The Cotton Chain and its Actors

[Agri-ProFocus]

Cotton in this discussion could be organic cotton or 'mainstream' cotton.

What do you think is hampering cotton farmers to get good income from cotton production?
What do you see as challenges for the cotton value chain as a whole taking different actors into account (producers, spinners/ginners, chain supporters, government, consumers etc)?

Karlijn van Arkel

[Agri-ProFocus]

Reply by Karlijn van Arkel on September 21, 2010 at 2:44pm

COTTON SECTOR COUNTRY STAKEHOLDERS MEETING
1. Introduction
A cotton sector country stakeholders’ meeting was convened on 13 July 2010 at the Cotton Association of Zambia, Offices, Plot 4297 Buyantanshi Road, Zamseed Premises. The meeting which was attended by the institutional Chief Executives was called to review the final report of the 2009 Agri-Profocus meeting and identify priority country activities in the cotton sector for financing in 2010.
2. Concerns in the cotton sector
i. Absence of electronic linkages among the cotton stakeholders. CAZ and OPPAZ operate independent websites which have no links to one another while CDT does not have a website.
ii. Inadequate documentation and accession of cotton production good agricultural practices (cotton GAP). The CDT and Conservation Farming Unit (CFU) are the major technological development centres for cotton GAPs. The cotton GAPs should be readily available to cotton producers soon as they are developed for adaptive research, extension and adoption as necessary.
iii. Climate variations and change are impacting negatively on cotton production and imposing serious social and economic threats to cotton producers in particular and the industry in general.
iv. The cotton sector experiences dearth of value addition infrastructure to invoke social and meaningful economic benefits at household and community levels.
v. Cotton seed cake has limited nutrient potential and applications within the livestock industry. This is associated with high levels of anti-nutrition factors and low levels of oil content in the cotton seed cake.
vi. Recognizing the fragile nature of organic cotton industry if it is not protected against contamination, the meeting resolved to embark on a joint exercise to identify suitable organic cotton production areas with natural comparative advantage in terms of soil fertility which are away from potential contaminants. Similarly, the meeting observed that facilities for organic cotton production, value addition and storage should be separate from those for conventional cotton and products.
vii. Farmer organization:
Noting the week farmer organization, the meeting resolved to focus on developing a tool kit for good organization practices which among others should include assertiveness, governance, visionary leadership, entrepreneurship, product pricing, negotiation skills, savings and credits and group dynamics and advantages.
3. Priority needs for the cotton sector
i. Investment in web based information and communications technology by undertaking the following:
• Procuring and installing ICT equipment;
• Updating and establishing of the CAZ and OPPAZ websites;
• Developing a website for CDT and linking to both CAZ and OPPAZ websites.
ii. The priority action to enhance timely availability of cotton GAPs is to co-opt CFU in the cotton stakeholder group. Other technological development institutions for cotton GAPs will be identified for co-option into the cotton stakeholder group.
Further to this, CDT should develop cotton GAP toolkit and train trainers on use of the toolkit.
iii. The meeting resolved that CDT should, in addition to their current research undertakings, embark on climate change focused research as a response strategy to climate change. CDT should also consider enhancing organic cotton research with respect to soil fertility management, biological pest control, variety development and bio-dynamics.
iv. The meeting resolved to consider investing in small scale value addition equipment at community level as a means of sparking diversification into other value chains. The meeting observed that value addition at community level could significantly contribute to wealthy creation and progression of households into middle income class. The meeting identified baby gins, oil expression and particle board manufacturing equipment as some of the needed investments.
v. To support the investments it was resolved that a Social Scientist be recruited at CDT to work in collaboration with OPPAZ and CAZ to assess the social and economic viability of value addition activities at community level and recommend the most viable addition activities.
vi. It was resolved that CDT should embark on variety development research for increased nutrition value of cotton seed by reducing the content of gossypol and increasing the content of oil while maintaining or improving the quality of lint.
In view of the stated concerns and identified priority issues the country stakeholders have since developed an action plan for budgetary and technical support from the Agri-Profocus partners. The content of the plan were discussed with Cordaid and Agri-Profocus on 5 August 2010. Later on the issues of information technology and exchange were discussed with International Institute for Communication Development.

 

Reply by Sikota Muletamboo on October 25, 2010 at 1:35pm

Cotton is an export crop predominantly being grown by smallholder farmers and supports more than 2 million people in Zambia.

The following are the major issues which I see as challenges hampering income growth in the sector;
1. Seed cotton yields are low 650kg/ha, when they can be as high as 1000kg/ha.

2. Value addittion is seen as a preserve for the Ginning Companies, and this has helped the Multinationals to wield alot of power while increasing dependence of the smallholder farmers on the ginners for production finance.

3. Arising from 2 above the Cotton Production arrangements betweenn the farmers and the Ginning Companies are lopesided against the producers; they thus have no capacity to negotiate the contracts.

4. Market Information (for both inputs and outputs) is not accessed by the producers.

5. Issues of gender and HIV/AIDS need to be mainstreamed in the technologies for production where 80% of production work is carried out by women.

From the foregoing, it goes without saying that there is need to normalise the Value Chain by having the producers to source their own inputs in the production process for all the other actors to be able to even determine the areas of improvement in their segment of the chain. Market Information can and will be provided to the producers through the Cotton Association of Zambia. Before this is addressed, the cotton sector in the country will remain depressed.

[Christel Schiphorst]

Reply by Sikota Muletamboo, on 17 June 2011

I think Cotton farmers have 2 main reasons attributable to them not getting  a good income from their farming enterprise;

 

1. Extremely and persistent production per unit area; +/- 400kg/ ha.(versus a potential of 1,500kg/ha).

2. lower prices relative to their peers in the whole of Sub-Saharan Africa (in terms of percentage of the World Lint prices every year). Only Mozambique is comparable to the Zambian situation.

 

The major issues I see as causing this problem as per player in the Value Chain are as follows;

 

a) Planting Seed varieties in circulation (F135, Chureza, CA),have been for more than 15-20 years. they were supposed to have been replaced with new varueties atmost when they were 10years old. My opinion is that they have outlived their vigor and thus productio potential. Variety development is not keeping pace with the need. I wish the Coton Development Trust could be more Multi-Stakeholder driven including farmer demand in that area would help adoption of new varieties.

 

b) The Strategic Lock-In by Ginners holding all the power over the Cotton Market by authority of Seed Loans also is helping compromise Producers' bargaining power.So called Independent Farmers (without a production loan from any Outgrower) are not encouraged, infact they are actively frustrated to the extent of losing their whole crop if not careful. As debtors the farmers always bargain from a weaker positon as prices are set each season. The Cotton Association of Zambia could play a bigger role in ensuring that the farmers are educated on that and that they get all the information they need to make decisions the whole season especially the Prices.

 

c) Volumes of Cotton Lint we produce as a Country also compromise our bargaining power on the World Market. This spirals back and is passed on to the farmers as the Ginners continously strive to maintain and improve on their efficiencies of production and ultimately competititveness. There is need to quicly look at the Policy Framework governing the introduction of new variety technologies especially the Genetically Modified Seed. That would improve our Terms Of Trade in Cotton atleast three times over the Long run(before we talk of the Multiplier effects attributable) by improving the production per unit area 6 times( to 3,000kg/ha).

 

d) Other Value Chain players such as Pesticide Traders, Farm Shops, Trasporters, etc, are developing at a faster rate and are in all the productive regions of the country. They can supply all the farmers needs in terms of Pesticides and Sprayers and would thus release the Ginners to their Core Competences which are to Gin and export. This would also swing some value to the Producers as they would shop and bargan for their needs.