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

89. It also shows how the efficiency of technical assistance can be increased when it ischanneled through a strong private sector partner.90. A secure and well-regulated local monopoly arrangement may be ideal for this purposebecause concessionaires can capture the immediate benefits of better pestmanagement or demonstrate how their farmers have benefited from lower inputcosts, while eventual retendering of concessions should provide an incentive to seeksuch outcomes. This incentive may be weaker in a national monopoly system,unless there is pressure from farmer organizations, civil society groups (concernedabout human health or environmental impacts), or politicians.91. A second technology likely to be of interest to many farmers is low-volume herbicides.These are labor saving, so the poverty impact of their introduction can bequestioned. However, as well as appealing to “larger” smallholder cotton producers,who currently rely heavily on hired labor (ESA) or animal traction with family labor(WCA) for weeding work, they might ultimately also assist poorer producers whostruggle to allocate their labor across hiring out, food crop production, and cotton,with the latter currently suffering from untimely and inadequate labor input.92. The experience of Bt cotton production by South African smallholders is instructive,in both the yield impact and rapid adoption of Bt (Thirtle et al. 2003) and inthe dependence of that success on institutional arrangements to support provisionof the relevant input on credit (Gouse 2007).93. The main emphasis in this book has been on sector types and their influence onsector performance. However, the issue of firm types is clearly linked to that of sectortypes. Arguably, for example, concentrated and local monopoly sectors can performwell in part because they allow a leading role for large companies, many ofthem affiliated with international cotton merchants. Conversely, the experiences ofZimbabwe since 2003 and Uganda since 2000 show that the presence of such firmswithin a sector is not a sufficient condition for strong performance, hence the chosenfocus of this book.94. Dominant firms have incentives to cooperate with each other in concentrated sectors,whereas in local monopolies the onus is on the regulatory body to monitorconcessionaire companies that may be reluctant to disclose information. The costsof retendering concessions may also be higher than the costs of issuing licensesunder a concentrated system and the retendering process may encourage firms toinvest more in maintaining relations with the regulator than in improving performancein their monopoly areas.95. In Côte d’Ivoire, the cotton sector has moved fairly rapidly from a local monopolysystem toward a concentrated one, even though this evolution was not planned inadvance and is partly due to the sociopolitical events that have taken place since theearly 2000s.96. Chapter 6 suggests reasons for these different approaches in the two countries.97. Savings and Credit Cooperatives (SACCOs).NOTES 211