Time for Growth - Cotton

The African Growth and Opportunity Act (AGOA) came into being in May 2000. An initiative of the US Government, the "Act offers tangible incentives for African countries to continue their efforts to open their economies and build free markets."

Since the enactment of the Act, a US-Sub-Saharan Africa Trade and Economic Cooperation Forum has been organized annually as "an essential element of the African Growth and Opportunity Act, through which representatives from the governments, the private sector and the civil society of the United States and AGOA-eligible countries are brought together to discuss ways and means to increase trade and investment between the United States and sub-Saharan Africa."

The 6th edition of the AGOA Forum would take place in Accra from Wednesday July 18 to Thursday July 19 2007. It has the grand theme of: "AS TRADE GROWS, AFRICA PROSPERS: OPTIMISING THE BENEFITS UNDER AGOA" The theme's focus is how to "encourage countries to diversify their exports by taking advantage of the broad range of products eligible for preferential treatment under AGOA."

Currently, textiles feature quite prominently in Ghana's attempt to "diversify" into the US market. Modest inroads are being made, but much still remains to be done. This will require the total overhaul of the industry from cotton farming to the finished product in the form of fabrics and clothes.

About three weeks ago a "Textiles village" was commissioned to produce textiles mainly for export. Prior to that, the former Juapong Textiles was re-opened under a new corporate identity, Volta Star Limited. It is a joint partnership between the Government of Ghana and U-rich, a Chinese textiles and garments company. The "village" and the factory would eventually have to depend on very readily and affordable supply of cotton to be competitive.

Ghana has historically provided less support to the cotton sub-sector, preferring to prioritize investment in the cocoa sub-sector as the main source of foreign exchange revenue from agricultural products. The promotion of cotton production was initiated during the sixties and has shown a rather chaotic evolution during the next decades, with various changes of government policies.

Cotton production has been rather erratic in Ghana, contrary to what obtains in other countries in the ECOWAS sub-region. In these countries cotton has played a major role in developing rural populations and economies. Production figures available (2005) have revealed that Ghana could not achieve 40000 tonnes of seed-cotton, compared to more than 60000 tonnes by Burkina Faso. Ghana's cotton production accounts for less than 1% of the West and Central African production, although the country has excellent conditions for the crop's development.

The comparison between Ghana and Burkina Faso is striking; Burkina is actually producing more cotton each year (since 2004) than the total cumulated production of Ghana since 1968. The comparison between other Western and Central African countries revealed that Ghana lies far behind all cotton producing countries, even much smaller countries (Togo) or countries where the resources are far less favorable than in Ghana (Senegal).

Ghana is the only country in West and Central Africa that has not developed its cotton production and it's crucial to understanding the causes of such a situation before designing any new project aimed at revamping this industry.

Constraints to cotton production

Cotton companies are highly indebted to the Agricultural Development Bank (ADB) and therefore can no longer raise the needed credit to finance timely input supply to farmers and payment for seed cotton. Closely related to lack of credit is late delivery of inputs. Timing is critical for good cotton yield. It is estimated that everyday that planting is delayed it translates into a loss of 15kg yield.

The cotton industry in Ghana depends on third or fourth generation seeds imported from Burkina Faso, Cote d'Ivoire and Togo.

These planting materials are usually unreliable. The purchase of recent generation and good quality seed from theses same neighboring countries cannot be guaranteed and the conditions under which they are transported also contribute to the very low viability and vigor of the cotton seed.

Many farmers are deterred from growing cotton by low producer price. The producer price of seed cotton which stands at 3,000 old Ghana cedis per kilo has remained so for a number of years. This is not encouraging for farmers especially as cost of inputs has been increasing.

The cotton culture is labour intensive and especially more demanding during harvesting which is hand-picked and makes up about 60% of labour input. The weeding and thinning of cotton is equally demanding and account for about 30% of the total labour input. Farmers depend mostly on family labour and when extra hands are needed there is inadequate supply. The competition for labour between cotton and food crops is certainly a constraint to the expansion of cotton acreages as farmers usually give priority to food crops.

It is apparent that there are many areas that require urgent intervention to promote the industry. Farmers require a lot of education to value cotton production as a potential major source of income. This education can be done through the farmers own associations and Ministry of Food and Agriculture (MOFA). The farmer groups need to be strengthened at all levels. Training on group formation, dynamics and development should be an integral part of building the capacity of the farmer associations.

Regular research into farmers' livelihoods, cultural and social factors that inform and influence their behavior and attitudes as well as the economic implications of these have to be undertaken to help develop the entire industry.

All stakeholders in the industry need to be guided by strong appreciation of their interrelated roles. Conflicts in role definitions and expectation must be resolved to enhance performance. Inadequate input credit is crippling the industry. A revolving fund to support the timely provision of input for cultivation will improve yields as it will remove the delays in land preparation and planting.

However as an immediate step the government could facilitate a negotiated deal between Agricultural Development Bank and the four cotton companies which are operational to be funded to provide input credit to more farmers.

The AGOA Forum opening in Accra this week is an opportune moment for the case for cotton development in Africa to be made very strongly.

allAfrica.com: Ghana: Time for Growth - Cotton (Page 1 of 1)