Organization and Performance of Cotton Sectors in Africa ... - infoDev

20–25 percent in the late 1990s) and less than 50 percent could be sold as oneof the top three grades. Similarly, at COTTCO’s Gokwe ginnery, a striking declinewas recorded in the proportion of seed cotton supplies classed as grade Abetween 2003 (26 percent) and 2004 (5 percent). Because 2003 was the year inwhich flat-rate buying was introduced within the sector, this dramatic declinein quality shows that farmers adapted to the new incentive system in a singleseason. Another notable drop in quality (principally affecting the proportionof B grade cotton) occurred in 2006, a year of exceptional price competitionbetween companies. Thus, the share of seed cotton achieving grades A or B fellfrom 65 percent in 2003 to 20 percent in 2006. Returning to figures 7.1 and 7.2,the country’s premium would have been substantially higher in the early2000s—before the intensified competition within the sector—and is likely tofall in the latter years of the 2000s if quality control measures are not improved.CONCLUSIONSOverall, quality performance is remarkably consistent with the expectationsgenerated from the typology: Zambia’s concentrated system delivers the bestperformance, comparable to what Zimbabwe delivered before the entry of newcompetitors. Zimbabwe’s premium is still high but is falling as a result ofincreased competition. Cameroon, with a national monopoly largely free ofpolitical meddling, also performs well, though not up to the standards of Zambia.The other national and local monopolies show highly variable performance,while Tanzania’s competitive system is, along with Mozambique, the worstquality performer.Table 7.1 summarizes available quality information for each country in thisstudy. Growing fewer varieties in a country makes it easier to maintain homogeneityof quality, though proper controls (as in Zambia, which grows at leasttwo varieties) and good classification can ensure good performance even whenseveral varieties are grown. Having more seed cotton grades is generally goodbut only if strictly linked to lint classification outcomes. Instrument testing isincreasingly important in the global lint market but is rarely used in Africa.International cotton merchants put great importance on the reliability of lintclassification in a country, independent of the actual quality of the lint. Lintthat is typically high quality but not reliably classified will not earn the premiumthat it otherwise would. Longer staple length is always good, andinch is a typical benchmark. Contamination is crucial in pricing, and a reputationfor high contamination is difficult to overcome. All of these factors contributeto the average premium a country is able to earn over the Cotlook AIndex; these estimates are presented in the final column of table 7.1 and are discussedin more detail in the next chapters.96 ESTUR, POULTON, AND TSCHIRLEY