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

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This final chapter summarizes the study’s main findings on the links betweensector types and performance outcomes. It then suggests ways forward forAfrican cotton sectors, looking first at themes that cut across sector types, thenindividually at each sector type.SUMMARY OF EXPECTED AND REALIZED PERFORMANCEACROSS KEY INDICATORSTable 12.1 brings together information on the selected performance indicatorsby sector type, comparing expected with realized performance. The expectationsgenerated from the typology in chapter 4 about the strengths and weaknessesof different sector types are borne out in a number of ways, if not inall cases.With regard to sector structure, the following four broad conclusions emergefrom the study:■■■First, no one sector type performed sufficiently well on all performanceindicators and throughout the past 10–15 years to be considered unambiguously“best.” The study has revealed strengths and weaknesses in all systems,particularly when they are examined over an extended period. All cottonsectors are seeking to adapt by implementing reforms.Second, although no single benchmark model emerges from the countriesunder review, useful distinctions can and must be made. Current weaknessesof some of the WCA sectors—lack of financial sustainability, loweconomic efficiency, and stagnating productivity at farm level—threatentheir short-term survival. At the other end of the spectrum, competitivemodels such as Tanzania and Uganda are apparently stuck with low productivityand (in unregulated Tanzania) low quality, plus long-term concernsabout resource depletion and an inability to make a significant dent inpoverty rates. By contrast, the concentrated and, less clearly, the localmonopoly systems seem to have the greatest capacity to tackle their currentdifficulties, to develop regulatory systems, and to deliver improved performancein the near future. Sector type does matter.Third, although there has been considerable fluidity in the structure ofAfrican cotton sectors over the past 10–15 years (see figure 4.2), there isalso an element of path dependency in sector structure. 83 It is difficult toconsolidate a sector from 30 or more ginning companies to five or six.Conversely, it is not advisable and realistic for a country to try to changeovernight from a highly coordinated national monopoly—with its beliefsand operating procedures—to a fragmented, competitive model. Whereneeded, systemic reforms should, therefore, be designed to shift sectorstructure progressively toward a preferred alternative model rather thanradically altering the structure over a short period. Where systemic reformis not called for, the priority is to seek new institutional arrangements that154 LABASTE, POULTON, AND TSCHIRLEY
Table 12.1 Summary of Expected and Realized Performance across Key IndicatorsType of indicator Indicator Expected performance Realized performance CommentsProcess indicatorsQualityEstimated averagerealized premiumover Cotlook AIndex on worldmarkets (US$/lblint)■ Best in concentratedsectors■ Lowest in competitive■ Conditions innational and localmonopolies thatshould be conduciveto quality, butperformance thatdepends onmanagement cultureand regulatoryeffectiveness■ Best in competitivesystems■ Lower inconcentrated,market-based sectors■ In national and localmonopolies, dependson political factors andbargaining strength offarmer organizations■ Expectations largely confirmed inESA market-based sectors; Zambia(most concentrated) +0.05/lb,Zimbabwe +0.03/lb, Uganda+0.02/lb, Tanzania (mostcompetitive) –0.01/lb■ State monopolies in WCA lowerthan concentrated sectors in ESA,at par to +0.03/lb■ Mozambique (local monopoly)worst at –0.02/lb■ Mozambique performancethat is highly variable acrosscompanies; ineffectiveregulation and previousdominance of originalinvestors (with little focus onproductivity and quality) stillaffecting overall premiums■ Zimbabwe performance thathas fallen with new entrants■ Mali is the poorestperformer in WCA becauseof management issues■ High share of world price incompetitive systems(Tanzania, Uganda)■ High prices to farmers inWCA are not sustainable■ Prices exceptionally low inZimbabwe in early 2000s, butimpact of new entry on pricestill to be provenPricingMean percentage offree-on-truck(FOR) paid tofarmers■ Expectations largely confirmedoutside monopoly sectors:Tanzania (most competitive) 70%,Uganda 68%, Zimbabwe (moreconcentrated) 49%, Zambia (mostconcentrated) 55%■ National monopoly systems allpaid 71%–76% in 2000–5, butmuch lower levels in 1990s■ Mozambique, with least powerfulfarmer groups and local monopolysystem, lowest at 48%(continued)155
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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
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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
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
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Page 147 and 148: made royalty payments to CRI. When
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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: CHAPTER TWELVEConclusionsPatrick La
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
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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
Page 233 and 234: Table A9 ZimbabweSeasonLint product
Page 235 and 236: Table A10 Ginning and FOB-to-CIF Co
Page 237 and 238: 1997/98 1.64 598 210 75 49 74 7.619
Page 239: 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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