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

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