Africa contributes to around 10% of world cotton production, and the continent is the second-largest exporter of cotton after the United States, as most African cotton producers export nearly all their production. She stressed that low yields of cotton production in most parts of Africa remain a key issue and that exchange rate volatility has a substantial impact on African cotton exports.

Ms Pandolph provided a detailed analysis of cotton production within Africa. Egypt dominates production in the northern hemisphere although its exports have been decreasing. Zimbabwe and Tanzania are the main exporters in eastern and southern Africa, while Burkina Faso and Mali are the largest producers in western Africa. Since the CFA franc — the currencies used in western and central Africa — is tied to the euro, the depreciation of the euro has also affected the earnings of cotton farmers in the region.

More details can be found in ICAC’s presentation.

 

South-South cooperation and domestic reform

Brazil and China described their programmes to help African producers improve cotton production. Brazil announced that the Brazilian Cooperation Agency recently launched the second phase of its programme to develop the cotton industry in the Cotton-4 countries. China updated WTO members on its South-South cooperation programme to transfer cotton plantation technology, and to provide machinery and other input to cotton producers, particularly in the Cotton-4 countries.

Mali, Chad and Benin described the development of their domestic reforms in the cotton sector. For further information, see WT/CFMC/21/Rev.10.

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