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Commodities > Cotton Cotton
News Compromise deal on cotton subsidies in preparation - February 2004 The trade ministers of five of West Africa's largest cotton producing countries met in Burkina Faso to discuss a new approach to tackling the problem of US, European and Chinese cotton subsidies at world trade talks. Burkina Faso, Mali, Chad, Benin and Senegal have protested for years that these subsidies, amounting to US$4 billion a year, undermine the meagre earnings of 12 million poor people in the Sahel who depend on cotton as their main source of cash income. The issue came to a head at a meeting of the World Trade Organisation (WTO) in Cancun, Mexico last September 2003, which hit deadlock over cotton. But Western producers now appear to be adopting a more flexible approach and the Africans are preparing their response. “The debate on cotton has evolved since Cancun and recent initiatives by the EU and the US appear encouraging – at Cancun the sort of talk we were hearing from western countries was totally different,” Shogel Maiga, Mali’s Minister for Trade and Industry has saidtold on the sidelines of the meeting in Ouagadougou. The United States recently wrote an open letter to the West African cotton producers acknowledging that their fight for fair trade was well founded, while the EU has announced a review of it’s agricultural policy with a view to sharply cutting cotton production and export subsidies. These developments have raised hopes among the African nations that a solution could yet be found. Ivorian war cuts Mali's cotton profits - January 2003 Mali's cotton industry has dramatically slashed its profit forecast for 2003 because of increased transport costs caused by the civil war in neighbouring Ivory Coast. The conflict in West Africa has, at times, shut down the main ports in Ivory Coast, affecting not only Mali but most other neighbouring countries. Mali's state-owned cotton company CMDT cut its forecast by 67% from 4.62bn CFA francs (£4.6m; $7.3m), which was based on exporting through Ivory Coast's main port of Abidjan. "Now, as the chances of this happening are dwindling and as we go to Lome (Togo), Tema (Ghana) and Dakar (Senegal) to export, expected profit has been reduced to 1.52bn (CFA francs)," a company official told Reuters. The three-month-old conflict has effectively partitioned Ivory Coast into government and rebel-held areas. The country was the economic hub of the region with an annual gross domestic product (GDP) of more than $10bn before the fighting began. When fighting erupted, Mali's borders with Ivory Coast were sealed, forcing the largest cotton producer in sub-Saharan Africa to find other trade routes. Mali is one of the poorest countries in the world and its economy ministry has already put tax losses due to the war at 11.4bn CFA francs. The overall cost to the economy in the first quarter of 2003 is forecast at 100bn CFA francs. Cotton is Mali's second biggest export earner behind gold. |
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