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

governance and regulatory structures and management systems. Some of theactions discussed next could be usefully tackled at a regional level, as well asnationally, and may benefit from donor support.Achieving Greater ValueEfforts to achieve greater value in SSA cotton sectors should focus on three priorityareas: quality, marketing, and valorization of by-products.QualityAfrican cotton has two potential competitive advantages in the world market:the intrinsic quality of its fiber (the fiber properties) and the fact that it ishandpicked. Quality improvement—especially the elimination of contamination—couldresult in selling prices of up to US$0.10 per pound above the CotlookA Index. At typical producer prices of US$0.25–US$0.32 per kg, a US$0.10per lb increase in the price of lint that is fully passed on to farmers wouldincrease farmer prices by 30 to 40 percent. As a result, quality managementshould be considered one of the most important areas of improvement for SSAcotton exporting countries.Though most African cotton is suitable for the medium-high level of ringspinning, progress on quality since the mid-1990s has generally been disappointingand certainly not improving as fast as required by the spinning industry.The trend in spinning technology toward more automation and higherspeeds makes improvements in quality and consistency a vital issue for thefuture of African cotton. Yet the quality reputation of many African lints hasbeen eroded, primarily by contamination from foreign matter. Meanwhile, theimpact of quality on cotton pricing is not fully understood by producers, evenby some smaller ginners.Greater awareness may be necessary to reestablish Africa’s main comparativeadvantage stemming from the manual harvesting of seed cotton. However,Zimbabwe’s experience since 2003 clearly illustrates that awareness alone is notenough. The Zimbabwe cotton sector enjoyed a strong quality reputation oninternational markets, which the dominant firms were keen to maintain, andfarmers were disciplined in grading their seed cotton before sale. However,when new entrants began offering flat-rate prices irrespective of quality in2003, farmer behavior changed within a season, and the average quality of seedcotton delivered to buying points plummeted. Indeed, a central insight fromthis study is that sector structure has an impact on both the incentives that ginnershave to produce high quality lint and on their ability to control their supplychain to achieve it. Technical solutions to eliminate contamination are wellknown, but some form of coordination across firms is necessary if such solutionsare to be implemented effectively. 85Quality improvement in SSA requires a concerted effort from researchers,farmers, and ginners if they are to improve fiber characteristics throughCONCLUSIONS 165