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

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eference are limited to neighboring countries. At a time when the design ofcotton sector reform programs has become extremely complex and potentiallyrisky, stronger and broader analysis, drawing on a broader array of empiricalevidence, and reflecting strategically on potential options, would be very usefulfor policy makers. The lack of such analysis, especially of the reform optionsavailable and of their possible implications, partly explains the reluctance ofmany governments to engage in ambitious restructuring of their cotton sectors.Therefore, the main objective of this study is to provide an in-depth andcomparative analysis of the reforms that have been implemented by SSA cottonsectors since 1990, and, from there, to establish links between reforms andobservable outcomes.The state of implementation of cotton sector reforms varies widely fromcountry to country. Serious structural reform of cotton sectors in East andSouthern Africa (ESA) began in the mid-1990s. Reform in West and CentralAfrica (WCA) has been slower, for a complex set of reasons related to bothdomestic and international concerns; among the latter, the case submitted tothe World Trade Organization (WTO) by the Cotton-4 countries (Benin,Burkina Faso, Chad, and Mali) regarding market distortions caused by subsidiesin Organisation for Economic Co-operation and Development (OECD)countries has given a political dimension to the issues in the sector, and figuresprominently among the reasons for resistance to reform in some countries.Resistance is also due to the perception—genuine or not—that the impactof reforms on sector performance, and especially on small farmers, has been atbest mixed. A number of West African leaders and policy makers strongly feelthat the reforms are likely to create major social problems, and the results incountries that have implemented reforms, particularly in ESA, do not make astrong case for privatization and liberalization of the cotton sectors. Given thecomplexities of reform programs and the uncertainties and fluctuations in theworld cotton market, it is also difficult to establish clear causal links betweenstructural changes, risks faced by cotton companies after liberalization, andoutcomes at the farm and sector levels.Abundant literature has been produced in recent years on cotton policies inAfrica. However, there has been little comparative analysis of the actual outcomesof cotton sector reforms as measured by growth and poverty reduction,and the main lessons to be drawn to inform future reform processes. Also, onlylimited attempts have been made to bring together, compare, and assess reformexperiences from WCA and ESA. Bridging these knowledge gaps in an effort tobetter advise governments on cotton sector reform programs and policies providesthe fundamental rationale for this study.A number of SSA cotton sectors, especially in WCA, are currently facingserious short-term financial difficulties. It is important to clarify that the purposeof this report is not to provide quick solutions to these short-run problems.Rather, it is to step back, build up a reliable broad assessment of cottonsector performance from detailed empirical information, and thereby providexivPREFACE
guidance for the design of strategies that will address the long-term challengesof cotton production and marketing in Africa.Finally, to ensure that a broad perspective was brought to bear, the studywas entrusted to a team which includes independent researchers and experts inthe field of cotton. Evidence from the analysis is reported regardless of whetherit confirms previous theories and hypotheses. Interpretations are suggested,but never imposed, and some care is taken to identify assumptions that drivethe analysis. For this reason, the authors, not the World Bank or other bilateraldonors, bear individually the full and final responsibility for the content of thisreport.PREFACExv
Page 1: AGRICULTURE AND RURAL DEVELOPMENTOr
Page 4 and 5: AGRICULTURE AND RURAL DEVELOPMENTSe
Page 6 and 7: © 2009 The International Bank for
Page 8 and 9: Section II. Historical Background a
Page 11 and 12: BOXES, FIGURES, AND TABLESBoxes2.1
Page 13: 5.2 Summary of Pricing Mechanisms i
Page 19 and 20: ACKNOWLEDGMENTSThis study was carri
Page 21 and 22: ABBREVIATIONS¢ U.S. centACPAgricul
Page 23: US$U shWAEMUWCAWTOU.S. dollarUganda
Page 26 and 27: output markets, improving productiv
Page 28 and 29: etween these competing needs, provi
Page 30 and 31: ■■■■■competition increase
Page 32 and 33: monopolies range from 0.98 to 1.15,
Page 34 and 35: macroeconomics, developments in com
Page 36 and 37: central body and that the state nee
Page 39 and 40: CHAPTER ONEIntroductionDavid Tschir
Page 41 and 42: The debate about how to deal with t
Page 43 and 44: Figure 1.1 Map of Africa Highlighti
Page 45: hypotheses about sector performance
Page 48 and 49: to reach 25 million tons of lint in
Page 50 and 51: cotton production was introduced in
Page 52 and 53: Figure 2.2 Nominal Cotton Prices (U
Page 54 and 55: Box 2.1 (Continued)Togo, 39 percent
Page 56 and 57: Box 2.2 Cotton SubsidiesCotton subs
Page 58 and 59: efers specifically to the presence
Page 60 and 61: picking, storage, handling, or tran
Page 62 and 63: national monopoly (state-owned or p
Page 65: SECTION TWOHistorical Background an
Page 68 and 69:
shares belonging to governments, an
Page 70 and 71:
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
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Box 4.2 (Continued)Second, farmers
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SECTION THREEComparative Analysis:C
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PRICING MECHANISMS IN WCAPricing me
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efore planting, price risk in the s
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Table 5.3 Summary of Producer Share
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Finally, FOT price shares in WCA ro
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MALI AND CAMEROON: GOVERNMENT MONOP
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Significant in Mozambique, the comp
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Zimbabwe transitioned during the 19
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Box 6.1 (Continued)A move from a co
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82Table 6.1 Summary of Input Supply
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84Table 6.1 (Continued)IndicatorsCo
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CHAPTER SEVENQuality ControlGérald
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Tanzania Competitive 1 2 Very lax n
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Figure 7.1 Estimated Premium for To
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all fiber coming from Africa—are
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Box 7.1 (Continued)newly liberalize
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CHAPTER EIGHTValorization of SeedCo
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competitive market in some of the o
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a few years, it indicates that some
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should eventually make a difference
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CHAPTER NINECotton ResearchDuncan B
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With regard to human and financial
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■■■Be involved in setting res
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made royalty payments to CRI. When
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and to identify complementary inves
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CHAPTER TENYields and Returns toFar
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fact that 55 percent of cotton is p
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Yields by Farmer TypeTo assess perf
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Factors beyond company services als
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Table 10.1 Summary Crop Budgets by
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According to the focus group inform
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Figure 10.6 Net Margins after All C
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All other variables in the budgets
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Table 10.2Summary of Average Yield
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■■■■impression is given tha
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were based on a 2005 cotton farmer
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more recent data are not available
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Figure 11.1 Estimated Average Ginni
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to buy seed cotton immediately afte
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146Table 11.3 Overall Competitivene
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148Table 11.4 Total Value Added per
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Figure 11.3 Total Value Added per c
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CHAPTER TWELVEConclusionsPatrick La
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Table 12.1 Summary of Expected and
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Valorization ofby-productsValue of
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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/
Page 225 and 226:
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
Page 256 and 257:
CFA exchange rate, 17-18b, 19fcompa
Page 258 and 259:
input credit and extension in, 77-8
Page 260 and 261:
firm types, 211n93fixed prices, for
Page 262 and 263:
productivity, 119, 121f, 205n8,209n
Page 264 and 265:
key indicators, 56-58, 57-58t,155-5
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focus group discussions by farmerty
Page 268 and 269:
technology transfer, 170-71by typol
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ECO-AUDITEnvironmental Benefits Sta
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