The promotion of cotton production in Ghana which was initiated as far back as 1968 has almost 40 years down the line not seen the country playing a major role in the industry both locally and internationally.
Production has always been rather unpredictable in the country, as compared to some neighboring countries in the sub-region, where cotton plays a major role in developing the rural population.
Production has never reached 40000 tonnes. Ghana cotton production amounts for less than 1% of the West and Central African production, although the country has excellent conditions for its development.
The comparison between other West and Central African countries reveals that Ghana lies far behind all cotton producing countries, even much smaller countries like Togo or countries where the resources are far less favourable than in Ghana are ahead.
On a research trip to the three northern regions of Ghana where cotton is mostly grown ADM observed a patchy interest by farmers in the crop. One thing that keeps cropping up constantly in discussion with farmers was what they said was the low producer price of cotton. That, more than anything else, has deterred many farmers from growing cotton.
The producer price of 3,000 old Ghana cedis per kilo has remained so far a number of years
Rather paradoxically, it also came out that farmers are eager to go into cotton farming because they make a lot of income as compared to other crops, but the input price of cotton is what sometime prevents them from farming cotton.
The General Manager of Ghana Cotton Company, North Central Division, Mr. Joseph Banafoe told ADM that cotton is the only crop, the inputs of which are supplied on credit so farmers do not need capital before entering into cotton farming. Cotton is also a crop that has the potential to re-germinate in the soil.
He said the low price of lint cotton in the world market is the major problem that the cotton company is facing now.
“It is a global problem and is affecting all the cotton companies in Africa because the continent is not changing…..we need to make serious changes”, he said.
Mr. Banafoe said “financial problems” have hampered cotton business in Ghana.
The most recent figures of the 2006/2007 crop shows the trend continuing with production falling below preseason targets due to losses in yield and area.
He said the cotton price is falling on the world market but the input price to farmers in the country is always increasing.
The government, he said, would to invest in research to develop high yielding seed; that is the only way the industry can survive because the country can not change the world market price.
He said the Ghanaian cotton industry still depends on third or forth grade seeds imported from Burkina Faso, Cote’s d’ Ivoire and Togo. These planting material, he said are always unreliable and cannot be guaranteed and the conditions under which they are transported also contribute to the very low viability and vigour of the crop.
Mr. Banafoe said the seed the country is using now can produce at best 1,000 kilos per unit; while research has shown that there are seeds that can produce 2,000 to 3,000mt of cotton per unit. But unfortunately, he said those seeds have not been approved by the Ghanaian authorities.
He said the government has provided less supports to the cotton company preferring to patronize investment in other crops as the main sources of foreign exchange revenue from agricultural products.
He said there are many areas that require urgent intervention to promote the industry. Farmers require a lot of education to value cotton as a potential major source of income and farmer groups need to be strengthened at all levels.
Mr. Banafoe said regular research into farmers’ livelihoods, cultural and social factors that inform and influence their behavior and attitude as well as the economic implications would help develop the entire industry.
Commenting on the progress the company has made so far, he said the “unhealthy competition” that existed between the cotton farming companies are no more – perhaps they all now recognize that they are in a sinking boat together!.
The unhealthy competition existed because the companies that were operating were too many and they worked at the same places.
Mr. Banafoe said many companies are not operating any more which has enabled the Ghana Cotton Company to operate in a very wide environment without much intervention from other companies.
The Monitoring and Evaluation Manager, Mr. Mumuni Alhassa said the operational area of the cotton company which is divided into three divisions; North Central Division (NCD), North Eastern Division (NED) and North Western Division (NWD) are not based on political boundaries.
He said a number of losses were recorded during the season. The Cotton Company in the three northern regions last year recorded a loss of 4.87 billion cedis a little higher than that of 2001 of 4.8 billion cedis.
The seed cotton produced was 20,626,665kg (20,626.6mt). Of the total produced, NCD produced 4,230mt, NED produced 9,469,889mt and NWD produced 6,926mt. Globally grade B formed 1.8%. The goal used to be 5% grade B which has never been met.
Mr. Alhassa said the percentage is associated with the attempt to produce good quality lint and to reduce waste since poor quality would turn into losses at the ginnery. In this light NED did quite well by producing 2.4% grade B, both NCD and NED produced 1.2% grade B.
He said there had been an increase in the amount paid to farmers after deducting all input costs granted to them as loans from 5.2 billion cedis globally in 2001 to 32 billion in 2006. Seed cotton has also increased from 3,156mt to 10,005 .3mt.
Mr. Alhassa said, “It appears that cotton is the only crop that can give so much cash to farmers and their families and it is the only crop that does not need capital to start farming”.
He said the loan granted to farmers last year amounted to 32.952 billion cedis. These include cost of ploughing, fertilization and insecticide. The divisional proportions are 29% for NCD, 38% for NED and 33% for NWD.
The company’s cost of production of seed cotton was 71 billion cedis, cost of processing of the seed was 12.8 billion cedis and administration cost was 5 billion cedis. On profitability of operations NCD made losses of 3.7 billion cedis, NED 2.7 billion cedis and NWD made some profit about 290 million cedis.
Mr. Alhassa said the grand total of the lint produced was 8,222,131kg (8,222mt). The share contributed by NCD was 21%, NED 44% and NWD 35%. There has been an increase in lint production from 135.8 in 2001 to 218.7 in 2006.
The average lint per unit production for the whole company was 219.5kg/unit. The average selling price of the lint is 1,050 per metric tonne of lint.
The North Western Division of Ghana Cotton Company is the only division where the headquarters is located in the district capital. Cotton production in the NWD has been on ascendancy for the past 7years; this year for instant they have been able to maintain their 7,000 hectors of cotton and this is the highest they have had for the past 7years.
The wonder is how they were able to achieve this in view of the bad weather experienced throughout the northern regions.
The General Manager of NWD, Mr. Yaw Owusu Adoma told ADM that the Division was able to maintain the 7,000 hectors because they involved their cotton farmers in their decision making processes and direct communication with the cotton farmers association on every decision they make on production.
They also acquired enough funds from their stakeholders in supporting their farmers in land preparation and in the field of buying fuel for their tractors.
He said in 2006, price negotiation was smooth because the input prices were quite reasonable and management was able to seek for funds. Apart from that they were able to bring in some new varieties of cotton seeds from Burkina-Faso to replace the old seeds and this he said added some impetus to production.
He said NWD projected to produce about 18,000 units this year but settled on 13,000 units because of unfavourable conditions.
“Now that the rains have opened up, the farmers’ enthusiasm is high, all the inputs that they require are available in the right quantities and we hope that production will increase as compared to the past 7 years”.
He said last year they did about 10,100 units, about 5,000 hectors. They now have about 8,000 farmers who are operating solely on a group concept and at the end of the season they pay them by check. “This is unique for the division; we don’t pay the farmers by spot cash”, he said.
Mr. Owusu Adoma said cotton farming is an area where a lot of farmers use animal traction. He said with support from the government, stakeholders, and investors the country can compete with Togo, Benin, Cote d’ Ivoire and Burkina-Faso and make an impact on the world market.
In terms of poverty alleviation in northern Ghana – and it is accepted that the three northern regions are the poorest in the country – one way out would be the encouragement of cotton farming. Though a number of problems have been enumerated, the main players in the field are all agreed on one thing: a thriving cotton industry can greatly improve the livelihoods of people in the production areas and add substantially to the nation’s GDP.
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