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African cotton markets at crossroads : will the price spike turn into a new kick-start ?

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  • Delpeuch, Claire

Abstract

After years of diplomatic efforts and legal procedures to obtain the elimination of rich countries'cotton subsidies, policy prospects for African cotton producers remain bleak. However, the world price for cotton has doubled in a year and has hit an all-time high. This paper examines these developments and investigates their potential consequences for African smallholder farmers. It emphasizes the importance of price transmission to domestic markets; assesses the impact of the reforms undertaken in Sub-Saharan African cotton sectors on producers'supply responsiveness; and outlines what remains to be done to ensure that farmers can benefit from a favorable global environment. The paper concludes that improving the functioning of domestic markets remains the priority in the short run. The current high price season will reveal the costs and benefits of different types of sector regulation systems and the capacity of policy-makers and sector stakeholders to deliver on promises. It also offers a last-minute opportunity to rich countries to keep their word in the context of the Doha Development Round.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5847.

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Date of creation: 01 Oct 2011
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Handle: RePEc:wbk:wbrwps:5847

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Keywords: Markets and Market Access; Economic Theory&Research; Environmental Economics&Policies; Emerging Markets; Access to Markets;

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  1. Vandeplas, Anneleen & Delpeuch, Claire & Swinnen, Jo, 2011. "Revisiting the ‘cotton problem’: a comparative analysis of cotton reforms in Sub-Saharan Africa," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/320053, Katholieke Universiteit Leuven.
  2. Kaminski, Jonathan & Headey, Derek & Bernard, Tanguy, 2011. "The Burkinabè Cotton Story 1992-2007: Sustainable Success or Sub-Saharan Mirage?," World Development, Elsevier, vol. 39(8), pages 1460-1475, August.
  3. Kym Anderson & William A. Masters, 2009. "Distortions to Agricultural Incentives in Africa," World Bank Publications, The World Bank, number 2607, September.
  4. Catherine ARAUJO BONJEAN & Jean-Louis COMBES & Patrick PLANE, 2003. "Preserving vertical co-ordination in the West African cotton sector," Working Papers 200303, CERDI.
  5. Shepherd, Ben & Delpeuch, Claire, 2007. "Subsidies and regulatory reform in West African cotton: What are the development stakes?," MPRA Paper 2289, University Library of Munich, Germany.
  6. Irene Brambilla & Guido G. Porto, 2011. "Market structure, outgrower contracts, and farm output. Evidence from cotton reforms in Zambia," Oxford Economic Papers, Oxford University Press, vol. 63(4), pages 740-766, December.
  7. Minot, Nicholas & Daniels, Lisa, 2002. "Impact of global cotton markets on rural poverty in Benin," MTID discussion papers 48, International Food Policy Research Institute (IFPRI).
  8. Delpeuch, Claire & Leblois, Antoine, 2010. "Sub-Saharan African Cotton Policies in Retrospect," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 96174, African Association of Agricultural Economists (AAAE) & Agricultural Economics Association of South Africa (AEASA).
  9. Gillson, I & Poulton, Colin & Balcombe, Kelvin & Page, S, 2004. "Understanding the impact of Cotton Subsidies on developing countries," MPRA Paper 15373, University Library of Munich, Germany.
  10. Bates, Robert H. & Block, Steven A., 2009. "Political Economy of Agricultural Trade Interventions in Africa," Agricultural Distortions Working Paper 50302, World Bank.
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