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

An important lesson from this analysis is that assisting more farmers tomove into groups 1 and 2 is critical for sector competitiveness (see data oncosts of production in table 10.1) and for poverty reduction (see figure 10.4).Cotton sectors in WCA countries have assisted more farmers in rising togroups 1 and 2 over time through their promotion of animal traction, whichallowed farmers to increase their cotton area and yields. The majority of farmersin WCA also enjoy access to inputs that only the top households in selectedESA sectors enjoy. At the same time, recent strong political pressures have contributedto high (though unsustainable) seed cotton prices for WCA producers.These broadly based successes with input provision and animal traction,together with recent high prices, are reflected in the relatively high weightedaverage returns to farmers in all three WCA countries. There is hope to reducethe high producer prices, allowing WCA cotton companies to break even, andstill to realize returns at least as high as those achieved by most ESA sectors.The analysis also suggests that Zimbabwe is the best performer among ESAcountries from a farmer’s perspective, with Zambia and Tanzania hard to separate.However, given that the Tanzanian figures are based on a very good yearand that the Zambia labor input data are perhaps on the high side, thereforeunderestimating returns, Zambia probably has the edge. Thus, another keyfinding of this section is that, although competitive sectors within ESA haveoutperformed more coordinated ones on pricing (chapter 5), from a farmer’sperspective they have not done so to such an extent as to outweigh their disadvantagesin service provision.Some doubts linger over input data for Mozambique (labor) and Uganda(hired services). However, apparently unattractive returns for the majority offarmers are consistent with disappointing medium-term production growthin both countries. A better-regulated local monopoly model should be able todeliver better services to more farmers than has so far been the case inMozambique.The question then becomes to what extent current performance at the farmlevel reflects the current state of the sector and how much it reflects the laggedimpact of past sector performance. This study suggests that the lagged impactof past performance is large. This finding is clear both in WCA and in Zimbabwe,where COTTCO’s assistance through the early to mid-2000s is still felt. WCAsectors continue to benefit from past investments, but they have seen stagnantproductivity growth since the mid-1980s (area planted has risen, but yield andnet margins have stagnated or fallen). (See table 10.2 for a summary.)It is, of course, difficult to predict future trends. The most confident predictionis that there will be limited change in the findings of this type of analysisover the next five years.132 POULTON, LABASTE, AND BOUGHTON