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

esistant, “stacked” genes), and more will certainly be developed. Bt cotton hasundoubtedly been a major source of yield gains in cotton in India (much of itrainfed) since 2000. Although there are technical, organizational, and publicpolicy challenges that need to be addressed if Bt cotton is to be introduced intoAfrican cotton systems, there is every reason to believe that Bt cotton varietieswould generate significant productivity gains in African countries where pestcontrol is poor and that they should be able to reduce marginal productioncosts where chemical input use is higher and pest control is more effective. 92The key factor influencing profitability in both cases would be the licensing feethat has to be paid for the technology. Among the countries studied here, currentlyonly Burkina Faso has completed testing of Bt cotton varieties. (Thecountry is now in the negotiation phase with Monsanto over patent issues,including licensing fees.) Most African countries have yet to begin testing Btcotton varieties to evaluate the potential gains, and some even have a moratoriumon such testing. Clearly, there needs to be a public debate in many countries beforeBt cotton can be commercially released. However, there are important technicalsteps to be taken, including the development of biosafety assessment procedures(where lacking) and the equipping of laboratories, plus breeding work toincorporate the Bt gene into locally adapted cotton varieties. There may beregional economies of scale in aspects of this work, hence the World Bankbiosafety project now being implemented in several WCA countries; furtherassistance from international agencies could be useful in this area.Efficiency o f Ginning IndustriesThe efficiency of ginning industries is critical to the competitiveness and sustainabilityof the sector overall. In competitive and concentrated systems, companiesdemonstrate significantly lower operating and overhead costs than inmonopoly systems. In national or local monopolies, there are too few incentivesto improve performance and efficiency of operations and to reduce costs.Achieving significant productivity gains at this level may imply structuralchanges well beyond the usual—and so far fairly unproductive—pressure puton these monopolies:■■Reducing the costs of ginning and other postharvest activities may entailrevisiting policies on (a) the choice of technology (for ginning and cottonseed processing), (b) the size of the industrial units, (c) the fiscal incentivesto minimize investment costs by allowing secondhand equipment to beimported, and the (d) profile of strategic investors. As mentioned previously,these factors are strongly linked to the sector’s organizational model.Helping develop real cotton industry clusters—where related services(maintenance, transport, financial services) and input can be procured atcompetitive prices—could also contribute to improving the performanceand costs in cotton sectors.CONCLUSIONS 171