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

high yields. However, a mixed picture emerges in value added per kg of lintbecause of the high input costs incurred in WCA systems. More efficient ginnersin ESA score highly on value added at ginning level. Thus, although BurkinaFaso achieved the highest aggregate value added in the year for which thesecalculations were undertaken, in an unexpected result, three ESA sectors (Tanzania,Zambia, and Zimbabwe) outperformed Cameroon and Mali. 84 Translatingthese figures into value added per capita (across the whole population), BurkinaFaso again performs best. However, the concentrated systems in ESA againperform well, driven by the financial capacity of firms to provide adequateinput packages and some extension to large numbers of farmers. Tanzania hasthe largest population in the sample, so even with its record production in theyear in question, its per capita indicator is low. Perhaps the main lesson to bedrawn from this analysis is that the relative inefficiency of WCA ginning operationsgreatly reduces their value added contribution to the wider economy,despite their ability to assist large numbers of farmers in achieving relativelyhigh yields.Finally, the positive performance on per capita value added in Burkina Fasoand Mali has come at a steep cost to the rest of the economy, especially to thestate budget, particularly in recent years. Following the 2006 season, Mali’s cottonsector required a net budgetary transfer of US$2.47 per capita (US$29 milliontotal; see table 11.5) to cover its losses, while Burkina Faso’s required US$0.81per capita (US$11 million total). Alone among the WCA countries,Cameroon’s SODECOTON was able to cover recent losses through surplusesgenerated in earlier years. Overall and even excluding Burkina Faso and Mali,the market-based sectors (Tanzania, Zambia, and Zimbabwe) made net percapita budgetary contributions in 2006 at least twice as large as the monopolyor hybrid systems (Cameroon, Mozambique, and Uganda).In summary, the WCA national monopoly model has generated strongreturns to very large numbers of farmers, but poor incentives for cost efficiencyhave undermined their international competitiveness and their contribution tothe wider economy. It is clear that the appreciation of the euro versus the dollarin recent years has contributed to the current lack of competitiveness, butpoor cost control within the parastatal companies is also significant. Costreductions are needed, particularly in Mali, but also to a lesser extent in BurkinaFaso and Cameroon (table 11.1). These cost reductions seem unlikely to comewithout fundamental change in the systems. To accomplish change, policymakers and stakeholders should look at the full range of options, both institutionaland technological, at field, ginning, and cotton seed processing levels. Amajor lesson since 2000 is that the producer price cannot be treated any longeras the main mechanism for ensuring good returns to farmers without jeopardizingthe sector’s financial sustainability.Competitive sectors are cost-efficient and pay attractive prices to farmers,but their inability to provide input credit and extension or to raise qualitylimits their likely contribution to poverty reduction as long as input andCONCLUSIONS 163