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

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varieties developed for similar agro-ecological conditions in other countries, aswell as to test improved crop management practices. Stakeholders meet oneday a year to report on and plan research activities. This low transaction costapproach, plus company input into the subsequent work, seems to have convincedcompanies that it is an initiative worth their participation.In Tanzania, despite the existence of the Tanzania Cotton Association(TCA), ginners’ participation in the management of the sectorwide CottonDevelopment Fund and despite several years of uncertainty over the status andquality of the new UK91 seed, ginners have not organized to demand greateraccountability of the cotton research system to industry stakeholders. In 2006,TCA set up a Crop Development Committee to consider all matters related toproduction enhancement (presumably including research). However, as ofearly 2007 the committee had not held its first meeting. This lack is perhapssymptomatic of the incentive problem (free-riding) in a competitive marketstructure. Nevertheless, the fact that much research funding came throughCotton Development Fund levies for a few years may have raised expectationsabout performance. In 2006, the government committed once again to pay forresearch directly as a way of reducing levies within the sector. As a result, theflow of funds became too unreliable to sustain serious research activity. Breakingthe stakeholder-funding link was a step backward.In Zambia since 1999, research has been the responsibility of the CottonDevelopment Trust (CDT), which is intended to be semi-autonomous toencourage greater participation by other stakeholders, including farmers andginners. Ginners were skeptical of CDT at its inception, given the moribundnature of the state research apparatus that it replaced and the fact that many ofthe staff members were the same. To counter this overlap, CDT sought to buildrelationships with ginners and farmers, including involving them in researchpriority setting and farm trials. However, ginners resisted the notion of a levyto fund research within the sector until they could see that funds might be usedeffectively. This resistance highlights the point that ginners expect to monitorresearch performance and to see an accounting of how research funds are usedin return for their contributions to funding the research. As of mid-2008, littleactive collaboration existed between the major ginners and CDT.Within ESA the greatest involvement of the private sector in cotton researchhas occurred in Zimbabwe. As noted above, Zimbabwe has a strong traditionof public sector cotton research conducted in collaboration with the privatesector. This approach dates back to an era when the Commercial Farmers’Union advocated strongly for public investment to support the interests andcompetitiveness of the country’s white commercial farmers. After independence,close links were maintained between the parastatal Cotton MarketingBoard (CMB) and the Cotton Research Institute (CRI). Following liberalization,Quton Seed Company, a wholly owned subsidiary of CMB’s privatizedsuccessor COTTCO, was granted monopoly rights to multiply and sell to thewhole sector seed varieties produced by CRI, in exchange for which Quton110 BOUGHTON AND POULTON
made royalty payments to CRI. When state funding for CRI collapsed after2001, these royalty payments became increasingly important, albeit inadequateto sustain a dynamic program. Quton, therefore, began to invest in its ownresearch capability, which is now reckoned to surpass that of CRI. As of early2007, Quton was preparing to release the first products of its in-house researchactivity, and there was also talk of Quton taking over the assets of CRI. Quton’sinvestment first in CRI and later in its own research capacity reflects the strongrecognition within Zimbabwe of the importance of productivity-enhancingresearch. However, it is no coincidence that it has occurred in a concentratedsector where COTTCO, as the largest firm, is also the biggest beneficiary ofnational research outputs.Historically, the parastatals in WCA were heavily involved in funding cottonresearch. One consequence of this involvement was the focus within breedingprograms on varieties with higher ginning outturn ratios (GORs) that lead toimproved ginning margins, rather than on farm yield. In theory, higher ginningmargins can be passed on to farmers, but it is not clear that farmers wouldhave made this their breeding priority had they been consulted at the time.Also, GOR is less visible to farmers than it is to ginners and is less visible tofarmers than is farm yield. Both these characteristics suggest that, especiallywhere ginners have some market power, farmers will benefit more fromincreases in farm yields than from increases in GOR. Since 2000, the mainorganizational change in WCA has been a trend toward joint financing ofresearch by all stakeholders through the interprofessional organizations set upin response to financial crises.Research systems in WCA and ESA will increasingly have to respond todemand from international traders and spinners to take into account a morecomplex set of fiber quality parameters in variety selection (chapter 7).Increasing the number of parameters can dramatically complicate breedingprograms, suggesting even greater need for increased resources for varietalresearch in these countries. 69 Also, because economies of scale in research maybe high where several countries share common agro-ecological conditions,these more complex demands on breeders provide additional arguments forstrengthening regional collaboration in these programs.CONCLUSIONSOverall, research in African cotton systems is underperforming, as evidencedprimarily by the slow rate of yield growth and technology adoption in Sub-Saharan Africa relative to other major cotton growing areas of the world. Reasonsfor this poor performance include the limited resources invested in cottonresearch, lack of incentives and accountability for publicly funded researchers,weak links among researchers in different countries, and the limited responsivenessof cotton research programs to ginners and farmers. Governments haveCOTTON RESEARCH 111
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AGRICULTURE AND RURAL DEVELOPMENTOr
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AGRICULTURE AND RURAL DEVELOPMENTSe
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© 2009 The International Bank for
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Section II. Historical Background a
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BOXES, FIGURES, AND TABLESBoxes2.1
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5.2 Summary of Pricing Mechanisms i
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eference are limited to neighboring
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ACKNOWLEDGMENTSThis study was carri
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ABBREVIATIONS¢ U.S. centACPAgricul
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US$U shWAEMUWCAWTOU.S. dollarUganda
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output markets, improving productiv
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etween these competing needs, provi
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■■■■■competition increase
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monopolies range from 0.98 to 1.15,
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macroeconomics, developments in com
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central body and that the state nee
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CHAPTER ONEIntroductionDavid Tschir
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The debate about how to deal with t
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Figure 1.1 Map of Africa Highlighti
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hypotheses about sector performance
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to reach 25 million tons of lint in
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cotton production was introduced in
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Figure 2.2 Nominal Cotton Prices (U
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Box 2.1 (Continued)Togo, 39 percent
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Box 2.2 Cotton SubsidiesCotton subs
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efers specifically to the presence
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picking, storage, handling, or tran
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national monopoly (state-owned or p
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SECTION TWOHistorical Background an
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shares belonging to governments, an
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Changes Made Since the End of the 1
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long-term development strategies, (
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possible link between price-setting
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production fell further, to lows of
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all aspects of the chain from input
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suggestions (a) of establishing fas
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Figure 4.1 Decision Tree for Cotton
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Figure 4.2 African Cotton Sector Ty
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Box 4.1 Is This Typology Specific t
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52Table 4.1 Trading Off: Strengths
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CONCEPTUALIZATION OF THE LINKS BETW
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chosen in this book and the impact
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Table 4.3 Expected Performance alon
Page 96 and 97: Box 4.2 (Continued)Second, farmers
Page 99: SECTION THREEComparative Analysis:C
Page 102 and 103: PRICING MECHANISMS IN WCAPricing me
Page 104 and 105: efore planting, price risk in the s
Page 106 and 107: Table 5.3 Summary of Producer Share
Page 108 and 109: Finally, FOT price shares in WCA ro
Page 110 and 111: MALI AND CAMEROON: GOVERNMENT MONOP
Page 112 and 113: Significant in Mozambique, the comp
Page 114 and 115: Zimbabwe transitioned during the 19
Page 116 and 117: Box 6.1 (Continued)A move from a co
Page 118 and 119: 82Table 6.1 Summary of Input Supply
Page 120 and 121: 84Table 6.1 (Continued)IndicatorsCo
Page 123 and 124: CHAPTER SEVENQuality ControlGérald
Page 125 and 126: Tanzania Competitive 1 2 Very lax n
Page 127 and 128: Figure 7.1 Estimated Premium for To
Page 129 and 130: all fiber coming from Africa—are
Page 131 and 132: Box 7.1 (Continued)newly liberalize
Page 133 and 134: CHAPTER EIGHTValorization of SeedCo
Page 135 and 136: competitive market in some of the o
Page 137 and 138: a few years, it indicates that some
Page 139 and 140: should eventually make a difference
Page 141 and 142: CHAPTER NINECotton ResearchDuncan B
Page 143 and 144: With regard to human and financial
Page 145: ■■■Be involved in setting res
Page 149: and to identify complementary inves
Page 153 and 154: CHAPTER TENYields and Returns toFar
Page 155 and 156: fact that 55 percent of cotton is p
Page 157 and 158: Yields by Farmer TypeTo assess perf
Page 159 and 160: Factors beyond company services als
Page 161 and 162: Table 10.1 Summary Crop Budgets by
Page 163 and 164: According to the focus group inform
Page 165 and 166: Figure 10.6 Net Margins after All C
Page 167 and 168: All other variables in the budgets
Page 169 and 170: Table 10.2Summary of Average Yield
Page 171 and 172: ■■■■impression is given tha
Page 173: were based on a 2005 cotton farmer
Page 176 and 177: more recent data are not available
Page 178 and 179: Figure 11.1 Estimated Average Ginni
Page 180 and 181: to buy seed cotton immediately afte
Page 182 and 183: 146Table 11.3 Overall Competitivene
Page 184 and 185: 148Table 11.4 Total Value Added per
Page 186 and 187: Figure 11.3 Total Value Added per c
Page 189 and 190: CHAPTER TWELVEConclusionsPatrick La
Page 191 and 192: Table 12.1 Summary of Expected and
Page 193 and 194: Valorization ofby-productsValue of
Page 195 and 196: Macro impact■ Total value addedpe
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across concession zones, with newer
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high yields. However, a mixed pictu
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governance and regulatory structure
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against price and exchange rate ris
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Improvements in the Delivery of Ext
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esistant, “stacked” genes), and
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Just as improved sector management
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More-competitive systems are perhap
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■■■■Interprofessional commi
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were to occur, it would most likely
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APPENDIX AStatistical Tables181
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1989/90 43 111 383 40.7 95 0.491990
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1989/90 62 150 416 41.0 95 0.671990
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1989/90 43 89 482 41.3 95 0.651990/
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1989/90 99 189 521 42.8 85 0.541990
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1997/98 31 327 95 33 to 35 2,950 83
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1994/95 82 344 238 33 207.0 40.0119
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Table A8 ZambiaSeasonLint productio
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Table A9 ZimbabweSeasonLint product
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Table A10 Ginning and FOB-to-CIF Co
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1997/98 1.64 598 210 75 49 74 7.619
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1987/88 17,609 31,238 564 414 911 4
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206 NOTES11. Important cotton secto
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208 NOTES47. Benin is not included
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210 NOTES79. In Zimbabwe and Zambia
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BIBLIOGRAPHYBadiane, Ousmane, Dhane
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and Instability, ed. A. Sarris and
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World Bank. 2007. Strategies for Co
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CFA exchange rate, 17-18b, 19fcompa
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input credit and extension in, 77-8
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firm types, 211n93fixed prices, for
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productivity, 119, 121f, 205n8,209n
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key indicators, 56-58, 57-58t,155-5
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focus group discussions by farmerty
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technology transfer, 170-71by typol
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ECO-AUDITEnvironmental Benefits Sta
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