Fairer trade key to beating African poverty - IMF

WEREKELA, Mali, Nov 8 (Reuters) Fairer access to global markets for African farmers is key to reducing poverty on the world's poorest continent, the deputy head of the International Monetary Fund said today.

John Lipsky, on his first trip to sub-Saharan Africa since taking over as the IMF's first deputy managing director in September, told cotton farmers in Mali he wanted to help promote more open markets for their products.

''At a time in which developed countries are active in so many avenues to try to encourage poverty reduction in places like Africa, it is the liberalisation of agricultural trade that holds out great promise,'' he said.

Cotton is a staple crop for West African countries, including Mali, where farmers and governments have long complained they cannot compete with a subsidised industry in the United States, the world's top exporter.

More than 20 million African farmers, mostly in Mali, Chad, Burkina Faso and Benin, have been hurt by U S cotton subsidies which totalled more than 4 billion dollars in 2004/05 for 25,000 American producers.

Developed nations' subsidies push down world cotton prices, threatening precarious livelihoods in an already impoverished region, African growers say.

''Subsidies to otherwise uneconomic production damages the prospects of a place like Mali, for which agricultural trade is one of the most promising avenues for poverty reduction and employment growth,'' Lipsky said after visiting the cotton producing Kouli-Koro region of southern Mali.

In the sun-baked village of Werekela, a settlement of mud-brick buildings and red dust streets, farmers and locals complained U.S.

subsidies were hammering down prices for cotton, known locally as ''white gold''.

''The fall in cotton prices is at the origin of all the village's economic difficulties,'' said Philippe Traore, 47, head of the local cotton producers' co-operative. ''My only source of revenue is cotton.'' DOHA TALKS Some trade officials say a push by African nations to reform U S and European cotton subsidies will succeed only if the stalled Doha round of world trade talks are revived and produce a deal.

The negotiations stalled in July amid disagreement over subsidies and tariffs for farm goods.

''It would be disappointing to say the least if the opportunity presented by the Doha round were allowed to fail,'' Lipsky said.

He said he was pleased to see the Malian authorities pushing ahead with reforms to the cotton sector that should help boost productivity and create rural jobs.

The state-owned cotton ginning company, CMDT, is due to be privatised in 2008, which IMF officials hope will help make the sector more efficient and allow Mali to process more of its own cotton.

The cotton sector in Mali has also been hit by an appreciation of the local currency against the U S dollar, the emergence of other countries such as Brazil and China as low-cost producers, and slow domestic productivity growth.

A strong cereal harvest and high gold prices nonetheless allowed Mali's economy to grow 6.1 per cent in 2005. IMF officials expect it to grow 5.1 percent this year and 5.4 per cent next.

Reuters AKJ DB2257