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

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Figure 1.2 Major SSA Cotton Producers (thousands of tons of lint, 2004–08average)Burkina FasoMaliBeninZimbabweTanzaniaCôte d’IvoireCameroonNigeriaChadZambiaTogoMozambiqueMalawiUgandaEthiopiaSenegalothers0 50 100 150 200 250 300annual lint production (thousand tons)Source: ICAC.Note: The list includes countries producing more than 20,000 tons of lint. Dark color denotescountries covered in this study.poverty reduction, into the differential effects of pricing policies, and into thenature and scope of the productivity challenges the sector faces.The term “reform” is widely used but seldom defined in development literature.This book understands reform to be consciously chosen change in thefundamental organization of a sector and related changes in the “rules of thegame” under which stakeholders operate. Under this definition, every countryin ESA reformed its cotton sector in the early to mid-1990s, either eliminatingsingle-channel parastatals (Zambia and Zimbabwe) or privatizing cooperativeginners (Uganda and Tanzania). 10 In the sample WCA countries, only Beninand, to a lesser degree, Burkina Faso have reformed their cotton sectors underthis definition. 11Yet a key theme that emerges from this research is that reform is not simplya movement from one stable set of rules of the game to another stable set. Thereforms of the 1990s in ESA have been followed by continuous and sometimesdramatic change in every country. Even countries in WCA that have notreformed under this definition have effected substantial incremental change inthe ways in which they carry out critical sector activities. An important contributionof this research is showing how the details of institutional design matter,providing a rich sense of the diversity of approaches that have emerged to dealwith common challenges, and providing insight into the factors that influencewhich approach might be chosen under different circumstances.The report is organized in five sections. The next chapter in section I presentskey elements of the current world market setting. Section II provides historicalbackground, outlines the typology of cotton sectors used to form8 DAVID TSCHIRLEY
hypotheses about sector performance, and presents a conceptual frameworkfor analyzing sector organization and linking it to outcomes.Sections III and IV provide a detailed comparative description and performanceassessment of nine systems around a set of key themes. Section IIIfocuses on processes, functions, and services that are most directly under thecontrol of cotton companies:■■■■■pricing systems and prices paid to farmers,institutional arrangements for input credit and extension,quality control and lint marketing strategies,valorization of cotton seed by-products, andinstitutional arrangements for research.Section IV assesses overall performance of the different sectors of the studysample on the basis of outcome indicators that have a bearing on the sector’s contributionto national growth and poverty reduction objectives. These indicatorsinclude yield performance and returns to farmers, competitiveness at ginninglevel, value addition, and macro-level impacts.Section V closes by summarizing performance across countries and sectortypes and suggesting key issues to be taken into account in policy discussionsregarding continued efforts to strengthen cotton sectors in the continent.INTRODUCTION 9
Page 1: AGRICULTURE AND RURAL DEVELOPMENTOr
Page 4 and 5: AGRICULTURE AND RURAL DEVELOPMENTSe
Page 6 and 7: © 2009 The International Bank for
Page 8 and 9: Section II. Historical Background a
Page 11 and 12: BOXES, FIGURES, AND TABLESBoxes2.1
Page 13: 5.2 Summary of Pricing Mechanisms i
Page 16 and 17: eference are limited to neighboring
Page 19 and 20: ACKNOWLEDGMENTSThis study was carri
Page 21 and 22: ABBREVIATIONS¢ U.S. centACPAgricul
Page 23: US$U shWAEMUWCAWTOU.S. dollarUganda
Page 26 and 27: output markets, improving productiv
Page 28 and 29: etween these competing needs, provi
Page 30 and 31: ■■■■■competition increase
Page 32 and 33: monopolies range from 0.98 to 1.15,
Page 34 and 35: macroeconomics, developments in com
Page 36 and 37: central body and that the state nee
Page 39 and 40: CHAPTER ONEIntroductionDavid Tschir
Page 41 and 42: The debate about how to deal with t
Page 43: Figure 1.1 Map of Africa Highlighti
Page 48 and 49: to reach 25 million tons of lint in
Page 50 and 51: cotton production was introduced in
Page 52 and 53: Figure 2.2 Nominal Cotton Prices (U
Page 54 and 55: Box 2.1 (Continued)Togo, 39 percent
Page 56 and 57: Box 2.2 Cotton SubsidiesCotton subs
Page 58 and 59: efers specifically to the presence
Page 60 and 61: picking, storage, handling, or tran
Page 62 and 63: national monopoly (state-owned or p
Page 65: SECTION TWOHistorical Background an
Page 68 and 69: shares belonging to governments, an
Page 70 and 71: Changes Made Since the End of the 1
Page 72 and 73: long-term development strategies, (
Page 74 and 75: possible link between price-setting
Page 76 and 77: production fell further, to lows of
Page 78 and 79: all aspects of the chain from input
Page 80 and 81: suggestions (a) of establishing fas
Page 82 and 83: Figure 4.1 Decision Tree for Cotton
Page 84 and 85: Figure 4.2 African Cotton Sector Ty
Page 86 and 87: Box 4.1 Is This Typology Specific t
Page 88 and 89: 52Table 4.1 Trading Off: Strengths
Page 90 and 91: CONCEPTUALIZATION OF THE LINKS BETW
Page 92 and 93: chosen in this book and the impact
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Table 4.3 Expected Performance alon
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Box 4.2 (Continued)Second, farmers
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SECTION THREEComparative Analysis:C
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PRICING MECHANISMS IN WCAPricing me
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efore planting, price risk in the s
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Table 5.3 Summary of Producer Share
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Finally, FOT price shares in WCA ro
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MALI AND CAMEROON: GOVERNMENT MONOP
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Significant in Mozambique, the comp
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Zimbabwe transitioned during the 19
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Box 6.1 (Continued)A move from a co
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82Table 6.1 Summary of Input Supply
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84Table 6.1 (Continued)IndicatorsCo
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CHAPTER SEVENQuality ControlGérald
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Tanzania Competitive 1 2 Very lax n
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Figure 7.1 Estimated Premium for To
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all fiber coming from Africa—are
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Box 7.1 (Continued)newly liberalize
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CHAPTER EIGHTValorization of SeedCo
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competitive market in some of the o
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a few years, it indicates that some
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should eventually make a difference
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CHAPTER NINECotton ResearchDuncan B
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With regard to human and financial
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■■■Be involved in setting res
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made royalty payments to CRI. When
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and to identify complementary inves
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CHAPTER TENYields and Returns toFar
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fact that 55 percent of cotton is p
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Yields by Farmer TypeTo assess perf
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Factors beyond company services als
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Table 10.1 Summary Crop Budgets by
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According to the focus group inform
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Figure 10.6 Net Margins after All C
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All other variables in the budgets
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Table 10.2Summary of Average Yield
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■■■■impression is given tha
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were based on a 2005 cotton farmer
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more recent data are not available
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Figure 11.1 Estimated Average Ginni
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to buy seed cotton immediately afte
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146Table 11.3 Overall Competitivene
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148Table 11.4 Total Value Added per
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Figure 11.3 Total Value Added per c
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CHAPTER TWELVEConclusionsPatrick La
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Table 12.1 Summary of Expected and
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Valorization ofby-productsValue of
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Macro impact■ Total value addedpe
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across concession zones, with newer
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high yields. However, a mixed pictu
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governance and regulatory structure
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against price and exchange rate ris
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Improvements in the Delivery of Ext
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esistant, “stacked” genes), and
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Just as improved sector management
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More-competitive systems are perhap
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■■■■Interprofessional commi
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were to occur, it would most likely
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APPENDIX AStatistical Tables181
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1989/90 43 111 383 40.7 95 0.491990
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1989/90 62 150 416 41.0 95 0.671990
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1989/90 43 89 482 41.3 95 0.651990/
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1989/90 99 189 521 42.8 85 0.541990
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1997/98 31 327 95 33 to 35 2,950 83
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1994/95 82 344 238 33 207.0 40.0119
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Table A8 ZambiaSeasonLint productio
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Table A9 ZimbabweSeasonLint product
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Table A10 Ginning and FOB-to-CIF Co
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1997/98 1.64 598 210 75 49 74 7.619
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1987/88 17,609 31,238 564 414 911 4
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206 NOTES11. Important cotton secto
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208 NOTES47. Benin is not included
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210 NOTES79. In Zimbabwe and Zambia
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BIBLIOGRAPHYBadiane, Ousmane, Dhane
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and Instability, ed. A. Sarris and
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World Bank. 2007. Strategies for Co
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CFA exchange rate, 17-18b, 19fcompa
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input credit and extension in, 77-8
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firm types, 211n93fixed prices, for
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productivity, 119, 121f, 205n8,209n
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key indicators, 56-58, 57-58t,155-5
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focus group discussions by farmerty
Page 268 and 269:
technology transfer, 170-71by typol
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ECO-AUDITEnvironmental Benefits Sta
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