Organization and Performance of Cotton Sectors in Africa ... - infoDev
Organization and Performance of Cotton Sectors in Africa ... - infoDev
Organization and Performance of Cotton Sectors in Africa ... - infoDev
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etween 2001 <strong>and</strong> 2003, equal to about 60 percent <strong>of</strong> the national gross domesticproduct (GDP) <strong>of</strong> both Burk<strong>in</strong>a Faso <strong>and</strong> Mali.Formal compla<strong>in</strong>ts under the World Trade <strong>Organization</strong> (WTO) aboutthese subsidies began <strong>in</strong> 2003 with Brazil, which challenged U.S. subsidies <strong>and</strong>won its case <strong>in</strong> 2004. Also <strong>in</strong> 2003, Burk<strong>in</strong>a Faso presented the WTO with a cottonproposal on behalf <strong>of</strong> itself, Ben<strong>in</strong>, Chad, <strong>and</strong> Mali call<strong>in</strong>g for the eventualelim<strong>in</strong>ation <strong>of</strong> all developed-country cotton subsidies, coupled with f<strong>in</strong>ancialcompensation for cotton farmers <strong>in</strong> develop<strong>in</strong>g countries. With<strong>in</strong> <strong>Africa</strong>, publicdebate about subsidies has focused almost entirely on these four West <strong>Africa</strong>ncountries, know as the “C4” (<strong>Cotton</strong>-4).Predat<strong>in</strong>g this trade <strong>and</strong> subsidies debate has been another debate, now last<strong>in</strong>gmore than two decades, on whether the highly <strong>in</strong>tegrated approach to cottonsupply cha<strong>in</strong> development <strong>in</strong> countries <strong>of</strong> West <strong>and</strong> Central <strong>Africa</strong> (WCA)needed to be reformed. The WCA approach, which typically featured “s<strong>in</strong>glechannel”systems built around public monopoly cotton companies, has driventremendous growth <strong>in</strong> cotton production <strong>in</strong> the region; the International <strong>Cotton</strong>Advisory Council (ICAC) data <strong>in</strong>dicate that total l<strong>in</strong>t production <strong>in</strong> theCommunauté française d’Afrique (CFA) Franc Zone rose from 50,000 tons <strong>in</strong>1960 to about 220,000 tons <strong>in</strong> 1980, to an average <strong>of</strong> about 1.1 million tons <strong>in</strong>2004 <strong>and</strong> 2005. The crop has also played a major role <strong>in</strong> rural development,facilitat<strong>in</strong>g <strong>in</strong>put supply for other crops <strong>in</strong> cotton zones <strong>and</strong> help<strong>in</strong>g farmers <strong>in</strong>vest<strong>in</strong> animal traction <strong>and</strong> other equipment that improved overall farm productivity<strong>and</strong> <strong>in</strong>comes.However, these s<strong>in</strong>gle-channel systems have also suffered from serious<strong>and</strong> perhaps grow<strong>in</strong>g problems. Dur<strong>in</strong>g the years immediately follow<strong>in</strong>g thedevaluation <strong>of</strong> the CFA franc <strong>in</strong> 1994 (Pursell 1999; Badiane et al. 2002),cotton sectors <strong>in</strong> WCA were seen to pay lower prices to farmers than sectorswith more competitive arrangements. Many studies commented on the stagnation<strong>of</strong> WCA farm yields start<strong>in</strong>g about 1990, although these yieldsrema<strong>in</strong>ed higher than <strong>in</strong> most other areas <strong>of</strong> <strong>Africa</strong>. The parastatal g<strong>in</strong>n<strong>in</strong>gcompanies were also seen to be <strong>in</strong>creas<strong>in</strong>gly <strong>in</strong>efficient <strong>and</strong> opaque <strong>in</strong> theiroperations (Pursell 1999; Badiane et al. 2002; World Bank 2007). In Mali,farmers boycotted the crop <strong>in</strong> 2000/01 because <strong>of</strong> low prices <strong>and</strong> perceivedcorruption with<strong>in</strong> Compagnie Malienne de Développement des Fibres Textiles(CMDT), <strong>and</strong> top managers <strong>in</strong> CMDT were eventually sent to jail forf<strong>in</strong>ancial mismanagement.In a world market where real prices have fallen by about half s<strong>in</strong>ce 1980, 2the problems described above can threaten the survival <strong>of</strong> cotton production,process<strong>in</strong>g, <strong>and</strong> trade. These concerns have come acutely to the fore s<strong>in</strong>ce thebeg<strong>in</strong>n<strong>in</strong>g <strong>of</strong> the 2000s, as high prices to farmers, comb<strong>in</strong>ed with high operat<strong>in</strong>gcosts <strong>of</strong> the g<strong>in</strong>n<strong>in</strong>g companies <strong>and</strong> stagnant farm yields, have led to massivesectoral deficits <strong>in</strong> most countries. In Burk<strong>in</strong>a Faso <strong>and</strong> perhaps other countries,these deficits threaten nationwide macroeconomic stability. Meanwhile,farmers cont<strong>in</strong>ue to compla<strong>in</strong> that the prices they receive are too low.4 DAVID TSCHIRLEY