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

across concession zones, with newer entrants often outperforming early incumbents.Mozambique has the highest quality discount on world markets and, inseveral concession areas, the poorest input supply and extension assistanceoutside of Tanzania. This performance is less surprising when one considersthat the country emerged from a devastating civil war only in the early 1990sand that its regulatory capacity remains very low.Evidence is strong in Tanzania and Uganda that, within market-based systems,competition increases prices paid to farmers. Despite the recent high pricespaid by the WCA monopoly systems, taking a 20-year perspective, WCA sectorshave been outperformed on price by Tanzania and Uganda. However, competitivesystems clearly also have their weaknesses. Tanzania’s competitive sector hasbeen unable to provide any input credit or extension advice, and also it performspoorly on lint quality, as predicted. Uganda has maintained a quality premiumsince liberalization, although this premium has declined. Since the early 2000s, itattempted to address the challenges of providing input and extension to farmersby curtailing output market competition through the zonal quota system.To date, there is little evidence of the impact of sector structure on researchsystem performance. In theory, companies within monopoly and concentratedsystems should have stronger incentives and greater ability to demand highquality research from research systems. However, in practice most research systemsremain firmly under state control so that opportunities for stakeholderinfluence are limited. The effect of past investment is probably highest in thisrealm. Mali, with many years of support from French research institutions, wasable to carry on some of that momentum and released six varieties over the past10 years. However, an emphasis on improved ginning outturn instead of higherseed cotton yields may have reduced the contribution that research could otherwisehave made to reversing the yield stagnation seen in WCA countries.Zimbabwe, which featured close collaboration for many years among its ownnational monopoly, the research institute, and the commercial farmers, has alsobeen able to maintain some capacity in this area and has released at least fourvarieties since the mid-1990s. Other countries (with less historical investment inresearch) have been less successful in this regard, though Zambia has been effectiveat purifying existing varieties and at exploiting more of their yield potential.Finally, there are few reasons that the performance of seed processing industriesshould be related to the type of cotton sector organization other thanwhere the two industries are strongly vertically linked (as historically acrossWest Africa). Indeed, the main finding in relation to seed pricing is that—inthe two monopoly systems in which cotton companies also face monopsonisticcottonseed oil markets (Burkina Faso and Mali)—prices for seed during2006 were extremely low. Elsewhere, factors beyond the control of cotton companies(whether a country is landlocked, the strength of local demand for cakefrom the livestock sector, the trade policy) largely influence outcomes. Moreresearch is needed to understand the performance of African oil and cake marketsin greater depth.CONCLUSIONS 161