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

Improving Sustainability, Governance, and Managementof Cotton SectorsThe financial sustainability of cotton sectors is very much linked to sectororganization. The traditional single-channel systems of WCA (especiallyBenin, Burkina Faso, and Mali) have experienced severe and recurrent financialcrises, as much a result of the lack of adjustment capacities of these systemsas of world cotton price fluctuations and changes in the dollar–euro exchangerate. By contrast, competitive and concentrated systems in ESA have beenoperating without requiring public subsidies or creating fiscal liabilities sincethe liberalization of these sectors in the early 1990s. In WCA, more realisticprice-setting mechanisms, improved risk management techniques, and newmarketing strategies can help mitigate such financial problems in the future.However, greater adaptability is also likely to require a change in business cultureand attitudes within the cotton chain, which may come only from greaterinvolvement of the private sector through the entry of national and internationalprofessional operators with long-term commitments to improving sectorperformance. Examples of areas in which business culture and attitudes(among companies and farmers) could usefully change include quality controland input access, with an evolution from farmers’ rights and state provisiontoward commercial transactions. For input access, this change would mean amovement toward differential input access according to a farmer’s ability tomake productive use of input, in contrast to the current standardized provisionirrespective of production capability.Improving sector management and governance should be high on the agendaof all African cotton sectors, although specific governance needs vary by sectortype. In monopoly systems (and perhaps in concentrated systems in the future)building interprofessional committees that can effectively and wisely performtheir price-setting and other tasks, is a high priority. Specifically in local monopolysystems, definition and enforcement of clear rules for evaluating andretendering concession areas (that is, not just for allocating them initially) is akey task. Mozambique’s failure to retender concessions after almost 20 years ofprivate sector involvement lies at the root of its disappointing performance inmany areas. In concentrated systems, similar priority should be attached to thedevelopment and implementation of licensing criteria that set out clearly thecapabilities and conduct required if a firm is to participate in the sector. In Zimbabwe,draft regulations of this nature have awaited official ratification for fouryears. Meanwhile, in competitive sectors the need for the government to workwith stakeholders to play a central coordinating role to ensure that farmerscan access input and technical advice carries with it the requirement that such arole be performed as efficiently and transparently as possible, taking into accountthe views of all main stakeholder groups. Finally, as already noted, reform of themanagement and governance of research organizations to make them moreresponsive to other stakeholders is a priority in almost all sectors.172 LABASTE, POULTON, AND TSCHIRLEY