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

esearch and better production practices, reduce variability of lint qualitythrough more rigorous seed cotton grading and lint classification, control contaminationthrough capacity building and price incentives, and optimize qualitymanagement in ginning. Efforts must also be made to generalize the use ofcotton cloth wrappers for bales and, ultimately, to develop container loading atthe gins and optimize export logistics.However, the typology developed in chapter 4 highlights a key conundrumin African cotton systems: while concentrated (and perhaps monopoly) sectorsare more likely to achieve the coordination needed to improve quality,they are not necessarily ready to pass the resulting price premiums on tofarmers. For example, the comparative analysis in previous chapters showedthat farmers in Tanzania have received slightly higher prices than did farmersin Zambia, despite the much higher price premium in Zambia. Solvingthis riddle—how to capture the very significant price premiums available toAfrican cotton while sharing some of that benefit with farmers—probablyrequires much stronger farmer organizations than are currently found inSSA. In concentrated systems, these organizations would have to bargainwith the large ginners for remunerative prices on the basis of solid knowledgeof world prices, realized export prices, quality premiums obtained, andcost structure borne by ginners. In competitive systems, these organizationswould need to focus on training farmers about the benefits of increasedquality, and on monitoring prices paid by companies to ensure transmissionof quality premiums. 86Marketing PracticesDiscussion in chapters 2 and 7 highlighted the fact that African cotton sectorscommonly lose revenue from weaknesses in lint marketing, not just lint quality.Some weaknesses are largely beyond the control of the cotton sector, especiallywhere a landlocked country relies on the export infrastructure of a neighbor.African port facilities are often inefficient and shipping unreliable, while thepoor state of national road networks contributes to high internal transport costsand delays. As a major export industry in many African countries, the cottonsector should be lobbying hard for improved infrastructure. This area may alsobe one where international development finance can assist.African sectors are also progressing slowly with the introduction of highvolume instrument testing of lint. Use of instrument testing on a bale-by-balebasis requires purchasing the expensive equipment, training scientists, andequipping laboratories to provide reliable results from such equipment underAfrican conditions. Introduction of this equipment will require increasedinternational technical assistance beyond current levels.With regard to marketing practice at firm level, cotton ginning companiesaffiliated with international merchants (referred to in this book as “affiliated ginners”)have better access to market information and also benefit from hedging166 LABASTE, POULTON, AND TSCHIRLEY