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

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CHAPTER TWOMarket ContextJohn Baffes and Gérald EsturAfrican cotton producers are becoming more and more aware that theyoperate in an increasingly integrated and quickly changing globalmarket. Any analysis of the evolution and performance of cotton sectorsin Sub-Saharan Africa (SSA) must, therefore, be put in this context andmust take into account the market dynamics and their implications for theentire supply chain, back to farm level.This chapter aims to set the stage by providing a strategic overview of themain characteristics of this market. First, the key trends in global supply anddemand are presented and discussed. A short analysis follows of price trendsand price determinants, particularly with regard to external factors affectinginternational prices of cotton lint and its by-products, including exchangerate fluctuations and market distortions created by subsidies in some majorexporting countries. Specific attention is given to critical factors influencingthe demand for cotton lint, such as quality and marketing strategies. The chaptercloses with an overview of the market for cottonseed by-products, anincreasingly important element of valorization of raw cotton for farmers andfor the national economies.THE SUPPLY SIDE: EXPANDING PRODUCTIONAND EXPORTSAbout three-quarters of cotton is produced by developing countries. Since1960, world cotton production has grown at an annual rate of almost 2 percent11
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 and 44: Figure 1.1 Map of Africa Highlighti
Page 45: hypotheses about sector performance
Page 49 and 50: Table 2.1 Global Balance of the Cot
Page 51 and 52: Figure 2.1 Real Agricultural Price
Page 53 and 54: the CFA franc, particularly critica
Page 55 and 56: Figure 2.3 Real Exchange Rate for I
Page 57 and 58: ecame a contentious issue during th
Page 59 and 60: Table 2.2 Fiber Properties of the C
Page 61 and 62: from SSA is handled by independent
Page 63: Table 2.3 Summary of Indicators of
Page 67 and 68: CHAPTER THREEHistorical Background
Page 69 and 70: targets for the cotton companies, b
Page 71 and 72: to farmer associations and their un
Page 73 and 74: Evolution of Producer Pricing Mecha
Page 75 and 76: 1970s. Until the mid-1950s, the Uga
Page 77 and 78: with the introduction of a credit s
Page 79 and 80: and lint. Liberalization accelerate
Page 81 and 82: CHAPTER FOURA Typology of AfricanCo
Page 83 and 84: the price mechanism. Coordination a
Page 85 and 86: efficiency and costs of coordinatio
Page 87 and 88: Box 4.1 (Continued)international co
Page 89 and 90: expansion for an attractive seed co
Page 91 and 92: Figure 4.3 Linking Cotton Sector Or
Page 93 and 94: Table 4.2 Key Indicators of Cotton
Page 95 and 96: Box 4.2 Factors in Addition to Stru
Page 97:
sectors outside Africa, farmers own
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CHAPTER FIVEPricing Systems and Pri
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Table 5.1 Summary of Pricing Mechan
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Table 5.2 Summary of Pricing Mechan
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are paying farmers compared with wh
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CHAPTER SIXInput Credit and Extensi
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in its operations. One example is t
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zones, prohibited movement of seed
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Despite the financial strength and
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Box 6.1 (Continued)This analysis su
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involvement offarmerorganizationsto
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farmers, and balanced involvement o
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88Table 7.1 Summary Information on
Page 126 and 127:
IMPACT OF QUALITY ON EXPORT PRICESC
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Figure 7.2 Estimated Premium Weight
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Box 7.1 Why Is Quality Management S
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20-25 percent in the late 1990s) an
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98Table 8.1 Cotton Seed Production
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In Tanzania, the first private oil
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group). This degree of variation ca
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Globally, changes in institutional
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may not be able to solve the underl
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Table 9.1 Number of Varietal Releas
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varieties developed for similar agr
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een slow to allow private ginners t
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SECTION FOURComparative Analysis:Ou
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trends in global and regional conte
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cropping season, seed cotton yields
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own their own animals and plows can
Page 160 and 161:
124Table 10.1 Summary Crop Budgets
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126Table 10.1 (Continued)Budget ele
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The reasons that inorganic fertiliz
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Figure 10.7 Weighted Average Return
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An important lesson from this analy
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ANNEX A10. METHODOLOGY FOR FOCUS GR
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■■works by companies agreeing o
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CHAPTER ELEVENCost Efficiency ofCom
Page 177 and 178:
Table 11.1 Comparative Analysis of
Page 179 and 180:
Table 11.2 Company Performance Indi
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y the hybrid regulatory structure,
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WCA than in ESA (US$0.025 to US$0.0
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Deduction for pricepaid to farmer/k
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Table 11.5 Net per Capita Budgetary
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This final chapter summarizes the s
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156Table 12.1 (Continued)Type of in
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158Table 12.1 (Continued)Type of in
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■make the existing system work be
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Performance on Global Outcomes: The
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credit market failures, remain prom
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esearch and better production pract
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price that farmers might receive fo
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Improvements in ResearchPublicly fu
Page 208 and 209:
Improving Sustainability, Governanc
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due course, in regional markets—w
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To begin to answer that question, o
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with roller gin technology—concen
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Tanzania’s agro-ecological and po
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182Table A1 BeninSeasonLint product
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184Table A2 Burkina FasoSeasonLint
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186Table A3 CameroonSeasonLint prod
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188Table A4 MaliSeasonLint producti
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190Table A5 MozambiqueSeasonLint pr
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192Table A6 TanzaniaSeasonLint prod
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194Table A7 UgandaYearLint producti
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196Table A8 (continued) ZambiaSeaso
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198Table A9 (continued) ZimbabweSea
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200Table A10 (continued)FOB-to-CIF
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202Table A11 Cotton Production, Are
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NOTES1. FAOSTAT for total agricultu
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27. In some countries, seeds are so
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contribution to GDP. Growth in agri
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89. It also shows how the efficienc
Page 250 and 251:
Chaudhry, Rafiq. 2007. “Outlook f
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Poulton, C., and B. Hanyani-Mlambo.
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INDEXBoxes, figures, notes, and tab
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ChadCFA exchange rate, 17-18bprivat
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Cottrade, 100-101, 100bcredit. See
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in concentrated market systems,77-8
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seed export market, 207n28statistic
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ed bollworm, 40reform of SSA cotton
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esearch and, 108-11returns to farme
Page 269 and 270:
quality control in, 89t, 90, 92, 94
Page 272:
Cotton is a rare economic success s
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