Description:
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.