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African cotton farmers hope for trade breakthrough

While besuited government officials slug it out at world trade talks in Geneva this week, African peasant farmers watching their cotton plants grow hope any deal will allow them to farm their way out of poverty.

Posted: Thursday, July 24, 2008, 7:23 (BST)
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HIGH HOPES

"We are hoping these negotiations will eliminate subsidies completely and immediately," said Seydou Coulibaly, who grows around 7 tonnes of cotton a year on his 6-hectare farm in Ouelebougou, southern Mali.

Coulibaly should be a prime beneficiary of the current "Development Round" of WTO talks, launched in Doha in 2001.

But a successful conclusion to this week's crunch talks in Geneva is far from certain. And even if a deal is struck, the effects may not be immediate, or enough to transform the lives of an estimated 10 million West Africans who depend on cotton.

Some economists have estimated the U.S. subsidies depressed world cotton prices by up to 15 percent in recent years.

But since hitting a 2007 low of just under 46 U.S. cents per lb in May that year, U.S. cotton futures market prices almost doubled to more than 90 cents/lb in March this year, helped in part by falling U.S. output which Washington says has dropped by 38.5 percent in the past two years.

Prices have eased back since March, and futures closed in New York on Tuesday at 68.76 cents/lb.

African cotton farmers say that despite the price rise, which is passed on to farmers in most West African countries through a centrally-fixed producer price that takes account of ginning and transport costs, they struggle to make ends meet.

"For cotton to be profitable today, we need a producer price of 250 CFA francs per kg. For years it was around 160 CFA, but this year the government has set it at 200 CFA/kg," said Coulibaly in Mali.

He said the price of fertiliser - a major cost for farmers growing cotton, which bleeds the soil of vital nutrients - had doubled in the past year, partially offsetting the better price.

"An increase in the price of cotton will improve farmers' standard of living, but price is only one aspect of development," said Mohamed Lamine Ndiaye, an African programme manager for aid group Oxfam in Senegal.

"We need to develop added value ... Only 3 percent of West African cotton is processed here. We need to develop a strong cotton industry, but to do that we need to have a good (price) environment," he said.



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