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

■make the existing system work better. Both of these issues are examined inmore concrete terms later in this chapter.Fourth, although some African cotton sectors may be faring better than others,on a global scale all are lagging behind the best performers in the world.Global competitiveness must, therefore, be kept high on the agenda in everyAfrican cotton sector. Though a number of SSA producers have succeededin expanding their share of the world lint market since the mid-1990s, theyface increasing competition from other countries and from synthetic fibers;hence they should expect low future prices. This expectation means thatthey must continually cut costs, raise productivity, and add value if they areto maintain attractive returns to producers and to make a positive contributionto national poverty reduction goals. Whether this change needs to bedone through systemic reform or through institutional innovation withinthe existing structure depends on the country’s specific circumstances. Ineither case, countries need to address (a) some common factors hinderingcompetitiveness by improving research and extension responsiveness andefficiency, (b) technology transfer in areas such as dissemination of geneticallymodified varieties, and (c) natural resource conservation.Performance on Core Activities and Service Delivery:The Process IndicatorsThe typology presented in this book generated clear expectations regarding fourof the six selected process indicators (quality, pricing, input provision, and extension).In all four cases, expectations were largely confirmed (table 12.1).Concentrated sectors perform best on quality. They also provide inputcredit and extension advice to large shares of cotton farmers, although farmercoverage is not as complete as in national and local monopolies. Credit repaymentrates in concentrated systems are typically high but is less stable than innational monopolies. The 1990s showed that concentrated systems can deliverattractive prices to farmers. However, post-2000 performance has been poor, asmight be feared in oligopolies.National and local monopolies in WCA countries provide input credit andextension to all farmers and achieve high and fairly stable credit repaymentrates. However, the quality of extension assistance in these monopoly systemshas probably declined since the mid-1980s.Although seed cotton prices were at their lowest in the 1990s, since 2000,they have benefited from new price-setting mechanisms, including greaterinvolvement of farmer representatives in price negotiations. However, they arenow at unsustainably high levels. Performance on lint quality is variable. Ingeneral, these monopoly systems underperform on quality management, inpart because of political influence within the cotton sector.Meanwhile, Mozambique’s local monopoly system underperforms expectationsmore generally, although there is considerable divergence in performance160 LABASTE, POULTON, AND TSCHIRLEY