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

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146Table 11.3 Overall Competitiveness Indicator: FOT Costs/FOT Revenue, 2006/07 (all costs and revenues in US$/kg lint)Burkina Faso Cameroon Mali Mozambique Zambia ZimbabweLocalMonopolyNationalMonopolyNationalMonopolyLocal Tanzania UgandaMonopoly Competitive HybridConcentratedConcentratedCostsProducer price/kg lint 0.78 0.78 0.75 0.51 0.69 0.71 0.64 0.67Adjusted farm gate toFOT costs (fromtable 11.2) 0.374 0.308 0.446 0.384 0.214 0.319 0.319 0.255Direct taxes n.a. 0.004 n.a. 0.022 0.037 0.026 0.012 0.006Critical functionsExtension 0.025 0.027 0.040 0.007 n.a. 0.027 0.015 0.029Roads, research, other 0.004 0.015 0.010 n.a. 0.019 n.a. n.a. n.a.Input subsidies n.a. n.a. 0.018 n.a. n.a. 0.084 n.a. n.a.Total FOT costs 1.18 1.13 1.26 0.92 0.96 1.17 0.99 0.96IncomeFOB value (CFR bminus freight andhandling) 1.18 1.18 1.18 1.18 1.19 1.19 1.19 1.05 aFOT to FOB costs 0.15 0.19 0.15 0.03 0.10 0.13 0.14 0.11FOT value 1.03 0.99 1.03 1.15 1.09 1.06 1.05 0.94Quality premium 0.04 0.07 0.02 –0.04 –0.01 0.04 0.11 0.06Sale of seed/kg lint 0.06 0.09 0.05 0.05 0.08 0.16 0.11 0.13Total Income, FOT 1.13 1.15 1.10 1.16 1.16 1.26 1.27 1.13FOT cost/FOTrevenue 1.05 0.99 1.15 0.80 0.83 0.93 0.78 0.85Source: Authors.Note: n.a. = Not applicable.a. Taking into consideration sales on domestic market (30 percent of sales) at a lower administered price.b. CFR = Costs, insurance, freight.
WCA than in ESA (US$0.025 to US$0.040 per kg of lint, compared with zeroto US$.029 per kg of lint in ESA), and they are highest in Mali, because thescope of extension includes rural development functions beyond cotton.Extension in Cameroon also covers rural development, but its cost is sharedbetween the cotton company and the farmer association. The monopoly cottoncompanies also contribute to road maintenance and research costs, thoughprobably less in Mozambique than in the WCA countries. 81MACRO IMPACTSThe two macro impact indicators are per capita total value added from the cottonsector and per capita net budgetary contributions of the sector. Valueadded at the farm level is calculated by subtracting nonlabor production costsfrom the farm gate value of seed cotton production. In the absence of mean figuresacross all farmers, the data for the farmer group that contains the medianfarmer are used (see table 11.4 and figure 11.3).Value added is calculated using two different definitions of nonlabor productioncosts. In the first case, input costs are deducted from the gross value ofseed cotton production. In the second case, costs of animal traction andmotorized services are also deducted, although the latter are extremely rare.The most appropriate definition can be debated. The argument for deductinganimal traction costs from value added is that they include rental or amortizationof equipment, plus veterinary and feeding costs for oxen. These intermediateinputs account for about 80 percent of the estimated animal tractioncosts in WCA sectors. The argument for not deducting animal traction costs isthat oxen (and, indeed, equipment) are assets that farm households have accumulatedin large part through their engagement with cotton production.Deducting animal traction costs would have the perverse effect of lowering theestimates of the value added generated by WCA sectors (because these sectorshave proceeded further with animal traction than ESA) when this progressowes much to cotton.Value added at the ginnery stage can be estimated by subtracting all nonlaborand nontax costs for purchase and collection of seed cotton and for processingand marketing of lint cotton from the total FOT value of lint andseeds. The two value-added numbers are then summed, and the result is convertedto per capita figures by multiplying by production and dividing by totalcountry population (table 11.4, figure 11.3).WCA countries perform relatively poorly on total value added per kg oflint. Yet Burkina Faso and Mali perform quite well when this number isadjusted to the country’s total population; the two different treatments of animaltraction costs have no impact on overall conclusions. The high valueadded per capita in Burkina Faso and, to a lesser degree Mali, flows directlyfrom the orientation of the national monopolies (now local monopolies inBurkina Faso) to extend cotton cultivation to all farmers in areas deemedCOST EFFICIENCY, SECTOR COMPETITIVENESS, AND MACRO IMPACT 147
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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
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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
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 and 146: ■■■Be involved in setting res
Page 147 and 148: made royalty payments to CRI. When
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 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
Page 197 and 198: across concession zones, with newer
Page 199 and 200: high yields. However, a mixed pictu
Page 201 and 202: governance and regulatory structure
Page 203 and 204: against price and exchange rate ris
Page 205 and 206: Improvements in the Delivery of Ext
Page 207 and 208: esistant, “stacked” genes), and
Page 209 and 210: Just as improved sector management
Page 211 and 212: More-competitive systems are perhap
Page 213 and 214: ■■■■Interprofessional commi
Page 215 and 216: were to occur, it would most likely
Page 217 and 218: APPENDIX AStatistical Tables181
Page 219 and 220: 1989/90 43 111 383 40.7 95 0.491990
Page 221 and 222: 1989/90 62 150 416 41.0 95 0.671990
Page 223 and 224: 1989/90 43 89 482 41.3 95 0.651990/
Page 225 and 226: 1989/90 99 189 521 42.8 85 0.541990
Page 227 and 228: 1997/98 31 327 95 33 to 35 2,950 83
Page 229 and 230: 1994/95 82 344 238 33 207.0 40.0119
Page 231 and 232: 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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