* Subsidies are "impossible to defend" - chief executive
* Fairtrade identifies cotton as top priority
* Fairtrade looks to U.S. to expand consumer products market
By Clare Hutchison
LONDON, Nov 19 (Reuters) - World leaders must act to end the "glaring inequality" in cotton trade by rethinking subsidies paid to farmers that undermine the livelihoods of cotton farmers in some of the world's poorest areas, the new global head of Fairtrade International said.
Fairtrade International has named cotton production among its top priorities, as farmers in the cotton-four countries - Benin, Burkina Faso, Chad and Mali - struggle to compete with subsidised supplies of the fibre from farmers within the European Union and the United States, its new Chief Executive Harriet Lamb told Reuters in an interview.
A 2010 report by the Germany-based ethical label group found that the U.S. and EU spent $31.45 billion on cotton subsidies in previous the nine years, which suppressed global cotton prices, reduced demand for West African cotton and blocked producers' route out of poverty.
Farmers who sell to the Fairtrade market are paid a minimum price plus a premium to invest in social, environmental and economic development.
Lamb, who took the helm at Fairtrade International in September, said the organisation was planning ways to overhaul the way it works with cotton growers and urged the U.S. and Europe to do the same.
"I really hope that now the U.S. (presidential) election is over, that the U.S. can focus its attention on addressing that glaring inequality that has been highlighted by everybody from the World Bank to the International Monetary Fund to Oxfam - it's impossible to defend the situation of unfair trade in cotton and yet it goes on unaddressed," Lamb said.
"I would call upon both the British government and the EU in particular to really put addressing the inequalities in cotton trade higher up the agenda," she added.
COCOA EXPANSION
Along with cotton, Fairtrade has identified cocoa, coffee, sugar, bananas, tea and flowers as the core products it intends to focus on until the end of 2015, according to a new strategic framework.
As well as targeting products, the group will concentrate its work on helping farmers in regions that are coming out of conflict or are among the least developed.
Top cocoa bean grower Ivory Coast, which endured a civil war last year, has been a particular area of success for Fairtrade, with the number of Ivorian farming groups working with the organisation rising from 15 to 50 in the past year, Lamb said.
Some agricultural activities in parts of North Africa caught up in the "Arab Spring" have also been recently Fairtrade certified, she added.
"We just certified a women's co-op doing argan (hair) oil in Morocco and we're working with olive oil farmers in Palestine and working in Lebanon - those would be examples where we tried to go the extra mile in the least developed countries or countries coming out of conflict."
Fairtrade is also planning to tread new ground with its consumer goods, by launching products in retailers in Brazil and India next year. Fairtrade-labelled goods are already available in other emerging markets, including South Africa, where sales grew by almost 300 percent between 2010 and 2011.
Fairtrade will also execute a push into the U.S. with brands like Green & Black's chocolate and Thanksgiving Coffee as it aims to tap the huge U.S. consumer products market and raise awareness of its brand.
However, Lamb said its more developed markets, such as Britain and Switzerland, remain critical to its success.
Growth in both established markets and emerging markets helped Fairtrade's global sales climb 12 percent to almost 5 billion euros ($6.1 billion) in 2011, the organisation reported in July.
