Subsidies and Regulatory Reform in West African Cotton: What are the Development Stakes?

Available evidence strongly suggests that cotton producers in West Africa are relatively unresponsive to changes in world prices. This means they are poorly placed to take advantage of improved market conditions that might result from the reduction or abolition of cotton subsidies in rich countries. To increase price responsiveness and ensure that the results of multilateral reform match producers’ expectations it is now more urgent than ever to undertake comprehensive regulatory reform of cotton marketing structures. While most West African countries have already taken important steps in that direction, much work still remains to be done, in particular in Mali. The necessary path of reform is highly complex and country-specific. The paper suggests some goals, like assuring closer alignment between world and domestic (producer) prices; Improving cotton sector productivity by reinforcing market infrastructure at crucial points in the supply chain, and ensuring openness to technological advances including biotechnology; Investing in physical and informational infrastructure so as to bring farmers closer to markets.