Proceedings of the Expert Group Meeting on - Islamic Development ...
Proceedings of the Expert Group Meeting on - Islamic Development ...
Proceedings of the Expert Group Meeting on - Islamic Development ...
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ISLAMIC DEVELOPMENT BANK<br />
PROCEEDINGS OF THE<br />
EXPERTS GROUP MEETING ON<br />
“ENHANCING PRODUCTION EFFICIENCY<br />
AND INTERNATIONAL COMPETITIVENESS<br />
IN IDB COTTON PRODUCING<br />
MEMBER COUNTRIES”<br />
IDB Headquarters, Jeddah<br />
12-13 Safar 1426H, (22-23 March, 2005)
© Coordinated by:<br />
Dr. Nosratollah Nafar<br />
Ec<strong>on</strong>omic Policy & Strategic Planning Department<br />
<strong>Islamic</strong> <strong>Development</strong> Bank<br />
P.O. Box. 5925, Jeddah 21432<br />
Kingdom <str<strong>on</strong>g>of</str<strong>on</strong>g> Saudi Arabia<br />
Teleph<strong>on</strong>e: 646 7435<br />
Facsimile : 646 7478<br />
E-mail : nnafar@isdb.org<br />
Home Page: http://www.isdb.org<br />
Disclaimer:<br />
The views expressed in this document are those <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
authors/speakers and do not necessarily reflect <str<strong>on</strong>g>the</str<strong>on</strong>g> views <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
<strong>Islamic</strong> <strong>Development</strong> Bank <str<strong>on</strong>g>Group</str<strong>on</strong>g> or its member countries.<br />
ii
Establishment<br />
ISLAMIC DEVELOPMENT BANK<br />
The <strong>Islamic</strong> <strong>Development</strong> Bank is an internati<strong>on</strong>al financial instituti<strong>on</strong><br />
established in pursuance <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Declarati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Intent issued by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
C<strong>on</strong>ference <str<strong>on</strong>g>of</str<strong>on</strong>g> Finance Ministers <str<strong>on</strong>g>of</str<strong>on</strong>g> Muslim Countries held in Jeddah in Dhul<br />
Q’adah 1393H, corresp<strong>on</strong>ding to December 1973. The Inaugural <str<strong>on</strong>g>Meeting</str<strong>on</strong>g> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> Board <str<strong>on</strong>g>of</str<strong>on</strong>g> Governors took place in Rajab, 1395H, corresp<strong>on</strong>ding to July<br />
1975, and <str<strong>on</strong>g>the</str<strong>on</strong>g> Bank was formally opened <strong>on</strong> 15 Shawwal 1395H,<br />
corresp<strong>on</strong>ding to 20 October 1975.<br />
Purpose<br />
The purpose <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Bank is to foster ec<strong>on</strong>omic development and social<br />
progress <str<strong>on</strong>g>of</str<strong>on</strong>g> its member countries and Muslim communities in n<strong>on</strong>-member<br />
countries individually as well as jointly in accordance with <str<strong>on</strong>g>the</str<strong>on</strong>g> principles <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Shari’ah i.e., <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>Islamic</strong> Law.<br />
Functi<strong>on</strong>s<br />
The functi<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Bank are to participate in equity capital and to grant<br />
loans for productive projects and enterprises besides providing financial<br />
assistance to member countries in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r forms for ec<strong>on</strong>omic and social<br />
development. The Bank is also required to establish and operate special funds<br />
for specific purposes, including a fund to assist Muslim communities in n<strong>on</strong>member<br />
countries, in additi<strong>on</strong> to setting up trust funds.<br />
The Bank is authorised to accept deposits and to mobilise financial resources<br />
through Shari’ah compatible modes. It is also charged with <str<strong>on</strong>g>the</str<strong>on</strong>g> resp<strong>on</strong>sibility<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> assisting in <str<strong>on</strong>g>the</str<strong>on</strong>g> promoti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> foreign trade, especially in capital goods<br />
am<strong>on</strong>g member countries; providing technical assistance to member<br />
countries, and extending training facilities to pers<strong>on</strong>nel engaged in<br />
development activities in member countries to foster compliance to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Shari’ah.<br />
Membership<br />
The present membership <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Bank c<strong>on</strong>sists <str<strong>on</strong>g>of</str<strong>on</strong>g> 56 countries. The main<br />
c<strong>on</strong>diti<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> membership are: a prospective member country should be a<br />
member <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Organizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>Islamic</strong> C<strong>on</strong>ference (OIC), pay its<br />
c<strong>on</strong>tributi<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> share capital <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Bank and be willing to accept such<br />
terms and c<strong>on</strong>diti<strong>on</strong>s as may be decided by <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB Board <str<strong>on</strong>g>of</str<strong>on</strong>g> Governors.<br />
iii
Capital<br />
Up to <str<strong>on</strong>g>the</str<strong>on</strong>g> end <str<strong>on</strong>g>of</str<strong>on</strong>g> 1412H (June 1992), <str<strong>on</strong>g>the</str<strong>on</strong>g> authorized capital <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Bank was<br />
two billi<strong>on</strong> <strong>Islamic</strong> Dinars (ID). (The value <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>Islamic</strong> Dinar, which is <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
accounting unit in <str<strong>on</strong>g>the</str<strong>on</strong>g> Bank, is equivalent to <strong>on</strong>e SDR -Special Drawing<br />
Rights- <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Internati<strong>on</strong>al M<strong>on</strong>etary Fund). Since Muharram 1413H (July<br />
1992) in accordance with a Resoluti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Board <str<strong>on</strong>g>of</str<strong>on</strong>g> Governors, it became<br />
6 billi<strong>on</strong> <strong>Islamic</strong> Dinars, divided into 600,000 shares, having a par value <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
10,000 <strong>Islamic</strong> Dinars each. Its subscribed capital also became ID 4 billi<strong>on</strong><br />
payable according to specific schedules and in freely c<strong>on</strong>vertible currency<br />
acceptable to <str<strong>on</strong>g>the</str<strong>on</strong>g> Bank. In 1422H, <str<strong>on</strong>g>the</str<strong>on</strong>g> Board <str<strong>on</strong>g>of</str<strong>on</strong>g> Governors at its Annual<br />
<str<strong>on</strong>g>Meeting</str<strong>on</strong>g> held in Algeria decided to increase <str<strong>on</strong>g>the</str<strong>on</strong>g> authorized capital <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Bank from ID 6 billi<strong>on</strong> to ID 15 billi<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> subscribed capital from ID<br />
4.1 billi<strong>on</strong> to ID 8.1 billi<strong>on</strong>.<br />
Head Office and Regi<strong>on</strong>al Offices<br />
The Bank’s principal <str<strong>on</strong>g>of</str<strong>on</strong>g>fice is located in Jeddah, Kingdom <str<strong>on</strong>g>of</str<strong>on</strong>g> Saudi Arabia.<br />
Two regi<strong>on</strong>al <str<strong>on</strong>g>of</str<strong>on</strong>g>fices were opened in 1994; <strong>on</strong>e in Rabat, Morocco, and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
o<str<strong>on</strong>g>the</str<strong>on</strong>g>r in Kuala Lumpur, Malaysia. In July 1996, <str<strong>on</strong>g>the</str<strong>on</strong>g> Board <str<strong>on</strong>g>of</str<strong>on</strong>g> Executive<br />
Directors also approved <str<strong>on</strong>g>the</str<strong>on</strong>g> establishment <str<strong>on</strong>g>of</str<strong>on</strong>g> a regi<strong>on</strong>al <str<strong>on</strong>g>of</str<strong>on</strong>g>fice at Almaty,<br />
Kazakhstan to serve as a link between IDB member countries and Central<br />
Asian Republics. The <str<strong>on</strong>g>of</str<strong>on</strong>g>fice became operati<strong>on</strong>al in July 1997 and is now a<br />
full fledged regi<strong>on</strong>al <str<strong>on</strong>g>of</str<strong>on</strong>g>fice. The Bank also has field representatives in eleven<br />
member countries which are: Ind<strong>on</strong>esia, Iran, Kazakhstan, Libya, Pakistan,<br />
Senegal, Sudan, Gambia, Guinea Bissau, Mauritania and Algeria.<br />
Financial Year<br />
The Bank’s financial year is <str<strong>on</strong>g>the</str<strong>on</strong>g> lunar Hijrah Year (H).<br />
Language<br />
The <str<strong>on</strong>g>of</str<strong>on</strong>g>ficial language <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Bank is Arabic, but English and French are<br />
additi<strong>on</strong>ally used as working languages.<br />
iv
CONTENTS<br />
Preface…………………………………………………………....................<br />
Opening Address…………………………………………….......................<br />
Dato Syed Jaafar Aznan<br />
Vice President (Trade & Policy), IDB<br />
PART ONE<br />
MAJOR CHALLENGES TO IDB COTTON-PRODUCING<br />
MEMBER COUNTRIES<br />
Enhancing Producti<strong>on</strong> Efficiency and Internati<strong>on</strong>al Competitiveness<br />
in IDB Cott<strong>on</strong>-Producing Member Countries.………….…......................<br />
Rafiq Chaudhry<br />
Executive Summary…………………………………………………...<br />
I. Introducti<strong>on</strong> and Background…………………………………………<br />
II. Major Challenges to IDB Cott<strong>on</strong>-Producing Countries………………<br />
III. Current Cott<strong>on</strong> Policies in Rich Countries and Their Effects <strong>on</strong> IDB<br />
Cott<strong>on</strong>-Producing Countries………………………………………......<br />
IV. Enhancing Efficiency and Productivity in <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Sector…………<br />
V. Enhancing Competitiveness in <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Sector…………………….<br />
VI. Role <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Private Sector in Cott<strong>on</strong>……………………………….....<br />
VII. Framework for Enhancing Cooperati<strong>on</strong> Am<strong>on</strong>g IDB Cott<strong>on</strong>-<br />
Producing Countries………………………...…………………………<br />
VIII. C<strong>on</strong>clusi<strong>on</strong>s and Recommendati<strong>on</strong>s……..…………………….......<br />
Appendix 1: Case Study <strong>on</strong> Cott<strong>on</strong> Producti<strong>on</strong> in Mali……………….........<br />
Amadou Aly Yattara<br />
Appendix 2: Enhancing Producti<strong>on</strong> Efficiency and Internati<strong>on</strong>al<br />
Competitiveness in IDB Cott<strong>on</strong>-Producing Member Countries From <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Asia Regi<strong>on</strong>………………………………………………………………….<br />
Zahoor Ahmad<br />
PART TWO<br />
COTTON PRODUCTION EFFICIENCY AND<br />
INTERNATIONAL COMPETITIVENESS<br />
COUNTRY EXPERIENCES FROM AFRICAN REGION<br />
The Cott<strong>on</strong> Sector in Burkina Faso..………………………………………<br />
Traore Seydou Naf<strong>on</strong>i<br />
I. Introducti<strong>on</strong>……………………………………………………………..<br />
II. Internati<strong>on</strong>al Situati<strong>on</strong>…………………………………………………<br />
III. Competitiveness and Vulnerability…………………………………….<br />
IV. Liberalizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Industry…………………………………………..<br />
V. Advice to Producers……………………………………………………<br />
VI. C<strong>on</strong>clusi<strong>on</strong>……………………………………………………………..<br />
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Report <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Benin Cott<strong>on</strong> Industry ……………………………………<br />
Blaise A. Fadoegn<strong>on</strong><br />
I. Cott<strong>on</strong> Cultivati<strong>on</strong> in Benin……………………………………………<br />
II. Producti<strong>on</strong>, Export and Employment in <str<strong>on</strong>g>the</str<strong>on</strong>g> Industry……………….…<br />
III. Policy <strong>on</strong> Input Supply and Distributi<strong>on</strong>…………………..…………..<br />
IV. Difficulties to Increase Cott<strong>on</strong> Produce in Benin………...…………....<br />
V. Regulati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Use <str<strong>on</strong>g>of</str<strong>on</strong>g> Genetically Modified Cott<strong>on</strong>………………..<br />
VI. Acti<strong>on</strong>s Taken by Benin Regarding Cott<strong>on</strong> at <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO……………....<br />
Sudan Cott<strong>on</strong> Research Challenges and Efficiency Enhancement……..<br />
El Fadil Abdel Rahman Babiker and Abdin Mohamed Ali El Faki<br />
I. Introducti<strong>on</strong>…………………………………………………………….<br />
II. Challenges to Cott<strong>on</strong> Producti<strong>on</strong> from Research Perspective……….....<br />
III. Framework for Cooperati<strong>on</strong> Between IDB Member Countries…..……<br />
Uganda's Country Report <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Sector..............……………….<br />
Damalie Lubwama Nabakka<br />
I. Introducti<strong>on</strong>…...………………………………………………………..<br />
II. Major Challenges Faced by Uganda…………………………………...<br />
III. Enhancing Efficiency and Competitiveness…………………………...<br />
IV. Enhancing <str<strong>on</strong>g>the</str<strong>on</strong>g> Role <str<strong>on</strong>g>of</str<strong>on</strong>g> Private Sector in <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Sector……...…….<br />
V. Proposals for Enhancing Cooperati<strong>on</strong> Am<strong>on</strong>g IDB Cott<strong>on</strong>-Producing<br />
Countries………………………………………………………………..<br />
COUNTRY EXPERIENCES FROM THE ASIAN REGION<br />
Cott<strong>on</strong> in Pakistan: an Overview……………………................................<br />
Ibad Badar Siddiqui<br />
Preamble……………………………………………………………….<br />
I. Cott<strong>on</strong> Producti<strong>on</strong> Pattern………………………………………………<br />
II. Cott<strong>on</strong> C<strong>on</strong>sumpti<strong>on</strong> Pattern……………………………………………<br />
III. Cott<strong>on</strong> Quality Improvement…………………………………………...<br />
IV. Cott<strong>on</strong> Policy at a Glance………………………………………………<br />
V. Tail Piece……………………………………………………………….<br />
Country Report: Syria……………………………………..........................<br />
Mohamed Nayef Alsalti<br />
I. Introducti<strong>on</strong>…………………………………………………………….<br />
II. Cott<strong>on</strong> Producti<strong>on</strong> Policy……………...…………………………….…<br />
III. Cott<strong>on</strong> Producti<strong>on</strong>, Area and Yield………………………….…………<br />
IV. Cultural Practices………………………………………………...…….<br />
V. Cropping System and Agr<strong>on</strong>omic Management……………………….<br />
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Cott<strong>on</strong> in Turkey: The Role <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Research Institute in<br />
<strong>Development</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong>…………………………………………………….<br />
İsa Özkan<br />
Abstract………………………………………………………..............<br />
I. Introducti<strong>on</strong>…………………………………………………………….<br />
II. Improvement in Cott<strong>on</strong>…………………………………………………<br />
III. Cott<strong>on</strong> Research Institute……………………………………………….<br />
IV. The Ways <str<strong>on</strong>g>of</str<strong>on</strong>g> Enhancing Productivity and Competitiveness in IDB<br />
Cott<strong>on</strong>-Producing Member Countries………………………………….<br />
V. C<strong>on</strong>clusi<strong>on</strong>……………………...………………………………………<br />
PART THREE<br />
ROLE OF PRODUCTIVITY INSTITUTIONS AND PRIVATE<br />
SECTION IN THE COTTON SECTOR<br />
ENHANCING THE ROLE OF NATIONAL INSTITUTIONS<br />
Productivity in Cott<strong>on</strong> Spinning: Pakistan’s Experience………………<br />
Saquib Mohyuddin and Amina Mahmood<br />
Executive Summary…………...……………………………………….<br />
I. Background…………………………………………………………….<br />
II. Objectives…………………………………………………………...…<br />
III. Outlook <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Sector in Pakistan………………………………….<br />
IV. Achieving Higher Cott<strong>on</strong> Producti<strong>on</strong> and Efficiency…………………<br />
V. Initiatives for Enhancing Productivity…………………………………<br />
VI. Cluster <strong>Development</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Weaving Sector……………………………...<br />
VII. Nati<strong>on</strong>al Initiatives…………………………………………………….<br />
VIII. Policy Recommendati<strong>on</strong>……………………………………………....<br />
IX. C<strong>on</strong>clusi<strong>on</strong>……………………………………………………………..<br />
ENHANCING THE ROLE OF PRIVATE SECTOR<br />
Enhancing <str<strong>on</strong>g>the</str<strong>on</strong>g> Role <str<strong>on</strong>g>of</str<strong>on</strong>g> Private Sector…...………………………………<br />
Masood A. Majeed<br />
I. Introducti<strong>on</strong>…………………………………………………………….<br />
II. The Role <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Private Sector…………………………………………<br />
III. Cooperati<strong>on</strong> Am<strong>on</strong>g IDB Cott<strong>on</strong>-Producing Member Countries…..….<br />
Cott<strong>on</strong> Cultivati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Mali………..……………………<br />
Mahamadou Cisse<br />
I. Quality <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Producti<strong>on</strong>………………………………………….<br />
II. The Private Sector and <str<strong>on</strong>g>the</str<strong>on</strong>g> Producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Seed………………..<br />
III. The Private Sector and Cott<strong>on</strong> Fiber Classificati<strong>on</strong>.…………………..<br />
IV. C<strong>on</strong>clusi<strong>on</strong>…………………………………………………….……….<br />
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Cott<strong>on</strong> in Turkey……...……………………………………………............<br />
Tuğrul Yemisci & Hamdi Bagci<br />
I. The Importance <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> as a Strategic Crop in Turkey……………...<br />
II. <strong>Development</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> Turkish Cott<strong>on</strong> Sector……………………………<br />
III. Subsidy Policy Being Applied in Turkey……………………………...<br />
IV. Spot Markets and Future Markets in Turkey………………..................<br />
V. Problems <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Sector in Turkey………………………………….<br />
VI. Proposals for Improving Cooperati<strong>on</strong> Am<strong>on</strong>g IDB Cott<strong>on</strong> Producing-<br />
Member Countries…………………….……………………………….<br />
PART FOUR<br />
RECOMMENDATIONS AND ACTION PLAN<br />
General Framework and Acti<strong>on</strong> Plan for Enhancing Cooperati<strong>on</strong><br />
Am<strong>on</strong>g IDB Cott<strong>on</strong>-Producing Member Countries……………………..<br />
I. Introducti<strong>on</strong>……………………………………………………………<br />
II. General Framework…………...……………………………………….<br />
III. Acti<strong>on</strong> Plan…………………………………………………………….<br />
Closing Remarks…………………………………………………………...<br />
Dato Syed Jaafar Aznan<br />
Vice President (Trade & Policy), IDB<br />
ANNEX<br />
Programme <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> <str<strong>on</strong>g>Expert</str<strong>on</strong>g> <str<strong>on</strong>g>Group</str<strong>on</strong>g> <str<strong>on</strong>g>Meeting</str<strong>on</strong>g>……………………………….<br />
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PREFACE<br />
Cott<strong>on</strong> is a major cash crop for a large number <str<strong>on</strong>g>of</str<strong>on</strong>g> member countries <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
<strong>Islamic</strong> <strong>Development</strong> Bank (IDB) and plays crucial role in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir ec<strong>on</strong>omic<br />
growth. In some cases, <str<strong>on</strong>g>the</str<strong>on</strong>g> success <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy, in general, and that <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
exports, in particular, depends almost exclusively <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> performance <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
cott<strong>on</strong> sub-sector. However, despite <str<strong>on</strong>g>the</str<strong>on</strong>g> importance <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
ec<strong>on</strong>omies, producti<strong>on</strong> efficiency and internati<strong>on</strong>al competitiveness <str<strong>on</strong>g>of</str<strong>on</strong>g> most<br />
IDB member countries in this area remain generally low and leave a lot <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
scope for fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r progress. Indeed, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is need to undertake c<strong>on</strong>siderable<br />
efforts at nati<strong>on</strong>al and multilateral levels to realize <str<strong>on</strong>g>the</str<strong>on</strong>g> potentials <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> by<br />
substantially increasing cott<strong>on</strong> producti<strong>on</strong> efficiency and competitiveness <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
member countries.<br />
Recognizing this need, <str<strong>on</strong>g>the</str<strong>on</strong>g> Bank organized an <str<strong>on</strong>g>Expert</str<strong>on</strong>g> <str<strong>on</strong>g>Group</str<strong>on</strong>g> <str<strong>on</strong>g>Meeting</str<strong>on</strong>g> (EGM)<br />
<strong>on</strong> "Enhancing Producti<strong>on</strong> Efficiency and Internati<strong>on</strong>al Competitiveness<br />
in IDB Cott<strong>on</strong>-Producing Member Countries" at its Headquarters in<br />
Jeddah, Saudi Arabia <strong>on</strong> 12-13 Safar 1426H (22-23 March 2005). The<br />
objective <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> meeting was to discuss <str<strong>on</strong>g>the</str<strong>on</strong>g> main issues and challenges faced<br />
by <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB cott<strong>on</strong>-producing member countries, propose c<strong>on</strong>crete acti<strong>on</strong>s to<br />
tackle <str<strong>on</strong>g>the</str<strong>on</strong>g>se issues, and to lay down a General Framework and Acti<strong>on</strong> Plan<br />
for enhancing cooperati<strong>on</strong> am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g>se countries. The meeting was attended<br />
by eminent experts from public and private companies and productivity<br />
centers in nine IDB member countries, namely Benin, Burkina Faso, Egypt,<br />
Mali, Pakistan, Sudan, Syria, Turkey and Uganda.<br />
The meeting underlined <str<strong>on</strong>g>the</str<strong>on</strong>g> need for <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB member countries to be ready to<br />
face <str<strong>on</strong>g>the</str<strong>on</strong>g> challenge <str<strong>on</strong>g>of</str<strong>on</strong>g> quota free textile trade. It stressed that <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong>producing<br />
member countries can greatly improve <str<strong>on</strong>g>the</str<strong>on</strong>g>ir producti<strong>on</strong> efficiency<br />
and competitiveness by learning from good practices and experiences <str<strong>on</strong>g>of</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
member countries. Discussing <str<strong>on</strong>g>the</str<strong>on</strong>g> experiences <str<strong>on</strong>g>of</str<strong>on</strong>g> member countries from<br />
both African and Asian regi<strong>on</strong>s, <str<strong>on</strong>g>the</str<strong>on</strong>g> meeting highlighted <str<strong>on</strong>g>the</str<strong>on</strong>g> comparative<br />
advantage <str<strong>on</strong>g>of</str<strong>on</strong>g> most IDB cott<strong>on</strong>-producing member countries in cott<strong>on</strong><br />
producti<strong>on</strong>. However, it was noted that “comparative advantage” is not <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
same as "competitive advantage". Competitiveness is a c<strong>on</strong>tinuous process <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
innovating, upgrading and increasing value-added activities and it relates to<br />
induced technological changes and innovati<strong>on</strong>. The EGM suggested that IDB<br />
cott<strong>on</strong>-producing member countries can enhance <str<strong>on</strong>g>the</str<strong>on</strong>g>ir cott<strong>on</strong> producti<strong>on</strong><br />
efficiency and internati<strong>on</strong>al competitiveness by learning from each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r’s<br />
experiences. In this c<strong>on</strong>text, <str<strong>on</strong>g>the</str<strong>on</strong>g> following four priority areas were identified<br />
for cooperati<strong>on</strong>: producti<strong>on</strong>, instituti<strong>on</strong>al development, marketing, and<br />
financing.<br />
On <str<strong>on</strong>g>the</str<strong>on</strong>g> subject <str<strong>on</strong>g>of</str<strong>on</strong>g> enhancing <str<strong>on</strong>g>the</str<strong>on</strong>g> role <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector and productivity<br />
instituti<strong>on</strong>s in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector, it was pointed out that <str<strong>on</strong>g>the</str<strong>on</strong>g> existing R&D<br />
ix
facilities in member countries were mostly in <str<strong>on</strong>g>the</str<strong>on</strong>g> public sector with a high<br />
share <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> budget going to administrative costs ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than to developmental<br />
activities. On <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r hand, <str<strong>on</strong>g>the</str<strong>on</strong>g> lack <str<strong>on</strong>g>of</str<strong>on</strong>g> market competiti<strong>on</strong> in farm input<br />
supply, output processing, and marketing caused poor producer incentives,<br />
inappropriate use <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs and hence inefficiency. The meeting suggested<br />
that an enabling envir<strong>on</strong>ment is necessary to increase private investments and<br />
to help cott<strong>on</strong> companies cope with internati<strong>on</strong>al competiti<strong>on</strong>. It requires a<br />
shared resp<strong>on</strong>sibility between producers, ginners, input providers and local<br />
banks to organize <str<strong>on</strong>g>the</str<strong>on</strong>g> sector and safeguard <str<strong>on</strong>g>the</str<strong>on</strong>g>ir comm<strong>on</strong> interests.<br />
On behalf <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Ec<strong>on</strong>omic Policy and Strategic Planning (EPSP)<br />
Department, I would like to thank Br. Nosratollah Nafar for coordinating <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
organizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> EGM. I would also like to thank Brs. Lamine Doghri,<br />
Aftab Ahmad Cheema and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r members <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> EPSP Department for <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
valuable c<strong>on</strong>tributi<strong>on</strong>s to <str<strong>on</strong>g>the</str<strong>on</strong>g> organizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> this event. Thanks are also due<br />
to Br. Zafar Iqbal for his technical input in <str<strong>on</strong>g>the</str<strong>on</strong>g> preparati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>se<br />
proceedings and to Brs. Mohamed Ben Aissa Amza, Syed Abdur Rahman<br />
and Musharaf Wali Khan for typing various documents <str<strong>on</strong>g>of</str<strong>on</strong>g> this meeting.<br />
As expected, <str<strong>on</strong>g>the</str<strong>on</strong>g> EGM generated useful discussi<strong>on</strong> <strong>on</strong> very pertinent issues<br />
and produced a set <str<strong>on</strong>g>of</str<strong>on</strong>g> recommendati<strong>on</strong>s to promote cott<strong>on</strong> producti<strong>on</strong><br />
efficiency and competitiveness. The IDB is publishing <str<strong>on</strong>g>the</str<strong>on</strong>g> proceedings <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
EGM in order to disseminate <str<strong>on</strong>g>the</str<strong>on</strong>g> ideas developed in various papers and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
views expressed during <str<strong>on</strong>g>the</str<strong>on</strong>g>ir presentati<strong>on</strong>s. It is hoped that this publicati<strong>on</strong><br />
will c<strong>on</strong>tribute to sensitizing <str<strong>on</strong>g>the</str<strong>on</strong>g> decisi<strong>on</strong> makers for <str<strong>on</strong>g>the</str<strong>on</strong>g> need to take c<strong>on</strong>crete<br />
steps aimed at enhancing cott<strong>on</strong> producti<strong>on</strong> efficiency and competitiveness in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>ir respective countries.<br />
x<br />
Faiz Mohammad<br />
Director,<br />
Ec<strong>on</strong>omic Policy & Strategic Planning Department
OPENING ADDRESS<br />
Dato Syed Jaafar Aznan<br />
Vice President Trade & Policy, IDB
OPENING ADDRESS<br />
Dato Syed Jaafar Aznan<br />
Vice President Trade & Policy, IDB<br />
In <str<strong>on</strong>g>the</str<strong>on</strong>g> name <str<strong>on</strong>g>of</str<strong>on</strong>g> Allah, <str<strong>on</strong>g>the</str<strong>on</strong>g> Most Gracious, <str<strong>on</strong>g>the</str<strong>on</strong>g> Most Merciful<br />
Distinguished Delegates,<br />
Bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs and Sisters,<br />
Assalamu Alaikum Warahmatullah Wabarakatuhu<br />
On behalf <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>Islamic</strong> <strong>Development</strong> Bank (IDB), I would like to extend a<br />
very warm welcome to all <str<strong>on</strong>g>of</str<strong>on</strong>g> you at <str<strong>on</strong>g>the</str<strong>on</strong>g> <str<strong>on</strong>g>Expert</str<strong>on</strong>g>s <str<strong>on</strong>g>Group</str<strong>on</strong>g> <str<strong>on</strong>g>Meeting</str<strong>on</strong>g> <strong>on</strong><br />
"Enhancing Producti<strong>on</strong> Efficiency and Internati<strong>on</strong>al Competitiveness in<br />
IDB Cott<strong>on</strong>-Producing Member Countries". It is indeed a privilege for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
IDB to host a meeting that brings toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r leading experts to brainstorm<br />
practical ways and means to enhance cott<strong>on</strong> producti<strong>on</strong> efficiency and<br />
internati<strong>on</strong>al competitiveness in IDB member countries as well as<br />
cooperati<strong>on</strong> am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g>m in this crucial area. I would like to take this<br />
opportunity to express our sincere thanks and appreciati<strong>on</strong> to you all for your<br />
cooperati<strong>on</strong> and partnership in organizing this event.<br />
Bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs and Sisters,<br />
Cott<strong>on</strong> producti<strong>on</strong> and trade is an important ec<strong>on</strong>omic activity in IDB cott<strong>on</strong>producing<br />
countries as it is a significant source <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir income. The cott<strong>on</strong><br />
sector in some member countries is so vital that <str<strong>on</strong>g>the</str<strong>on</strong>g> success or failure <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
cott<strong>on</strong> crop in a single year can have a major impact <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir GDP growth.<br />
This <str<strong>on</strong>g>Expert</str<strong>on</strong>g> <str<strong>on</strong>g>Group</str<strong>on</strong>g> <str<strong>on</strong>g>Meeting</str<strong>on</strong>g> is very important for all <str<strong>on</strong>g>of</str<strong>on</strong>g> us, especially at a time<br />
when global prices <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> have been declining due to high subsidies by<br />
developed countries. This decline in prices has had a serious ec<strong>on</strong>omic and<br />
social impact <strong>on</strong> poor populati<strong>on</strong>s in developing countries. According to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Food and Agriculture Organizati<strong>on</strong>(FAO) <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> United Nati<strong>on</strong>s, support for<br />
farmers in industrialized countries is equivalent to 30 times <str<strong>on</strong>g>the</str<strong>on</strong>g> amount<br />
provided as aid for agricultural development in developing countries.<br />
As you are aware, during <str<strong>on</strong>g>the</str<strong>on</strong>g> 5th WTO Ministerial C<strong>on</strong>ference in Cancun,<br />
Mexico, <str<strong>on</strong>g>the</str<strong>on</strong>g>re was a debate <strong>on</strong> agricultural subsidies in general and cott<strong>on</strong><br />
3
subsidies in particular. Four IDB member countries namely, Benin, Burkina<br />
Faso, Chad and Mali, raised this issue and called for <str<strong>on</strong>g>the</str<strong>on</strong>g> subsidies to be<br />
eliminated and for compensati<strong>on</strong> to be paid to <str<strong>on</strong>g>the</str<strong>on</strong>g>m for <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omic losses<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>y incurred because <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> subsidies. Their proposal received support from<br />
many o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries and <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO Director-General urged ministers to<br />
c<strong>on</strong>sider <str<strong>on</strong>g>the</str<strong>on</strong>g> proposal seriously.<br />
In this c<strong>on</strong>text, <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB addressed <str<strong>on</strong>g>the</str<strong>on</strong>g> impact <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> subsidies <str<strong>on</strong>g>of</str<strong>on</strong>g> developed<br />
countries to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir farmers <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB cott<strong>on</strong>-producing member countries in<br />
two activities organized in 2003 and 2004. First, in a sessi<strong>on</strong> during a<br />
C<strong>on</strong>sultative <str<strong>on</strong>g>Meeting</str<strong>on</strong>g> <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Doha Round in Geneva <strong>on</strong> 2-3 December 2003,<br />
which highlighted <str<strong>on</strong>g>the</str<strong>on</strong>g> precarious situati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> our West African cott<strong>on</strong>producing<br />
member countries because <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> resulting decline <str<strong>on</strong>g>of</str<strong>on</strong>g> world prices<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> caused by <str<strong>on</strong>g>the</str<strong>on</strong>g>se subsidies. Sec<strong>on</strong>d, a seminar was organized at IDB<br />
Headquarters <strong>on</strong> 10-11 May 2004, to discuss <str<strong>on</strong>g>the</str<strong>on</strong>g> impact <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
quotas <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> exports <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> OIC member countries and to explore practical<br />
ways <str<strong>on</strong>g>of</str<strong>on</strong>g> establishing a cooperati<strong>on</strong> am<strong>on</strong>g member countries in this critical<br />
area.<br />
Fortunately, cott<strong>on</strong>-producing developing countries are approaching <str<strong>on</strong>g>the</str<strong>on</strong>g> time<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> ending <str<strong>on</strong>g>the</str<strong>on</strong>g> practice <str<strong>on</strong>g>of</str<strong>on</strong>g> subsidies and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r supports which hurts <str<strong>on</strong>g>the</str<strong>on</strong>g>ir poor<br />
farmers and benefits industrial-scale producers in developed countries. As<br />
you are also aware, <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO made an initial ruling last Summer <strong>on</strong> a petiti<strong>on</strong><br />
by Brazil, supported by some West African cott<strong>on</strong>-producing countries, that<br />
challenged several types <str<strong>on</strong>g>of</str<strong>on</strong>g> U.S. agricultural support measures, including<br />
financial backing for cott<strong>on</strong> farmers. The WTO ruled that <str<strong>on</strong>g>the</str<strong>on</strong>g> United States<br />
must stop subsidizing its cott<strong>on</strong> farmers by July 1, 2005. If <str<strong>on</strong>g>the</str<strong>on</strong>g> ruling stands,<br />
it could give cott<strong>on</strong> producers in developing countries, particularly in West<br />
Africa, an incentive to increase producti<strong>on</strong> and get a fair price.<br />
In this envir<strong>on</strong>ment, <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB's new strategic framework includes greater<br />
support for <str<strong>on</strong>g>the</str<strong>on</strong>g> development <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> agricultural sector since this has a direct<br />
impact <strong>on</strong> poverty alleviati<strong>on</strong> in member countries. The share <str<strong>on</strong>g>of</str<strong>on</strong>g> agricultural<br />
sector, in <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB financing has been increasing significantly during <str<strong>on</strong>g>the</str<strong>on</strong>g> past<br />
few years and stood at 16 per cent in 1424H (2003-2004). However, we need<br />
to put in more efforts to assist our member countries in this regard; some <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>se need technical assistance to address key issues related to producti<strong>on</strong><br />
efficiency and productivity, while o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs need help to access key<br />
industrialized markets.<br />
4
Bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs and Sisters,<br />
There are a variety <str<strong>on</strong>g>of</str<strong>on</strong>g> challenges facing IDB member countries, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> agricultural subsidies and <str<strong>on</strong>g>the</str<strong>on</strong>g> lifting <str<strong>on</strong>g>of</str<strong>on</strong>g> textile quotas will bring<br />
new opportunities for which <str<strong>on</strong>g>the</str<strong>on</strong>g>se countries should be ready. The challenges<br />
are multi-dimensi<strong>on</strong>al, ranging from improving productivity and efficiency to<br />
facing increased competiti<strong>on</strong>. IDB member countries need to be prepared to<br />
face this situati<strong>on</strong>.The Bank's decisi<strong>on</strong> to organize this expert group meeting<br />
<strong>on</strong> enhancing producti<strong>on</strong> efficiency and internati<strong>on</strong>al competitiveness is a<br />
very timely initiative.<br />
In this regard, <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB is also collaborating with <str<strong>on</strong>g>the</str<strong>on</strong>g> Government <str<strong>on</strong>g>of</str<strong>on</strong>g> Burkina<br />
Faso for organizing a Regi<strong>on</strong>al Workshop <strong>on</strong> cott<strong>on</strong>. This workshop is<br />
scheduled to be held in Ouagadougou <strong>on</strong> 18-19 April 2005. The objective <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
this workshop is to promote cooperati<strong>on</strong> am<strong>on</strong>g OIC cott<strong>on</strong>-producing<br />
member countries and it will mainly focus <strong>on</strong> issues related to cott<strong>on</strong><br />
marketing and trade. The Bank has also recruited an expert to provide advice<br />
to <str<strong>on</strong>g>the</str<strong>on</strong>g> Ministry <str<strong>on</strong>g>of</str<strong>on</strong>g> Trade, Promoti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Enterprises and Handicraft <str<strong>on</strong>g>of</str<strong>on</strong>g> Burkina<br />
Faso for organizing this regi<strong>on</strong>al workshop. The expert is currently preparing<br />
two studies: <strong>on</strong>e <strong>on</strong> promoti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> partnerships in OIC member countries in<br />
order to process cott<strong>on</strong>, and <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d <strong>on</strong> c<strong>on</strong>straints and financing <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong><br />
processing. These studies c<strong>on</strong>stitute <str<strong>on</strong>g>the</str<strong>on</strong>g> core topics <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> workshop around<br />
which <str<strong>on</strong>g>the</str<strong>on</strong>g> major discussi<strong>on</strong>s will revolve.<br />
Generally, most IDB cott<strong>on</strong>-producing member countries have comparative<br />
advantage in cott<strong>on</strong> producti<strong>on</strong>. However, "comparative advantage" is not <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
same as "competitive advantage". Competitiveness is a c<strong>on</strong>tinuous process <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
innovating, upgrading and increasing value-added activities and it relates to<br />
induced technological changes and innovati<strong>on</strong>.<br />
Informati<strong>on</strong> <strong>on</strong> different aspects <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> and trade is <str<strong>on</strong>g>the</str<strong>on</strong>g> key for<br />
successful global competiti<strong>on</strong>. This <str<strong>on</strong>g>Expert</str<strong>on</strong>g> <str<strong>on</strong>g>Group</str<strong>on</strong>g> <str<strong>on</strong>g>Meeting</str<strong>on</strong>g> will provide an<br />
opportunity for <str<strong>on</strong>g>the</str<strong>on</strong>g> participating member countries to exchange views <strong>on</strong><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>se issues, develop a mechanism <str<strong>on</strong>g>of</str<strong>on</strong>g> regularly exchanging informati<strong>on</strong>, and<br />
to facilitate communicati<strong>on</strong> am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g>mselves.<br />
It is a great h<strong>on</strong>or for me to open this <str<strong>on</strong>g>Expert</str<strong>on</strong>g> <str<strong>on</strong>g>Group</str<strong>on</strong>g> <str<strong>on</strong>g>Meeting</str<strong>on</strong>g> with <str<strong>on</strong>g>the</str<strong>on</strong>g> aim <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
discussing <str<strong>on</strong>g>the</str<strong>on</strong>g> main challenges faced by <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB cott<strong>on</strong>-producing member<br />
countries, addressing c<strong>on</strong>crete acti<strong>on</strong>s to tackle <str<strong>on</strong>g>the</str<strong>on</strong>g>se issues, and lay down a<br />
framework for enhancing cooperati<strong>on</strong> am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g>mselves.<br />
5
Bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs and Sisters,<br />
It is our firm belief that member countries can achieve much more through<br />
mutual cooperati<strong>on</strong> as compared to what <str<strong>on</strong>g>the</str<strong>on</strong>g>y would be able to do<br />
individually. To this end, <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB looks forward to a successful meeting<br />
which would yield valuable outcomes and recommendati<strong>on</strong>s <strong>on</strong> developing a<br />
suitable framework for enhancing cooperati<strong>on</strong> am<strong>on</strong>g cott<strong>on</strong>-producing<br />
member countries and highlighting <str<strong>on</strong>g>the</str<strong>on</strong>g> possible role <str<strong>on</strong>g>of</str<strong>on</strong>g> bilateral and<br />
multilateral financing instituti<strong>on</strong>s, like <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB.<br />
We also hope that <str<strong>on</strong>g>the</str<strong>on</strong>g> proceedings <str<strong>on</strong>g>of</str<strong>on</strong>g> this meeting will be highly useful to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Regi<strong>on</strong>al Workshop <strong>on</strong> cott<strong>on</strong> in Burkina Faso. This will go a l<strong>on</strong>g way in<br />
assisting in <str<strong>on</strong>g>the</str<strong>on</strong>g> realizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> objectives <str<strong>on</strong>g>of</str<strong>on</strong>g> enhancing productivity and<br />
internati<strong>on</strong>al competitiveness in IDB member countries.<br />
With <str<strong>on</strong>g>the</str<strong>on</strong>g>se words, I <strong>on</strong>ce again welcome you to <str<strong>on</strong>g>the</str<strong>on</strong>g> meeting and wish you<br />
every success in your deliberati<strong>on</strong>s.<br />
Wassalamu Alikum Warahmatullah Wabarakatohu<br />
6
PART ONE<br />
MAJOR CHALLENGES TO IDB COTTON<br />
PRODUCING MEMBER COUNTRIES<br />
7
ENHANCING PRODUCTION EFFICIENCY AND INTERNATIONAL<br />
COMPETITIVENESS IN IDB COTTON-PRODUCING MEMBER<br />
COUNTRIES<br />
Rafiq Chaudhry<br />
Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee (USA)<br />
(Working Paper based <strong>on</strong> country studies for<br />
Mali and Pakistan by Amado Aly Yattara and Zahoor Ahmad)<br />
9
ENHANCING PRODUCTION EFFICIENCY AND INTERNATIONAL<br />
COMPETITIVENESS IN IDB COTTON-PRODUCING MEMBER<br />
COUNTRIES<br />
Executive Summary<br />
Rafiq Chaudhry<br />
Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee (USA)<br />
The farm value <str<strong>on</strong>g>of</str<strong>on</strong>g> world cott<strong>on</strong> producti<strong>on</strong> is approximately US$30 billi<strong>on</strong><br />
per year, including about US$20 billi<strong>on</strong> earned in developing countries.<br />
Textile export revenues derived from cott<strong>on</strong> are estimated at US$100 billi<strong>on</strong>,<br />
with most <str<strong>on</strong>g>of</str<strong>on</strong>g> this accruing to developing countries. Member countries <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
<strong>Islamic</strong> <strong>Development</strong> Bank (IDB) share 30% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world cott<strong>on</strong> area and<br />
28% <str<strong>on</strong>g>of</str<strong>on</strong>g> world cott<strong>on</strong> producti<strong>on</strong>. However, 38% <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> traded in <str<strong>on</strong>g>the</str<strong>on</strong>g> world<br />
in 2003/04 was produced in IDB member countries. Cott<strong>on</strong> is a cash crop and<br />
plays a vital role in <str<strong>on</strong>g>the</str<strong>on</strong>g> life <str<strong>on</strong>g>of</str<strong>on</strong>g> milli<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers around <str<strong>on</strong>g>the</str<strong>on</strong>g> world. Cott<strong>on</strong><br />
also plays a significant role in <str<strong>on</strong>g>the</str<strong>on</strong>g> food security program in <str<strong>on</strong>g>the</str<strong>on</strong>g> world,<br />
particularly when food crops follow cott<strong>on</strong> in rotati<strong>on</strong> systems. This working<br />
paper, “Enhancing Producti<strong>on</strong> Efficiency and Internati<strong>on</strong>al Competitiveness<br />
in IDB Cott<strong>on</strong>-Producing Member Countries,” commissi<strong>on</strong>ed by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Ec<strong>on</strong>omic Policy and Strategic Planning Department <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>Islamic</strong><br />
<strong>Development</strong> Bank, covers <str<strong>on</strong>g>the</str<strong>on</strong>g> current status <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong>,<br />
c<strong>on</strong>sumpti<strong>on</strong> and trade in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. The paper also highlights problem areas<br />
that require attenti<strong>on</strong> from internati<strong>on</strong>al instituti<strong>on</strong>s like IDB, while also<br />
making a number <str<strong>on</strong>g>of</str<strong>on</strong>g> suggesti<strong>on</strong>s for <str<strong>on</strong>g>the</str<strong>on</strong>g> development <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> world.<br />
World cott<strong>on</strong> producti<strong>on</strong> is going through drastic changes. Cott<strong>on</strong> yields are<br />
not increasing in most countries while <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> c<strong>on</strong>tinues to<br />
rise. The Cotlook A Index does not reflect <str<strong>on</strong>g>the</str<strong>on</strong>g> actual prices at which trading<br />
is d<strong>on</strong>e, but is <str<strong>on</strong>g>the</str<strong>on</strong>g> str<strong>on</strong>gest indicator <str<strong>on</strong>g>of</str<strong>on</strong>g> internati<strong>on</strong>al prices. The 30 year<br />
l<strong>on</strong>g-term average for <str<strong>on</strong>g>the</str<strong>on</strong>g> Cotlook A Index is US$1.54 per kg <str<strong>on</strong>g>of</str<strong>on</strong>g> lint. But <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
A Index averaged US$1.50 per kg in 2003/04 compared to US$1.23 per kg<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> previous year. World cott<strong>on</strong> prices are not rising in absolute terms. World<br />
cott<strong>on</strong> c<strong>on</strong>sumpti<strong>on</strong> increased at <str<strong>on</strong>g>the</str<strong>on</strong>g> rate <str<strong>on</strong>g>of</str<strong>on</strong>g> 0.3% during <str<strong>on</strong>g>the</str<strong>on</strong>g> 1990s and it is<br />
estimated that 50.5 milli<strong>on</strong> t<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> all fibers will be c<strong>on</strong>sumed in 2005.<br />
However, demand for cott<strong>on</strong> c<strong>on</strong>tinues to perform below <str<strong>on</strong>g>the</str<strong>on</strong>g> demand for<br />
o<str<strong>on</strong>g>the</str<strong>on</strong>g>r fibers and, as a result, cott<strong>on</strong> is loosing its share against o<str<strong>on</strong>g>the</str<strong>on</strong>g>r fibers. It<br />
is estimated that <str<strong>on</strong>g>the</str<strong>on</strong>g> market share <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> at <str<strong>on</strong>g>the</str<strong>on</strong>g> end use level in 2004 will<br />
be 39.2%. The two most important reas<strong>on</strong>s for <str<strong>on</strong>g>the</str<strong>on</strong>g> decline are lack <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
promoti<strong>on</strong>al campaigns and higher cott<strong>on</strong> prices compared to syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fibers.<br />
11
Cott<strong>on</strong> is a driving force for ec<strong>on</strong>omic development in many IDB member<br />
cott<strong>on</strong>-producing countries. The majority <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> African cott<strong>on</strong> growers are<br />
small-scale producers and most field operati<strong>on</strong>s are performed manually or<br />
by bullock tracti<strong>on</strong>. The governments in <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong> are under pressure to<br />
reform <str<strong>on</strong>g>the</str<strong>on</strong>g>ir cott<strong>on</strong> industries. About 95% <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> from <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong> is<br />
exported. The Central Asian countries are adapting to <str<strong>on</strong>g>the</str<strong>on</strong>g> private land<br />
ownership system. Sudan operates <str<strong>on</strong>g>the</str<strong>on</strong>g> largest cooperative farm in <str<strong>on</strong>g>the</str<strong>on</strong>g> world<br />
with 1.2 milli<strong>on</strong> irrigated hectares c<strong>on</strong>trolled by a single management at <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Gazira Scheme. In spite <str<strong>on</strong>g>of</str<strong>on</strong>g> small farming systems, cott<strong>on</strong> producti<strong>on</strong> is<br />
mostly mechanized in all IDB member countries in Asia.<br />
Pakistan is <str<strong>on</strong>g>the</str<strong>on</strong>g> largest producer and c<strong>on</strong>sumer <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> am<strong>on</strong>g IDB member<br />
countries. Cott<strong>on</strong> c<strong>on</strong>sumpti<strong>on</strong> c<strong>on</strong>tinues to grow in Turkey and is expected<br />
to be higher than that <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> USA in <str<strong>on</strong>g>the</str<strong>on</strong>g> next few years. Lifting <str<strong>on</strong>g>of</str<strong>on</strong>g> quota<br />
sancti<strong>on</strong>s in 2005 will bring many changes to <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al cott<strong>on</strong> trade.<br />
Eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> quotas will accelerate <str<strong>on</strong>g>the</str<strong>on</strong>g> shift <str<strong>on</strong>g>of</str<strong>on</strong>g> textile manufacturing to<br />
lower cost producing countries. Countries, which now produce or are able to<br />
c<strong>on</strong>tinue to produce at a lower cost will grab a major share from<br />
industrialized and developing countries. The indicati<strong>on</strong>s are that, outside <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> IDB member countries, China (Mainland) and India are going to be at an<br />
advantage after January 2005, when <str<strong>on</strong>g>the</str<strong>on</strong>g> quota systems disappear. Many<br />
governments, including some IDB member governments, provide direct<br />
support for cott<strong>on</strong> producti<strong>on</strong> in various forms. Developing countries used to<br />
subsidize inputs, but most <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>m have stopped doing it. Also, many<br />
countries used to impose duties <strong>on</strong> imports or exports <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> but most<br />
duties were eliminated by 1991. However, while direct subsidies <strong>on</strong> inputs<br />
and tariffs have been reduced or abolished, particularly after 1990 as a result<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> GATT agreement, <str<strong>on</strong>g>the</str<strong>on</strong>g> issue <str<strong>on</strong>g>of</str<strong>on</strong>g> direct payments has become more<br />
serious. According to <str<strong>on</strong>g>the</str<strong>on</strong>g> Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee (ICAC),<br />
direct income and price support provided to <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry by various<br />
governments amounted to US$4.8 billi<strong>on</strong> in 2002/03.<br />
U.S. cott<strong>on</strong> growers heavily depend <strong>on</strong> government support programs to<br />
c<strong>on</strong>tinue to produce cott<strong>on</strong>. Total expenditures by <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. government in<br />
support <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry amounted to $3.3 billi<strong>on</strong> in 2001/02, <str<strong>on</strong>g>of</str<strong>on</strong>g> which<br />
direct income and price support was $3 billi<strong>on</strong>. U.S government support is<br />
estimated to have declined to $3.2 billi<strong>on</strong> in 2002/03. Subsidies in <str<strong>on</strong>g>the</str<strong>on</strong>g> USA<br />
were as high as 47 cents per pound <str<strong>on</strong>g>of</str<strong>on</strong>g> upland cott<strong>on</strong> in 1986 and again in<br />
2000. Between 1980 and 2002, <str<strong>on</strong>g>the</str<strong>on</strong>g> average subsidy was 19 cents per pound.<br />
The average U.S. upland cott<strong>on</strong> farm price over those years was 59 cents per<br />
pound. Thus, <strong>on</strong> average, <str<strong>on</strong>g>the</str<strong>on</strong>g> program benefits accounted for <strong>on</strong>e-third <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
farm value <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong>. Cott<strong>on</strong> growers in Spain and Greece are <str<strong>on</strong>g>of</str<strong>on</strong>g>fered<br />
12
assistance through <str<strong>on</strong>g>the</str<strong>on</strong>g> EU Comm<strong>on</strong> Agricultural Policy (CAP). The average<br />
benefit per pound <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> during <str<strong>on</strong>g>the</str<strong>on</strong>g> last six seas<strong>on</strong>s has been 77 cents<br />
compared with an average market price <str<strong>on</strong>g>of</str<strong>on</strong>g> 56 cents per pound for <str<strong>on</strong>g>the</str<strong>on</strong>g> same<br />
period. Thus, benefits to cott<strong>on</strong> in Greece and Spain averaged 21 cents per<br />
pound, or 37%, over and above <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Outlook A Index. Internati<strong>on</strong>al<br />
organizati<strong>on</strong>s and governments <str<strong>on</strong>g>the</str<strong>on</strong>g>mselves have studied <str<strong>on</strong>g>the</str<strong>on</strong>g> impact <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
subsidy programs <strong>on</strong> internati<strong>on</strong>al prices and have c<strong>on</strong>cluded that <str<strong>on</strong>g>the</str<strong>on</strong>g>se<br />
programs artificially depress internati<strong>on</strong>al prices.<br />
Genetically engineered Biotech cott<strong>on</strong> is spreading and it is estimated that<br />
Biotech varieties were planted <strong>on</strong> 21% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world total area and c<strong>on</strong>tributed<br />
to 30% <str<strong>on</strong>g>of</str<strong>on</strong>g> world producti<strong>on</strong> in 2003/04. Ind<strong>on</strong>esia is <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly IDB member<br />
country to approve Biotech Bt cott<strong>on</strong>. In order to remain competitive in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
producti<strong>on</strong> and marketing <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>, new technologies need to be developed<br />
and adopted. There are a variety <str<strong>on</strong>g>of</str<strong>on</strong>g> challenges facing IDB member countries<br />
and <str<strong>on</strong>g>the</str<strong>on</strong>g> lifting <str<strong>on</strong>g>of</str<strong>on</strong>g> quota systems will bring new opportunities for which IDB<br />
member countries should be ready. The private sector must come forward to<br />
accept its share <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>tributi<strong>on</strong>s to <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al ec<strong>on</strong>omies, but it is also very<br />
critical that private sector participants be capable and ready to perform<br />
resp<strong>on</strong>sibly and successfully. In this regard, governments should play <str<strong>on</strong>g>the</str<strong>on</strong>g> role<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> assisting different stakeholders to grasp different opportunities and resolve<br />
issues. Governments should be resp<strong>on</strong>sible for supervising and working with<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> private sector to help boost cott<strong>on</strong> producti<strong>on</strong>, c<strong>on</strong>sumpti<strong>on</strong> and trade in<br />
IDB member countries.<br />
Cott<strong>on</strong> produced in IDB member countries is valued at about nine billi<strong>on</strong><br />
U.S. dollars based <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> 30-year average Outlook A Index price <str<strong>on</strong>g>of</str<strong>on</strong>g> US$1.54<br />
per kilogram <str<strong>on</strong>g>of</str<strong>on</strong>g> lint. Half <str<strong>on</strong>g>of</str<strong>on</strong>g> IDB member countries are involved in cott<strong>on</strong><br />
producti<strong>on</strong> and cott<strong>on</strong> is critical to <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy <str<strong>on</strong>g>of</str<strong>on</strong>g> many IDB cott<strong>on</strong>producing<br />
countries. The success or failure <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> crop steers <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
ec<strong>on</strong>omies in ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r directi<strong>on</strong>. In some countries like Egypt, Mali, Pakistan,<br />
Sudan, Turkmenistan and Uzbekistan <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy is dependent <strong>on</strong> cott<strong>on</strong>. In<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> last chapter, <str<strong>on</strong>g>the</str<strong>on</strong>g> report makes a number <str<strong>on</strong>g>of</str<strong>on</strong>g> recommendati<strong>on</strong>s for<br />
enhancing cooperati<strong>on</strong> am<strong>on</strong>g IDB cott<strong>on</strong>-producing countries. There is<br />
much knowledge to be shared am<strong>on</strong>g IDB member countries and IDB could<br />
provide an effective forum for such cooperati<strong>on</strong>.<br />
Cott<strong>on</strong> is c<strong>on</strong>fr<strong>on</strong>ted with many challenging issues and countries must be<br />
prepared to face <str<strong>on</strong>g>the</str<strong>on</strong>g>se challenges. The challenges are multi-dimensi<strong>on</strong>al,<br />
ranging from improving productivity and efficiency to facing <str<strong>on</strong>g>the</str<strong>on</strong>g> postsubsidy<br />
and post-eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> textile quota systems in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. IDB<br />
member countries need to be prepared to face <str<strong>on</strong>g>the</str<strong>on</strong>g> situati<strong>on</strong> and IDB’s<br />
13
decisi<strong>on</strong> to organize an expert c<strong>on</strong>sultati<strong>on</strong> is a very timely initiative. IDB<br />
will bring its cott<strong>on</strong>-producing member governments toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r for <str<strong>on</strong>g>the</str<strong>on</strong>g> first<br />
time to discuss cott<strong>on</strong> issues. The expert c<strong>on</strong>sultati<strong>on</strong> will help to solidify<br />
support for <str<strong>on</strong>g>the</str<strong>on</strong>g> initiative taken by Benin, Burkina Faso, Chad and Mali<br />
against subsidies, which is supported by cott<strong>on</strong> growers in all IDB cott<strong>on</strong><br />
producing member countries. IDB will provide a forum where countries will<br />
have <str<strong>on</strong>g>the</str<strong>on</strong>g> opti<strong>on</strong> to discuss <str<strong>on</strong>g>the</str<strong>on</strong>g> recommendati<strong>on</strong>s made in <str<strong>on</strong>g>the</str<strong>on</strong>g> current working<br />
paper. The recommendati<strong>on</strong>s to be c<strong>on</strong>sidered by <str<strong>on</strong>g>the</str<strong>on</strong>g> expert c<strong>on</strong>sultati<strong>on</strong>, if<br />
implemented, will go a l<strong>on</strong>g way in streng<str<strong>on</strong>g>the</str<strong>on</strong>g>ning <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector,<br />
improving <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omic situati<strong>on</strong> and reducing poverty in <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB countries.<br />
Unlike some o<str<strong>on</strong>g>the</str<strong>on</strong>g>r crops that have 17 internati<strong>on</strong>al research centers available,<br />
funded by <str<strong>on</strong>g>the</str<strong>on</strong>g> C<strong>on</strong>sultative <str<strong>on</strong>g>Group</str<strong>on</strong>g> <strong>on</strong> Internati<strong>on</strong>al Agriculture Research<br />
(CGIAR), cott<strong>on</strong> has no internati<strong>on</strong>al research center. Countries depend<br />
entirely <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own resources and manpower to develop and improve<br />
cott<strong>on</strong>. There is no forum where a developing country researchers can seek<br />
research guidelines. The limited service/support provided by <str<strong>on</strong>g>the</str<strong>on</strong>g> ICAC is far<br />
below <str<strong>on</strong>g>the</str<strong>on</strong>g> needs in IDB member countries. ICAC is not a research instituti<strong>on</strong><br />
and is also limited by its mandate not to undertake any practical research <strong>on</strong><br />
cott<strong>on</strong>. IDB’s expert c<strong>on</strong>sultati<strong>on</strong> <strong>on</strong> cott<strong>on</strong> could play an important role in<br />
supplementing nati<strong>on</strong>al and regi<strong>on</strong>al efforts to abridge gaps in <str<strong>on</strong>g>the</str<strong>on</strong>g> area <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
cott<strong>on</strong> productivity and competitiveness, as well as streng<str<strong>on</strong>g>the</str<strong>on</strong>g>n <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
instituti<strong>on</strong>al and marketing capacity <str<strong>on</strong>g>of</str<strong>on</strong>g> its member countries.<br />
I. INTRODUCTION AND BACKGROUND<br />
1. World Situati<strong>on</strong><br />
Cott<strong>on</strong> is <str<strong>on</strong>g>the</str<strong>on</strong>g> most important natural fiber in <str<strong>on</strong>g>the</str<strong>on</strong>g> world accounting for 40% <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
all fibers c<strong>on</strong>sumed at <str<strong>on</strong>g>the</str<strong>on</strong>g> end use level. Cott<strong>on</strong> is grown as a fiber crop but<br />
also serves as a food crop by supplementing <str<strong>on</strong>g>the</str<strong>on</strong>g> vegetable oil supply,<br />
particularly in developing cott<strong>on</strong>-producing countries. When cott<strong>on</strong>seed is not<br />
processed in oil extracting factories, it is used to feed livestock, an indirect<br />
way <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>’s c<strong>on</strong>tributi<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> food supply chain. On average, cott<strong>on</strong> is<br />
planted <strong>on</strong> 34-36 milli<strong>on</strong> hectares every year in 60 countries. The farm value<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> world cott<strong>on</strong> producti<strong>on</strong> is approximately US$30 billi<strong>on</strong> per year,<br />
including about US$20 billi<strong>on</strong> earned in developing countries. Textile export<br />
revenues derived from cott<strong>on</strong> are estimated at US$100 billi<strong>on</strong>, with most <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
this amount accruing to developing countries (Townsend 2004). Cott<strong>on</strong> is a<br />
cash crop and plays a significant role in <str<strong>on</strong>g>the</str<strong>on</strong>g> life <str<strong>on</strong>g>of</str<strong>on</strong>g> milli<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers around<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> world. Cott<strong>on</strong> plays a vital role in <str<strong>on</strong>g>the</str<strong>on</strong>g> food security program in <str<strong>on</strong>g>the</str<strong>on</strong>g> world,<br />
14
particularly when food crops follow cott<strong>on</strong> in rotati<strong>on</strong> systems, which is <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
case in many cott<strong>on</strong>-producing countries. Farmers produce cott<strong>on</strong>, sell it and<br />
buy inputs for food crops. Cott<strong>on</strong> is intricately woven in <str<strong>on</strong>g>the</str<strong>on</strong>g> every-day life <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
individuals everywhere <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> earth.<br />
World cott<strong>on</strong> producti<strong>on</strong> is going through drastic changes. Prices are not<br />
rising in absolute terms, cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> is <str<strong>on</strong>g>the</str<strong>on</strong>g> highest ever, cott<strong>on</strong> is<br />
loosing its share to syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fibers, genetically engineered varieties are<br />
expanding and fiber testing is becoming more and more automated and faster.<br />
According to <str<strong>on</strong>g>the</str<strong>on</strong>g> ICAC, 20.2 milli<strong>on</strong> t<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> was produced in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
world during 2003/04 compared to 19.1 milli<strong>on</strong> t<strong>on</strong>s <str<strong>on</strong>g>the</str<strong>on</strong>g> previous seas<strong>on</strong><br />
(Esture 2004). Cott<strong>on</strong> c<strong>on</strong>sumpti<strong>on</strong> is estimated to be 20.7 milli<strong>on</strong> t<strong>on</strong>s in<br />
2003/04, 40% more than 20 years ago. While c<strong>on</strong>sumpti<strong>on</strong> is expected to<br />
c<strong>on</strong>tinue to increase in China (Mainland) and some o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries, declines<br />
in mill use in <str<strong>on</strong>g>the</str<strong>on</strong>g> USA are expected to affect world c<strong>on</strong>sumpti<strong>on</strong> figures<br />
negatively. C<strong>on</strong>sumpti<strong>on</strong> is expected to be 20.6 milli<strong>on</strong> t<strong>on</strong>s in 2004/05<br />
(Esture 2004). Driven by increasing exports <str<strong>on</strong>g>of</str<strong>on</strong>g> yarn and fabric over <str<strong>on</strong>g>the</str<strong>on</strong>g> last<br />
four years, Pakistan surpassed <str<strong>on</strong>g>the</str<strong>on</strong>g> USA as <str<strong>on</strong>g>the</str<strong>on</strong>g> third largest cott<strong>on</strong> c<strong>on</strong>suming<br />
country in <str<strong>on</strong>g>the</str<strong>on</strong>g> world after China (Mainland) and India.<br />
The Cotlook A Index, published by a private company based in <str<strong>on</strong>g>the</str<strong>on</strong>g> UK,<br />
usually measures internati<strong>on</strong>al cott<strong>on</strong> prices. The Cotlook A Index does not<br />
reflect <str<strong>on</strong>g>the</str<strong>on</strong>g> actual prices at which trading is d<strong>on</strong>e, but it is <str<strong>on</strong>g>the</str<strong>on</strong>g> str<strong>on</strong>gest<br />
indicator <str<strong>on</strong>g>of</str<strong>on</strong>g> internati<strong>on</strong>al prices. The l<strong>on</strong>g-term average for <str<strong>on</strong>g>the</str<strong>on</strong>g> Cotlook A<br />
Index is US$1.54 per kg <str<strong>on</strong>g>of</str<strong>on</strong>g> lint. But at <str<strong>on</strong>g>the</str<strong>on</strong>g> end <str<strong>on</strong>g>of</str<strong>on</strong>g> 2003/04 <str<strong>on</strong>g>the</str<strong>on</strong>g> A Index was<br />
US$1.50 per kg compared to US$1.23 per kg <str<strong>on</strong>g>the</str<strong>on</strong>g> previous year. The latest<br />
ICAC supply and demand estimates suggest that <str<strong>on</strong>g>the</str<strong>on</strong>g> Cotlook A Index will<br />
average US$1.19 per kg in 2004/05 and US$1.24 per kg in 2005/06 (Esture<br />
2004). Trade from China (Mainland) has a significant impact <strong>on</strong> internati<strong>on</strong>al<br />
prices. Exports from China (Mainland) depress internati<strong>on</strong>al prices while<br />
imports result in higher internati<strong>on</strong>al prices. Cott<strong>on</strong> c<strong>on</strong>sumpti<strong>on</strong> in China<br />
(Mainland) c<strong>on</strong>tinues to grow, but due to higher producti<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> country,<br />
imports by China (Mainland) are expected to decline in 2004/05. Lower<br />
imports by China (Mainland) will result in a lower Cotlook A Index in<br />
2004/05 and <str<strong>on</strong>g>the</str<strong>on</strong>g> year after.<br />
The world average yield was 635 kilograms <str<strong>on</strong>g>of</str<strong>on</strong>g> lint per hectare in 2003/04<br />
(Esture 2004). The highest yield ever achieved in <str<strong>on</strong>g>the</str<strong>on</strong>g> world is 642 kg/ha in<br />
2001/02. Average yield is expected to increase in 2004/05 to a new record.<br />
The world yield grew at <str<strong>on</strong>g>the</str<strong>on</strong>g> rate <str<strong>on</strong>g>of</str<strong>on</strong>g> 2%, or eight kilograms/ha/year, from<br />
1951/52 to 1991/92. There was no increase in yield during <str<strong>on</strong>g>the</str<strong>on</strong>g> 1990s.<br />
However, yields have been higher for <str<strong>on</strong>g>the</str<strong>on</strong>g> last three seas<strong>on</strong>s due to higher<br />
15
yields in Brazil, China (Mainland) and Turkey. Higher yields in Brazil are<br />
due to shifts in cott<strong>on</strong> area to high yielding areas in <str<strong>on</strong>g>the</str<strong>on</strong>g> south. China<br />
(Mainland) has recovered from <str<strong>on</strong>g>the</str<strong>on</strong>g> insecticide resistance problem, while <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
GAP irrigati<strong>on</strong> project in Turkey has c<strong>on</strong>tributed to increases in yields. No<br />
significant increases in yield are expected for many years unless a new n<strong>on</strong>traditi<strong>on</strong>al<br />
technology is developed and implemented.<br />
On average, world cott<strong>on</strong> c<strong>on</strong>sumpti<strong>on</strong> increased at <str<strong>on</strong>g>the</str<strong>on</strong>g> rate <str<strong>on</strong>g>of</str<strong>on</strong>g> 0.3% during<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> 1990s. Studies d<strong>on</strong>e by ICAC in collaborati<strong>on</strong> with FAO forecast that<br />
50.5 milli<strong>on</strong> t<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> all fibers will be c<strong>on</strong>sumed in 2005 (ICAC 1999).<br />
However, <str<strong>on</strong>g>the</str<strong>on</strong>g> demand for cott<strong>on</strong> c<strong>on</strong>tinues to perform below <str<strong>on</strong>g>the</str<strong>on</strong>g> demand for<br />
o<str<strong>on</strong>g>the</str<strong>on</strong>g>r fibers and, as a result, cott<strong>on</strong> is losing its share against o<str<strong>on</strong>g>the</str<strong>on</strong>g>r fibers. It is<br />
estimated that <str<strong>on</strong>g>the</str<strong>on</strong>g> market share <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> at <str<strong>on</strong>g>the</str<strong>on</strong>g> end use level in 2004 will be<br />
39.2%. Cott<strong>on</strong>’s share will c<strong>on</strong>tinue to drop and is estimated to be <strong>on</strong>ly<br />
38.7% in 2005 (ICAC 2003a).<br />
2. Situati<strong>on</strong> in IDB Member Countries<br />
Out <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> total 55 member governments <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>Islamic</strong> <strong>Development</strong> Bank,<br />
29 countries produce cott<strong>on</strong>. Four o<str<strong>on</strong>g>the</str<strong>on</strong>g>r members c<strong>on</strong>sume cott<strong>on</strong>. Only 20<br />
member governments <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB nei<str<strong>on</strong>g>the</str<strong>on</strong>g>r produce nor have a large textile<br />
industry for processing cott<strong>on</strong> or yarn. Twenty-nine IDB cott<strong>on</strong>-producing<br />
countries shared 30% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world total area and 29% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world total<br />
producti<strong>on</strong> in 2003/04. IDB member countries shared 25% <str<strong>on</strong>g>of</str<strong>on</strong>g> total cott<strong>on</strong><br />
c<strong>on</strong>sumed in <str<strong>on</strong>g>the</str<strong>on</strong>g> world in 2003/04, and in <str<strong>on</strong>g>the</str<strong>on</strong>g> same year <str<strong>on</strong>g>the</str<strong>on</strong>g>y shared 38% <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
total cott<strong>on</strong> exports in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. One-third <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world ending stocks at <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
end <str<strong>on</strong>g>of</str<strong>on</strong>g> 2003/04 will be located in IDB member countries (Table 4).<br />
Average yields in most IDB member countries, o<str<strong>on</strong>g>the</str<strong>on</strong>g>r than <str<strong>on</strong>g>the</str<strong>on</strong>g> West African<br />
and Eastern African countries, are competitive. The world average yield in<br />
2003/04 was 635 kg/ha, compared to 596 kg/ha in IDB member countries.<br />
The average yield in IDB member countries in <str<strong>on</strong>g>the</str<strong>on</strong>g> West African regi<strong>on</strong> is<br />
<strong>on</strong>ly two-thirds <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world average. The regi<strong>on</strong> has potential and has tripled<br />
its producti<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> last 20 years, but <strong>on</strong>ly due to increases in area. Average<br />
yields in Mozambique and Uganda, where cott<strong>on</strong> was planted <strong>on</strong> 445,000<br />
hectares in 2003/04, were <strong>on</strong>ly 18% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world average.<br />
Average yields in IDB member countries range from 129 kg/ha in Uganda to<br />
1,364 kg/ha in Syria in 2003/04. Syria is able to achieve high yields with<br />
almost no use <str<strong>on</strong>g>of</str<strong>on</strong>g> insecticides. Average yields in Turkey are sec<strong>on</strong>d <strong>on</strong>ly to<br />
Syria, i.e., 1,286 kg/ha from 700,000 hectares planted to cott<strong>on</strong> in 2003/04.<br />
But, <strong>on</strong> average, insecticides are sprayed at least 10 times per seas<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
16
Çukurova regi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Turkey. Average yields in Central Asian IDB member<br />
countries are <strong>on</strong>ly 75% <str<strong>on</strong>g>of</str<strong>on</strong>g> what <str<strong>on</strong>g>the</str<strong>on</strong>g>y achieved 25 years ago. Yields have g<strong>on</strong>e<br />
down slowly during <str<strong>on</strong>g>the</str<strong>on</strong>g> 1980s and significantly since <str<strong>on</strong>g>the</str<strong>on</strong>g>se countries became<br />
independent in <str<strong>on</strong>g>the</str<strong>on</strong>g> early 1990s.<br />
Egypt produces <str<strong>on</strong>g>the</str<strong>on</strong>g> best quality cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. Egypt, al<strong>on</strong>g with Sudan<br />
and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r IDB member countries, shared 55% <str<strong>on</strong>g>of</str<strong>on</strong>g> extra-fine cott<strong>on</strong> producti<strong>on</strong><br />
in <str<strong>on</strong>g>the</str<strong>on</strong>g> world in 2003/04. Pakistan is <str<strong>on</strong>g>the</str<strong>on</strong>g> largest cott<strong>on</strong> producing country<br />
am<strong>on</strong>g IDB members, with 30% <str<strong>on</strong>g>of</str<strong>on</strong>g> total producti<strong>on</strong>. Pakistan is also <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
largest c<strong>on</strong>sumer <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> am<strong>on</strong>g all IDB members. Pakistan became an<br />
importing country in 1993/94 because producti<strong>on</strong> was affected due to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
severe attack by <str<strong>on</strong>g>the</str<strong>on</strong>g> leaf curl virus disease (Ahmed 2004). Pakistan overcame<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> disease problem, but due to a c<strong>on</strong>tinuous increase in domestic mill<br />
c<strong>on</strong>sumpti<strong>on</strong>, it is a net importing country. In additi<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> leaf curl virus<br />
attack that dropped <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al average yield from 769 kg/ha in 1991/92 to<br />
543 kg/ha <str<strong>on</strong>g>the</str<strong>on</strong>g> next year, Pakistan has successfully overcome <str<strong>on</strong>g>the</str<strong>on</strong>g> problem <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
heat sterility. Syria has also faced a similar situati<strong>on</strong> and successfully<br />
developed heat tolerant varieties.<br />
Many IDB cott<strong>on</strong>-producing member countries, small and large, are<br />
dependent <strong>on</strong> cott<strong>on</strong> producti<strong>on</strong> and trade. Cott<strong>on</strong> is so intricately woven in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>ir ec<strong>on</strong>omies that <str<strong>on</strong>g>the</str<strong>on</strong>g> success or failure <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> crop steers <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
ec<strong>on</strong>omies in ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r directi<strong>on</strong>. In some countries like Egypt, Mali, Pakistan,<br />
Sudan, Turkmenistan and Uzbekistan <str<strong>on</strong>g>the</str<strong>on</strong>g> impact is so huge that a poor cott<strong>on</strong><br />
crop not <strong>on</strong>ly has a direct impact <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al GDP but also <str<strong>on</strong>g>the</str<strong>on</strong>g> effect lasts<br />
for many years. Apart from employing a vast majority <str<strong>on</strong>g>of</str<strong>on</strong>g> labor in farming<br />
operati<strong>on</strong>s, cott<strong>on</strong> also employs a large work force in <str<strong>on</strong>g>the</str<strong>on</strong>g> industry that uses it<br />
as a raw material. Countries just cannot afford to lower <str<strong>on</strong>g>the</str<strong>on</strong>g> priority given to<br />
cott<strong>on</strong>.<br />
Cott<strong>on</strong> is planted <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> average <strong>on</strong> 34-36 milli<strong>on</strong> hectares and <str<strong>on</strong>g>the</str<strong>on</strong>g> farm value <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
world cott<strong>on</strong> producti<strong>on</strong> is approximately US$30 billi<strong>on</strong> per year.<br />
The farm value <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> produced in IDB member countries is approximately US$9<br />
billi<strong>on</strong>.<br />
Twenty-nine IDB cott<strong>on</strong>-producing countries shared 30% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world total area and<br />
29% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world total producti<strong>on</strong> in 2003/04. IDB member countries shared 25% <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
total cott<strong>on</strong> c<strong>on</strong>sumed in <str<strong>on</strong>g>the</str<strong>on</strong>g> world in 2003/04, and in <str<strong>on</strong>g>the</str<strong>on</strong>g> same year <str<strong>on</strong>g>the</str<strong>on</strong>g>y shared<br />
38% <str<strong>on</strong>g>of</str<strong>on</strong>g> total cott<strong>on</strong> exports in <str<strong>on</strong>g>the</str<strong>on</strong>g> world.<br />
17
Diversity in producti<strong>on</strong> practices and independent successes in a variety <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
fields am<strong>on</strong>g IDB member countries show that <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a great opportunity for<br />
IDB member countries to share knowledge am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g>mselves. Cott<strong>on</strong><br />
producing c<strong>on</strong>diti<strong>on</strong>s are similar am<strong>on</strong>g many countries within and across<br />
regi<strong>on</strong>s, but <str<strong>on</strong>g>the</str<strong>on</strong>g>re is no formal way to share experiences. There is no<br />
internati<strong>on</strong>al research institute/center <strong>on</strong> cott<strong>on</strong> and IDB member countries,<br />
having limited resources, suffer <str<strong>on</strong>g>the</str<strong>on</strong>g> most.<br />
According to <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO Agreement <strong>on</strong> Textiles and Clothing, <str<strong>on</strong>g>the</str<strong>on</strong>g> quota barriers<br />
imposed by developed countries <strong>on</strong> internati<strong>on</strong>al trade in textiles will be eliminated<br />
by January 2005. With <str<strong>on</strong>g>the</str<strong>on</strong>g> emergence <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> new internati<strong>on</strong>al trade regime <strong>on</strong><br />
textiles and clothing under <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO, cott<strong>on</strong>-producing and -c<strong>on</strong>suming member<br />
countries, whose ec<strong>on</strong>omies heavily depend <strong>on</strong> cott<strong>on</strong> producti<strong>on</strong>, will have to<br />
undertake additi<strong>on</strong>al efforts to successfully meet <str<strong>on</strong>g>the</str<strong>on</strong>g> new challenges and to remain<br />
globally competitive. They will not <strong>on</strong>ly need to enhance <str<strong>on</strong>g>the</str<strong>on</strong>g>ir technical capabilities<br />
to be efficient in producing cott<strong>on</strong> but <str<strong>on</strong>g>the</str<strong>on</strong>g>y will also need to streng<str<strong>on</strong>g>the</str<strong>on</strong>g>n <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
instituti<strong>on</strong>al and marketing capacities.<br />
Many studies carried out by <str<strong>on</strong>g>the</str<strong>on</strong>g> Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee,<br />
universities and independent individuals indicate that direct subsidies depress<br />
internati<strong>on</strong>al prices. The World Trade Organizati<strong>on</strong> has already termed <str<strong>on</strong>g>the</str<strong>on</strong>g>se<br />
subsidies illegal. Some member governments <str<strong>on</strong>g>of</str<strong>on</strong>g> IDB—Benin, Burkina Faso,<br />
Chad and Mali—have raised a str<strong>on</strong>g voice against subsidies which affect<br />
milli<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> growers in IDB member countries. C<strong>on</strong>sequently, at <str<strong>on</strong>g>the</str<strong>on</strong>g> 5th<br />
WTO Ministerial C<strong>on</strong>ference in Cancun, Mexico, <str<strong>on</strong>g>the</str<strong>on</strong>g>re was a debate <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
impact <str<strong>on</strong>g>of</str<strong>on</strong>g> current cott<strong>on</strong> subsidies <str<strong>on</strong>g>of</str<strong>on</strong>g> rich countries <strong>on</strong> cott<strong>on</strong> producti<strong>on</strong> and<br />
marketing <str<strong>on</strong>g>of</str<strong>on</strong>g> developing countries. Many o<str<strong>on</strong>g>the</str<strong>on</strong>g>r developing countries,<br />
including Brazil and India, called for <str<strong>on</strong>g>the</str<strong>on</strong>g> eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> subsidies, but <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
four African countries also called for compensati<strong>on</strong> to be paid to <str<strong>on</strong>g>the</str<strong>on</strong>g>m for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
ec<strong>on</strong>omic losses <str<strong>on</strong>g>the</str<strong>on</strong>g>y have incurred because <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> subsidies. They proposed<br />
a soluti<strong>on</strong> that would allow <str<strong>on</strong>g>the</str<strong>on</strong>g>m to participate more in <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al<br />
trading system and to use trade in order to lift <str<strong>on</strong>g>the</str<strong>on</strong>g>mselves out <str<strong>on</strong>g>of</str<strong>on</strong>g> poverty. In<br />
this c<strong>on</strong>text, <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO Director-General urged ministers at <str<strong>on</strong>g>the</str<strong>on</strong>g> 5th WTO<br />
Ministerial C<strong>on</strong>ference in Cancun to c<strong>on</strong>sider <str<strong>on</strong>g>the</str<strong>on</strong>g> proposal seriously.<br />
Unfortunately, <str<strong>on</strong>g>the</str<strong>on</strong>g> meeting ended without any agreement <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> matter but<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> discussi<strong>on</strong> clearly showed that cott<strong>on</strong> has become an issue that will be<br />
highly influenced by future developments <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO negotiati<strong>on</strong>s. Benin,<br />
Burkina Faso, Chad and Mali, al<strong>on</strong>g with Brazil and some o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries<br />
c<strong>on</strong>tinued pushing <str<strong>on</strong>g>the</str<strong>on</strong>g> issues. Ultimately, <strong>on</strong> August 1, 2004, <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO<br />
approved a new framework agreement designed to be <str<strong>on</strong>g>the</str<strong>on</strong>g> roadmap for<br />
completing <str<strong>on</strong>g>the</str<strong>on</strong>g> Doha Round. Full negotiati<strong>on</strong>s will start in September 2004,<br />
18
and it was also decided that cott<strong>on</strong> will be a part <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> negotiati<strong>on</strong>s and that it<br />
should be handled separately from o<str<strong>on</strong>g>the</str<strong>on</strong>g>r commodities.<br />
IDB member countries should be ready to face <str<strong>on</strong>g>the</str<strong>on</strong>g> challenge <str<strong>on</strong>g>of</str<strong>on</strong>g> quota free<br />
textile trade and must vigorously support its fellow members’ initiative <strong>on</strong><br />
subsidies. IDB member countries can greatly improve <str<strong>on</strong>g>the</str<strong>on</strong>g>ir producti<strong>on</strong><br />
efficiency and competitiveness if <str<strong>on</strong>g>the</str<strong>on</strong>g>y learn from each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r’s experience. In<br />
this c<strong>on</strong>text, <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB could play an important role in supplementing nati<strong>on</strong>al<br />
and regi<strong>on</strong>al efforts to abridge <str<strong>on</strong>g>the</str<strong>on</strong>g> gap in <str<strong>on</strong>g>the</str<strong>on</strong>g> area <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> productivity and<br />
competitiveness as well as streng<str<strong>on</strong>g>the</str<strong>on</strong>g>n <str<strong>on</strong>g>the</str<strong>on</strong>g> instituti<strong>on</strong>al and marketing capacity<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> its member countries. With <str<strong>on</strong>g>the</str<strong>on</strong>g> same objective, IDB decided to organize an<br />
expert group meeting <strong>on</strong> "Enhancing Cott<strong>on</strong> Producti<strong>on</strong> Efficiency and<br />
Internati<strong>on</strong>al Competitiveness in Cott<strong>on</strong>-Producing IDB Member Countries."<br />
The main objective <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> meeting will be to discuss and explore practical<br />
ways and means <str<strong>on</strong>g>of</str<strong>on</strong>g> enhancing cott<strong>on</strong> producti<strong>on</strong> efficiency and<br />
competitiveness and to share experiences and best practices am<strong>on</strong>g member<br />
countries in this crucial area.<br />
3. Objective <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Working Paper<br />
The main purpose <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> working paper is to identify and highlight <str<strong>on</strong>g>the</str<strong>on</strong>g> major<br />
issues related to enhancing <str<strong>on</strong>g>the</str<strong>on</strong>g> productivity and internati<strong>on</strong>al competitiveness<br />
in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sub-sector and to explore ways and means <str<strong>on</strong>g>of</str<strong>on</strong>g> designing a<br />
cooperati<strong>on</strong> framework for sharing experiences am<strong>on</strong>gst <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong>-producing<br />
IDB member countries1.<br />
The working paper is organized as follows: Secti<strong>on</strong> II describes <str<strong>on</strong>g>the</str<strong>on</strong>g> major<br />
challenges to IDB cott<strong>on</strong>-producing countries. Current cott<strong>on</strong> policy in rich<br />
countries and Its effect <strong>on</strong> IDB cott<strong>on</strong>-producing countries is presented in<br />
secti<strong>on</strong> III. Enhancing efficiency, productivity and competitiveness in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
cott<strong>on</strong> sector are introduced in secti<strong>on</strong> IV and V. Secti<strong>on</strong> VI analyzes <str<strong>on</strong>g>the</str<strong>on</strong>g> role<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector in cott<strong>on</strong>. The framework for enhancing cooperati<strong>on</strong><br />
am<strong>on</strong>g IDB cott<strong>on</strong>-producing countries is introduced in secti<strong>on</strong> VII. Finally,<br />
secti<strong>on</strong> VIII presents c<strong>on</strong>clusi<strong>on</strong>s and recommendati<strong>on</strong>s.<br />
1 The current report has been prepared <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> basis <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> two regi<strong>on</strong>al reports<br />
executed by IDB and undertaken by experts, <strong>on</strong>e each in Africa and Asia, have<br />
provided in-depth analysis <str<strong>on</strong>g>of</str<strong>on</strong>g> various issues faced by IDB member countries.<br />
19
II. MAJOR CHALLENGES TO IDB COTTON PRODUCING<br />
MEMBER COUNTRIES<br />
Cott<strong>on</strong> is a driving force for ec<strong>on</strong>omic development in many IDB member<br />
countries. Cott<strong>on</strong> is grown in West and Central Africa <strong>on</strong> approximately 60%<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cultivated land, and milli<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers are involved in its cultivati<strong>on</strong>.<br />
Cott<strong>on</strong> is planted <strong>on</strong> about 10% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cultivated area in Pakistan and <strong>on</strong>ly<br />
3% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cultivated area in Turkey. In Uzbekistan <strong>on</strong>ly 11% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> total land<br />
area is arable but cott<strong>on</strong> occupies <str<strong>on</strong>g>the</str<strong>on</strong>g> most cultivable land in summer. A<br />
similar situati<strong>on</strong> exists in most o<str<strong>on</strong>g>the</str<strong>on</strong>g>r Central Asian countries <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> former<br />
Soviet Uni<strong>on</strong>. Cott<strong>on</strong> may be planted <strong>on</strong> a small percentage <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> arable land<br />
but it plays and important role in <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy <str<strong>on</strong>g>of</str<strong>on</strong>g> most IDB countries. The<br />
majority <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> African cott<strong>on</strong> growers are small-scale producers and most<br />
field operati<strong>on</strong>s are performed manually or by bullock tracti<strong>on</strong>. The<br />
governments in <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong> are under pressure to reform <str<strong>on</strong>g>the</str<strong>on</strong>g>ir cott<strong>on</strong><br />
industries. About 95% <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> from <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong> is exported.<br />
Central Asian countries are still changing <str<strong>on</strong>g>the</str<strong>on</strong>g> old system <str<strong>on</strong>g>of</str<strong>on</strong>g> “Kolkhoz” and<br />
adapting to <str<strong>on</strong>g>the</str<strong>on</strong>g> private land ownership system. Sudan operates <str<strong>on</strong>g>the</str<strong>on</strong>g> largest<br />
cooperative farm in <str<strong>on</strong>g>the</str<strong>on</strong>g> world with 1.2 milli<strong>on</strong> irrigated hectares c<strong>on</strong>trolled<br />
by a single management at <str<strong>on</strong>g>the</str<strong>on</strong>g> Gazira Scheme. Mali has slightly larger<br />
growers but in all o<str<strong>on</strong>g>the</str<strong>on</strong>g>r IDB member countries at least 70% <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> farms<br />
are less than five hectares in size. In spite <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> small farming systems,<br />
cott<strong>on</strong> producti<strong>on</strong> is mostly mechanized in all <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB member countries in<br />
Asia. Land holdings are small but facilities are available to hire machinery for<br />
specific field operati<strong>on</strong>s. All cott<strong>on</strong> is hand-picked in Africa. Central Asian<br />
countries used to machine-pick 80-90% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir producti<strong>on</strong> but now it has<br />
declined to about <strong>on</strong>e-third in <str<strong>on</strong>g>the</str<strong>on</strong>g> last 15 years. Extra-fine cott<strong>on</strong> produced in<br />
Egypt, Sudan, Turkmenistan and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r IDB member countries is not suitable<br />
for machine-picking. Scarcity <str<strong>on</strong>g>of</str<strong>on</strong>g> labor in Turkey is forcing <str<strong>on</strong>g>the</str<strong>on</strong>g> country to<br />
adopt machine-picking. It is estimated that almost 100 machines have already<br />
been imported into Turkey. Pakistan faced labor shortages during <str<strong>on</strong>g>the</str<strong>on</strong>g> 1980s<br />
but it does not seem to be a problem any more. No IDB member country<br />
o<str<strong>on</strong>g>the</str<strong>on</strong>g>r than Turkey is in <str<strong>on</strong>g>the</str<strong>on</strong>g> process <str<strong>on</strong>g>of</str<strong>on</strong>g> adopting machine-picking.<br />
Political, ec<strong>on</strong>omic and ecological c<strong>on</strong>diti<strong>on</strong>s vary am<strong>on</strong>g IDB member<br />
countries. IDB member countries produce <str<strong>on</strong>g>the</str<strong>on</strong>g> most irrigated cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
world and share many comm<strong>on</strong> approaches. However, a diversity <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
producti<strong>on</strong> systems in IDB member countries forces <str<strong>on</strong>g>the</str<strong>on</strong>g>m to face a variety <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
challenges. Challenges are regi<strong>on</strong> specific and also specific to countries.<br />
Major challenges can be grouped into producti<strong>on</strong> technology, instituti<strong>on</strong>al<br />
limitati<strong>on</strong>s, and financial limitati<strong>on</strong>s.<br />
20
1. Producti<strong>on</strong> Technology Limitati<strong>on</strong>s<br />
i. Input Supplies<br />
Cott<strong>on</strong> is a most resp<strong>on</strong>sive crop and it requires timely and optimum<br />
applicati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs, particularly fertilizers and insecticides. While most<br />
Asian countries have utilized <str<strong>on</strong>g>the</str<strong>on</strong>g> applicati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> fertilizers and insecticides in<br />
cott<strong>on</strong>, fertilizers and insecticides are not sufficiently available to cott<strong>on</strong><br />
growers in Africa. N<strong>on</strong>-availability <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs in <str<strong>on</strong>g>the</str<strong>on</strong>g> open market and lack <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
affordability to buy inputs are <str<strong>on</strong>g>the</str<strong>on</strong>g> main reas<strong>on</strong>s for low input use in Africa.<br />
The system is changing, though slowly, but <str<strong>on</strong>g>the</str<strong>on</strong>g> fact that cott<strong>on</strong> companies in<br />
West African countries are <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly suppliers <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs and <str<strong>on</strong>g>the</str<strong>on</strong>g> buyers <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> market has limited African growers to make proper use <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
fertilizers and pesticides. West and East African countries can improve <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
sustainability <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> by improving <str<strong>on</strong>g>the</str<strong>on</strong>g> input supply chain.<br />
Reforms are being implemented to modify <str<strong>on</strong>g>the</str<strong>on</strong>g> organizati<strong>on</strong>al structures <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
cott<strong>on</strong> industries in Benin, Togo and Ivory Coast, focusing particularly <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
partial privatizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> ginning and marketing operati<strong>on</strong>s. Mali is beginning<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> privatizati<strong>on</strong> process, and additi<strong>on</strong>al changes to industry structure in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
countries are inevitable. Accordingly, <str<strong>on</strong>g>the</str<strong>on</strong>g> input supply system is being<br />
decentralized, but <str<strong>on</strong>g>the</str<strong>on</strong>g> historical system based <strong>on</strong> nati<strong>on</strong>al cott<strong>on</strong> companies<br />
has not been replaced with an organized alternative, and many small holders<br />
are experiencing loss <str<strong>on</strong>g>of</str<strong>on</strong>g> access to quality inputs. African cott<strong>on</strong> growers need<br />
better access to fertilizers, pesticides and machinery.<br />
While African farmers have yet not realized <str<strong>on</strong>g>the</str<strong>on</strong>g> full use <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs, <str<strong>on</strong>g>the</str<strong>on</strong>g> Central<br />
Asian countries’ cott<strong>on</strong> growers have lost <str<strong>on</strong>g>the</str<strong>on</strong>g>ir access to inputs. The Central<br />
Asian countries shared almost 20% <str<strong>on</strong>g>of</str<strong>on</strong>g> world producti<strong>on</strong> in 1990/91, which<br />
has slowly declined to <strong>on</strong>ly 7% in 2003/04. Lower yields due to disturbance<br />
in <str<strong>on</strong>g>the</str<strong>on</strong>g> input supply systems affected area and <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a need to stop this trend.<br />
Most o<str<strong>on</strong>g>the</str<strong>on</strong>g>r Asian countries have optimized <str<strong>on</strong>g>the</str<strong>on</strong>g> use <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs but must restrain<br />
from excessive use.<br />
ii. Low Average Yield<br />
It is a comm<strong>on</strong> c<strong>on</strong>cern am<strong>on</strong>g all cott<strong>on</strong> producing countries <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world<br />
that <str<strong>on</strong>g>the</str<strong>on</strong>g> average yield <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> is not increasing. Many low yielding countries<br />
have a greater challenge to improve yield compared to those who have<br />
already surpassed <str<strong>on</strong>g>the</str<strong>on</strong>g> world average by 100% or even higher. In many IDB<br />
countries, yields have not increased for many years and <str<strong>on</strong>g>the</str<strong>on</strong>g>re are no<br />
21
indicati<strong>on</strong>s that <str<strong>on</strong>g>the</str<strong>on</strong>g>y will see an increase any time so<strong>on</strong>. It is a challenge for<br />
low yielding countries to come up with opti<strong>on</strong>s and soluti<strong>on</strong>s to improve<br />
yields that equal those <str<strong>on</strong>g>of</str<strong>on</strong>g> IDB member countries like Syria and Turkey.<br />
iii. High Cost <str<strong>on</strong>g>of</str<strong>on</strong>g> Producti<strong>on</strong><br />
The cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> c<strong>on</strong>tinues to increase in spite <str<strong>on</strong>g>of</str<strong>on</strong>g> n<strong>on</strong>-significant or<br />
even no increases in yields. All Central American countries had to stop cott<strong>on</strong><br />
producti<strong>on</strong> due to <str<strong>on</strong>g>the</str<strong>on</strong>g> fact that <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs, particularly insecticides,<br />
became too high and unaffordable. For a l<strong>on</strong>g time <str<strong>on</strong>g>the</str<strong>on</strong>g> increases in cost <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
producti<strong>on</strong> were compensated through increases in yields. Now, any increases<br />
in cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> are going to affect farmers’ income. Efficient cott<strong>on</strong><br />
producti<strong>on</strong> does not mean just higher yields, but higher yields at lower costs.<br />
Sustainable cott<strong>on</strong> producti<strong>on</strong> is a challenge for every cott<strong>on</strong> producing<br />
country and thus for IDB countries too.<br />
iv. Technology Transfer<br />
The technology transfer system in most IDB countries is obsolete. Training<br />
programs do not exist. Farmers must know <str<strong>on</strong>g>the</str<strong>on</strong>g> behavior <str<strong>on</strong>g>of</str<strong>on</strong>g> plants and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
reacti<strong>on</strong> to input use. Cott<strong>on</strong> producti<strong>on</strong> efficiency is low and inputs,<br />
whatever available, are not optimally used.<br />
2. Instituti<strong>on</strong>al Limitati<strong>on</strong>s<br />
i. Genetic Engineering <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> and O<str<strong>on</strong>g>the</str<strong>on</strong>g>r New Technologies<br />
Genetically engineered Biotech cott<strong>on</strong> has been approved for commercial<br />
producti<strong>on</strong> in Argentina, Australia, China (Mainland), Colombia, India,<br />
Ind<strong>on</strong>esia, Mexico, South Africa and <str<strong>on</strong>g>the</str<strong>on</strong>g> USA. It is estimated that Biotech<br />
cott<strong>on</strong> was planted <strong>on</strong> 21% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world total area and c<strong>on</strong>tributed 30% <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
world producti<strong>on</strong> in 2003/04 (Chaudhry 2004). Ind<strong>on</strong>esia is <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly IDB<br />
member country to approve genetically engineered Bt cott<strong>on</strong>, although it is<br />
not a large cott<strong>on</strong> producer and <strong>on</strong>ly 2-3 thousand hectares were planted to Bt<br />
varieties. Latest news indicates that M<strong>on</strong>santo may be closing its activities in<br />
Ind<strong>on</strong>esia. Burkina Faso is c<strong>on</strong>ducting trials but <str<strong>on</strong>g>the</str<strong>on</strong>g> government has not made<br />
a final decisi<strong>on</strong> <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> adopti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Biotech cott<strong>on</strong>. No o<str<strong>on</strong>g>the</str<strong>on</strong>g>r IDB member<br />
country is close to adopting Biotech cott<strong>on</strong>.<br />
The genetic engineering <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> is here to stay. One may be influenced by<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> aggressive adopti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> genetic engineering in <str<strong>on</strong>g>the</str<strong>on</strong>g> USA or by <str<strong>on</strong>g>the</str<strong>on</strong>g> over-<br />
22
cautious approach by <str<strong>on</strong>g>the</str<strong>on</strong>g> European countries, but <str<strong>on</strong>g>the</str<strong>on</strong>g> fact <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> matter is that<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> technology has many and l<strong>on</strong>g-term applicati<strong>on</strong>s. Genetic engineering is a<br />
basic science and <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a need to educate <str<strong>on</strong>g>the</str<strong>on</strong>g> public in this technology.<br />
More specifically, <str<strong>on</strong>g>the</str<strong>on</strong>g> technology can generate many products (like Bt cott<strong>on</strong>)<br />
and although a particular product could be deemed as being not good, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
whole technology cannot be blamed and discarded. Research to a limited<br />
extent is going <strong>on</strong> in some IDB member countries, more particularly in<br />
Egypt, Pakistan, Turkey and Uzbekistan. Egypt has developed drought<br />
resistant genotypes and Pakistan has developed geminiviruses resistant<br />
genotypes. Egypt has biosafety regulati<strong>on</strong>s in place. Private companies own<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> transgenes and countries cannot afford to launch <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own expensive<br />
research programs. Many IDB member countries are at cross roads <strong>on</strong><br />
whe<str<strong>on</strong>g>the</str<strong>on</strong>g>r or not and how to make use <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> genetic engineering technology.<br />
The technology is expensive and in <str<strong>on</strong>g>the</str<strong>on</strong>g> hands <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector. IDB<br />
member countries cannot take advantage <str<strong>on</strong>g>of</str<strong>on</strong>g> this technology that is already in<br />
use 1996/97. Biotechnology is just <strong>on</strong>e example, but it will be repeated with<br />
any new products developed by this technology or any new technology<br />
developed outside <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB member countries.<br />
ii. Promoti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong><br />
Cott<strong>on</strong> prices, like any o<str<strong>on</strong>g>the</str<strong>on</strong>g>r commodity, are determined by supply and<br />
demand. Producing countries are working to increase supply and have d<strong>on</strong>e<br />
so successfully in <str<strong>on</strong>g>the</str<strong>on</strong>g> past by increasing producti<strong>on</strong> from 6.7 milli<strong>on</strong> t<strong>on</strong>s in<br />
1950/51 to 20.2 milli<strong>on</strong> t<strong>on</strong>s in 2003/04. All <str<strong>on</strong>g>the</str<strong>on</strong>g> increases have come from<br />
increases in yields. During <str<strong>on</strong>g>the</str<strong>on</strong>g> same time, c<strong>on</strong>sumpti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> has also<br />
increased at <str<strong>on</strong>g>the</str<strong>on</strong>g> same pace, but <str<strong>on</strong>g>the</str<strong>on</strong>g>re have been no increases in prices in real<br />
terms. Today’s prices are in fact lower in real terms than 30 years ago. In<br />
order to enhance demand for cott<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a need to promote cott<strong>on</strong> as an<br />
envir<strong>on</strong>mentally-friendly and comfortable fiber. Studies show that those<br />
countries that have implemented cott<strong>on</strong> promoti<strong>on</strong> programs have<br />
successfully enhanced <str<strong>on</strong>g>the</str<strong>on</strong>g> share <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> am<strong>on</strong>g fibers c<strong>on</strong>sumed at <str<strong>on</strong>g>the</str<strong>on</strong>g> end<br />
use level in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir countries. It is in <str<strong>on</strong>g>the</str<strong>on</strong>g> interest <str<strong>on</strong>g>of</str<strong>on</strong>g> producing countries to<br />
initiate demand enhancement programs and reverse <str<strong>on</strong>g>the</str<strong>on</strong>g> trend <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>’s<br />
share being swallowed by syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fibers.<br />
iii. Instrument Based Fiber Quality Testing<br />
The price <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> is determined by quality. The first and most important<br />
message from <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning industry is a guarantee that <str<strong>on</strong>g>the</str<strong>on</strong>g>y get what <str<strong>on</strong>g>the</str<strong>on</strong>g>y<br />
buy. If a seller can assure that <str<strong>on</strong>g>the</str<strong>on</strong>g> quality characteristics given at <str<strong>on</strong>g>the</str<strong>on</strong>g> time <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
signing <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>tract will be truly repeated at <str<strong>on</strong>g>the</str<strong>on</strong>g> mill, <str<strong>on</strong>g>the</str<strong>on</strong>g> spinners are ready to<br />
23
pay higher prices. Traditi<strong>on</strong>al manual classing/evaluati<strong>on</strong> is incapable <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
providing such high c<strong>on</strong>fidence to <str<strong>on</strong>g>the</str<strong>on</strong>g> spinner. Producers in more countries<br />
are expanding <str<strong>on</strong>g>the</str<strong>on</strong>g> use <str<strong>on</strong>g>of</str<strong>on</strong>g> instrument testing. Cott<strong>on</strong> is being classed <strong>on</strong> highspeed<br />
instruments in many countries and many more are adopting <str<strong>on</strong>g>the</str<strong>on</strong>g>m. The<br />
government <str<strong>on</strong>g>of</str<strong>on</strong>g> Brazil requires that cott<strong>on</strong> be evaluated <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> basis <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Universal Standards and Brazil will eventually class all cott<strong>on</strong> with<br />
instrument-based systems. China (Mainland) is working <strong>on</strong> an ambitious plan<br />
to reform its classing and grading system for cott<strong>on</strong>, and has asked <str<strong>on</strong>g>the</str<strong>on</strong>g> USDA<br />
for assistance in establishing a reliable cott<strong>on</strong> classing system. Over 1,700<br />
high-speed machines, mostly from Uster Technologies, Inc. are already<br />
working in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. Two more companies, <strong>on</strong>e each in India and Israel, are<br />
aggressively working <strong>on</strong> high-speed machines, equivalent to HVI (high<br />
volume instrument), for efficient and reliable fiber quality testing. IDB<br />
member countries have to change <str<strong>on</strong>g>the</str<strong>on</strong>g> classing systems and adopt machine<br />
based efficient methods that provide detailed informati<strong>on</strong> <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> qualitative<br />
value <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>y produce.<br />
iv. Shift in <str<strong>on</strong>g>the</str<strong>on</strong>g> World Trade: An Opportunity for IDB<br />
The lifting <str<strong>on</strong>g>of</str<strong>on</strong>g> quota sancti<strong>on</strong>s in 2005 will bring many changes to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
internati<strong>on</strong>al cott<strong>on</strong> trade. The eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> quotas will accelerate <str<strong>on</strong>g>the</str<strong>on</strong>g> shift<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> textile manufacturing to countries with lower textile manufacturing costs.<br />
Countries who now produce or are able to c<strong>on</strong>tinue producing at a lower cost<br />
will grab a major share from industrialized and developing countries where<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> textile producti<strong>on</strong> is higher. The internati<strong>on</strong>al cott<strong>on</strong> trade will<br />
experience major shifts, as some countries will lose <str<strong>on</strong>g>the</str<strong>on</strong>g>ir share while o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs<br />
will be able to add to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir share in <str<strong>on</strong>g>the</str<strong>on</strong>g> trade. The indicati<strong>on</strong>s are that, outside<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> IDB member countries, China (Mainland) and India are going to be at an<br />
advantage after January 2005 when <str<strong>on</strong>g>the</str<strong>on</strong>g> quota systems disappear. Similarly,<br />
indicati<strong>on</strong>s <strong>on</strong> which countries are expected to lose <str<strong>on</strong>g>the</str<strong>on</strong>g>ir share are also clear.<br />
The USA is <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> top <str<strong>on</strong>g>of</str<strong>on</strong>g> such countries that are expected to reduce <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
share in <str<strong>on</strong>g>the</str<strong>on</strong>g> world textile trade. High cost <str<strong>on</strong>g>of</str<strong>on</strong>g> labor and processing at mills has<br />
already drastically reduced c<strong>on</strong>sumpti<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> USA, and liberalizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
trade is going to affect <str<strong>on</strong>g>the</str<strong>on</strong>g> industry more vigorously. January 1, 2005 is not<br />
far but efforts are still being made to delay or propose a complete<br />
replacement <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> quota systems. In <str<strong>on</strong>g>the</str<strong>on</strong>g> name <str<strong>on</strong>g>of</str<strong>on</strong>g> fair trade in textiles and<br />
clothing, some countries are calling <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> World Trade Organizati<strong>on</strong> (WTO)<br />
to push back <str<strong>on</strong>g>the</str<strong>on</strong>g> phase-out <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> quota systems or eliminate <str<strong>on</strong>g>the</str<strong>on</strong>g> 10-year<br />
phase-out agreed by GATT in 1995. They may or may not be successful, but<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> issue is how far are IDB countries prepared to go in dealing with a quota<br />
free marketing system in textiles and clothing.<br />
24
v. Lack <str<strong>on</strong>g>of</str<strong>on</strong>g> Communicati<strong>on</strong><br />
IDB member countries can learn from each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r’s experiences but <str<strong>on</strong>g>the</str<strong>on</strong>g>re is<br />
no system to bring <str<strong>on</strong>g>the</str<strong>on</strong>g>m toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r. Countries do not know what is happening<br />
even in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir neighboring countries. In almost all countries, no nati<strong>on</strong>al cott<strong>on</strong><br />
c<strong>on</strong>ferences are held and various segments <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry never get a<br />
chance to sit toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r and exchange notes. There is a need to improve<br />
communicati<strong>on</strong> am<strong>on</strong>g all segments <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry within each<br />
country and across countries.<br />
vi. Lack <str<strong>on</strong>g>of</str<strong>on</strong>g> Cooperative Systems<br />
The vast majority <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> growers in IDB countries are small-scale growers<br />
who do not enjoy bargaining leverage in selling <str<strong>on</strong>g>the</str<strong>on</strong>g>ir produce. Inputs are<br />
purchased individually thus <str<strong>on</strong>g>the</str<strong>on</strong>g>y end up paying higher prices. Farmers could<br />
group toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r for buying inputs and selling <str<strong>on</strong>g>the</str<strong>on</strong>g>ir produce.<br />
vii. Lack <str<strong>on</strong>g>of</str<strong>on</strong>g> Marketing Informati<strong>on</strong><br />
Cott<strong>on</strong> growers in many IDB member countries receive a price that has been<br />
fixed m<strong>on</strong>ths in advance and before planting, and although prices may<br />
fluctuate <str<strong>on</strong>g>the</str<strong>on</strong>g>y receive <str<strong>on</strong>g>the</str<strong>on</strong>g> set price. In o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries where farmers sell <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
produce <str<strong>on</strong>g>the</str<strong>on</strong>g>mselves, <str<strong>on</strong>g>the</str<strong>on</strong>g>y might not get a good price because <str<strong>on</strong>g>the</str<strong>on</strong>g>y never study<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> prices <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> country. Also, quality incentives are almost n<strong>on</strong>existent.<br />
Growers sell seedcott<strong>on</strong>, which in many countries is not graded.<br />
Varieties are mixed by farmers, <str<strong>on</strong>g>the</str<strong>on</strong>g>n by middlemen before seedcott<strong>on</strong> reaches<br />
a gin.<br />
viii. Low Private Sector Participati<strong>on</strong><br />
Almost all research <strong>on</strong> cott<strong>on</strong> in IDB member countries is carried out by<br />
public sector institutes entirely funded by governments. IDB countries<br />
seriously lack effective regulatory and enforcement systems in R&D<br />
programs to protect and stimulate private sector investing in technological<br />
research. The amount <str<strong>on</strong>g>of</str<strong>on</strong>g> private research reported in IDB cott<strong>on</strong>-producing<br />
countries is very limited, leading to a reduced capacity <str<strong>on</strong>g>of</str<strong>on</strong>g> R&D. The public<br />
sector m<strong>on</strong>opolizes many issues and <str<strong>on</strong>g>the</str<strong>on</strong>g> lack <str<strong>on</strong>g>of</str<strong>on</strong>g> competiti<strong>on</strong> slows down <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
development process.<br />
25
3. Financial Limitati<strong>on</strong>s<br />
i. Lack <str<strong>on</strong>g>of</str<strong>on</strong>g> Credit Facilities<br />
Cott<strong>on</strong> is not an intensive crop like vegetables, yet it requires more pesticides<br />
than o<str<strong>on</strong>g>the</str<strong>on</strong>g>r field crops. It is a cash crop but <str<strong>on</strong>g>the</str<strong>on</strong>g> cropping systems are such that<br />
when planting time comes, most farmers have already spent <str<strong>on</strong>g>the</str<strong>on</strong>g> m<strong>on</strong>ey made<br />
from cott<strong>on</strong>. When farmers do not have adequate access to credit facilities,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> crop suffers due to pest attack and lower than adequate input applicati<strong>on</strong>s.<br />
ii. Private Sector Investment<br />
Research is c<strong>on</strong>ducted and dominated by <str<strong>on</strong>g>the</str<strong>on</strong>g> public sector. Agricultural<br />
research is a l<strong>on</strong>g-term investment for which <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector has no<br />
incentive. The private sector needs some kind <str<strong>on</strong>g>of</str<strong>on</strong>g> assurance from governments<br />
that <str<strong>on</strong>g>the</str<strong>on</strong>g>ir m<strong>on</strong>ey is secure and that no sudden policy changes will affect <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
investment.<br />
iii. Scarcity <str<strong>on</strong>g>of</str<strong>on</strong>g> Funding for Research<br />
Most research institutes are under-funded; <str<strong>on</strong>g>the</str<strong>on</strong>g>ir budget is mostly spent to<br />
meet salaries and very little is actually left for real research. Institutes are not<br />
able to initiate new research programs due to budget limitati<strong>on</strong>s.<br />
iv. Bureaucratic Procedures<br />
Funds are limited but it has been seen that sometimes, even when funds are<br />
available from n<strong>on</strong>-governmental sources, researchers cannot make use <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>m due to lengthy bureaucratic procedures. The l<strong>on</strong>g bureaucratic<br />
procedures also limit participati<strong>on</strong> in regi<strong>on</strong>al and internati<strong>on</strong>al events.<br />
Major challenges/limitati<strong>on</strong>s are:<br />
1. Producti<strong>on</strong> technology limitati<strong>on</strong>s - Input supplies in West Africa, low<br />
average yields, high cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> and obsolete way <str<strong>on</strong>g>of</str<strong>on</strong>g> technology<br />
transfer.<br />
2. Instituti<strong>on</strong>al limitati<strong>on</strong>s – <strong>Development</strong>/adopti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> new technologies, lower<br />
demand for cott<strong>on</strong>, fiber quality evaluati<strong>on</strong>, lack <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
communicati<strong>on</strong>s/cooperati<strong>on</strong> and marketing informati<strong>on</strong>.<br />
3. Financial limitati<strong>on</strong>s – Poor credit facilities, lesser private sector<br />
participati<strong>on</strong>, n<strong>on</strong>-availability <str<strong>on</strong>g>of</str<strong>on</strong>g> funding for research and bureaucratic<br />
procedure.<br />
26
III. CURRENT COTTON POLICIES IN RICH COUNTRIES AND<br />
THEIR EFFECTS ON IDB COTTON PRODUCING COUNTRIES<br />
Cott<strong>on</strong> policies <str<strong>on</strong>g>of</str<strong>on</strong>g> not <strong>on</strong>ly rich but also <str<strong>on</strong>g>of</str<strong>on</strong>g> developing major cott<strong>on</strong><br />
producing countries that have an effect <strong>on</strong> IDB member countries are<br />
discussed in this secti<strong>on</strong>. Policies in some IDB member countries also affect<br />
fellow member countries, but <str<strong>on</strong>g>the</str<strong>on</strong>g> impact is minimum compared to that <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries discussed here. Because policies in most countries are not<br />
similar, <str<strong>on</strong>g>the</str<strong>on</strong>g>y are discussed country by country. However, a comm<strong>on</strong> c<strong>on</strong>cern<br />
in many countries regarding government payments to cott<strong>on</strong> producers in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
form <str<strong>on</strong>g>of</str<strong>on</strong>g> direct cash is discussed first.<br />
1. Government Payments <strong>on</strong> Cott<strong>on</strong> Producti<strong>on</strong><br />
Many governments, including some IDB member governments, provide<br />
direct support to cott<strong>on</strong> producti<strong>on</strong> in various forms, <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> which, comm<strong>on</strong><br />
in many countries, is government support to cott<strong>on</strong> research programs or<br />
extensi<strong>on</strong> services. Developing countries used to subsidize inputs, which has<br />
been mostly eliminated. Many countries used to impose duties <strong>on</strong> imports or<br />
exports <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>, but most duties were d<strong>on</strong>e away with by 1991. Thus, since<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> initiati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> most tariffs in 1958, <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry has realized <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
damage caused by <str<strong>on</strong>g>the</str<strong>on</strong>g>se tariffs and has slowly been working towards getting<br />
rid <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>se distorting factors. However, while direct subsidies <strong>on</strong> inputs and<br />
tariffs have been reduced and some even eliminated, particularly after 1990<br />
as a result <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> GATT agreement, <str<strong>on</strong>g>the</str<strong>on</strong>g> issue <str<strong>on</strong>g>of</str<strong>on</strong>g> direct payments has become<br />
more serious.<br />
ICAC has d<strong>on</strong>e extensive work <strong>on</strong> government measures that have distorting<br />
effects <strong>on</strong> cott<strong>on</strong> producti<strong>on</strong> in many countries. According to <str<strong>on</strong>g>the</str<strong>on</strong>g> ICAC,<br />
direct income and price support provided to <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry by various<br />
governments amounted to US$4.8 billi<strong>on</strong> in 2002/03 and US$5.8 billi<strong>on</strong> in<br />
2001/02. Direct support declined in 2002/03 due to lower producti<strong>on</strong> in<br />
subsidizing countries and higher internati<strong>on</strong>al prices, and not due to lower<br />
subsidies. Eight countries <str<strong>on</strong>g>of</str<strong>on</strong>g>fered direct income and price support in 2002/03,<br />
ranging from US$1.3 billi<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> USA to $7 milli<strong>on</strong> in Mexico. Emergency<br />
support provided by six developing countries in 2002/03 is being<br />
disc<strong>on</strong>tinued in 2003/04 (ICAC 2003b).<br />
27
The governments <str<strong>on</strong>g>of</str<strong>on</strong>g> most cott<strong>on</strong> producing countries are heavily involved in<br />
cott<strong>on</strong> producti<strong>on</strong> and marketing issues. Government policies and programs<br />
affect <str<strong>on</strong>g>the</str<strong>on</strong>g> locati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong>, c<strong>on</strong>sumpti<strong>on</strong>, and prices. These<br />
policies can be grouped into four broad categories:<br />
• Policies designed to boost farm income while interfering as little as<br />
possible with <str<strong>on</strong>g>the</str<strong>on</strong>g> level <str<strong>on</strong>g>of</str<strong>on</strong>g> market prices.<br />
• Policies designed to c<strong>on</strong>trol <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector through extensive state<br />
regulati<strong>on</strong>.<br />
• Policies designed to manage domestic cott<strong>on</strong> prices in order to boost<br />
exports <str<strong>on</strong>g>of</str<strong>on</strong>g> textiles and apparel.<br />
• Free market policies.<br />
2. Export Subsidies<br />
The sec<strong>on</strong>d form <str<strong>on</strong>g>of</str<strong>on</strong>g> direct subsidies that have an impact <strong>on</strong> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries<br />
growers’ cott<strong>on</strong> prices is a price subsidy <strong>on</strong> cott<strong>on</strong> exported. In <str<strong>on</strong>g>the</str<strong>on</strong>g> USA,<br />
local cott<strong>on</strong> c<strong>on</strong>sumers are also compensated. The USA and China<br />
(Mainland) provided subsidies to exports in 2002/03 and 2003/04. Overall<br />
assistance in <str<strong>on</strong>g>the</str<strong>on</strong>g> two countries combined reached $316 milli<strong>on</strong> in 2002/03<br />
and is expected to decline to US$160 milli<strong>on</strong> in 2003/04. Exports are<br />
subsidized in China (Mainland) through direct payments designed to cover<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> buying, ginning and transporting cott<strong>on</strong> to an export locati<strong>on</strong>.<br />
Assistance in <str<strong>on</strong>g>the</str<strong>on</strong>g> USA is provided through <str<strong>on</strong>g>the</str<strong>on</strong>g> Step 2 program <str<strong>on</strong>g>of</str<strong>on</strong>g>fered to both<br />
exporters and domestic c<strong>on</strong>sumers <str<strong>on</strong>g>of</str<strong>on</strong>g> raw cott<strong>on</strong>. In 2002/03, <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S.<br />
government disbursed $266 milli<strong>on</strong> to exporters, and 2003/04 payments to<br />
exporters are estimated to decline to US$148 milli<strong>on</strong>. The average assistance<br />
per pound exported by <str<strong>on</strong>g>the</str<strong>on</strong>g> USA is expected to decline from 5 U.S. cents per<br />
pound in 2002/03 to 2 cents per pound in 2003/04. The Step 2 program<br />
covers upland cott<strong>on</strong>, and exports <str<strong>on</strong>g>of</str<strong>on</strong>g> U.S. Pima are covered by a separate<br />
program through which $33 milli<strong>on</strong> were paid to exporters in 2002/03. Direct<br />
government support in different countries is given in Table 1.<br />
28
Table 1. Direct Assistance Provided by Governments to <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong><br />
Sector Through Producti<strong>on</strong> Programs*<br />
2001/02 2002/03 2003/04**<br />
Av. Assistance<br />
Av. Assistance<br />
Av. Assistance<br />
Producti<strong>on</strong> Assistance to Producti<strong>on</strong> Assistance to Producti<strong>on</strong> Assistance to<br />
(1,000 per Pound Producti<strong>on</strong> (1,000 t<strong>on</strong>s) per Pound Producti<strong>on</strong> (1,000 t<strong>on</strong>s) per Pound Producti<strong>on</strong><br />
Country T<strong>on</strong>s) (US cents) (US$ milli<strong>on</strong>) (US cents) (US$ milli<strong>on</strong>) (US cents) (US$ milli<strong>on</strong>)<br />
USA<br />
China<br />
4,420 31 3,001 3,747 23 1,941 3,975 10 877<br />
(Mainland) 5,320 10 1,196 4,916 17 1,850 4,870 15 1,585<br />
Greece 435 77 735 375 87 718 330 94 687<br />
Spain 107 104 245 100 108 239 95 104 218<br />
Turkey 922 3 59 900 3 57 900 1 22<br />
Egypt 317 3 23 170 9 33<br />
Mexico 92 9 18 41 8 7 68 4 6<br />
Côte<br />
d’lvoire<br />
173 2 8<br />
India 2,686 8 500<br />
Benin 172 5 20<br />
Mali 240 3 14<br />
Brazil 766 1 10<br />
Colombia 26 16 9<br />
Argentina 65 5 7<br />
All<br />
countries:<br />
15,741 17 5,845 10,249 21 4,845 3,395<br />
*Income and Price support programs <strong>on</strong>ly. Credit and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r assistance not included.<br />
**Preliminary<br />
Source: 1. Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee (2003b).<br />
2. Attachment I to SC-N-473, A report presented to 473 meeting <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Standing Committee <str<strong>on</strong>g>of</str<strong>on</strong>g> ICAC, May 18, 2004.<br />
Country<br />
Table 2. Direct Assistance Provided by Governments to <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong><br />
Sector Through Export Programs<br />
2001/02 2002/03 2003/04*<br />
Av. Assistance<br />
Av. Assistance<br />
Av.<br />
Exports Assistance to Exports Assistance to Exports Assistance Assistance t<br />
(1,000 t<strong>on</strong>s) per Pound Exports (1,000 t<strong>on</strong>s) per Pound Exports (1,000 t<strong>on</strong>s) per Pound Exports<br />
(US cents) (US$ milli<strong>on</strong>) (US cents) (US$ milli<strong>on</strong>) (US cents) (US$ milli<strong>on</strong>)<br />
USA<br />
China<br />
2,395 2 100 2,591 5 266 3,000 2 148<br />
(Mainland) 74 13 21 164 14 50 40 14 12<br />
Total: 2,469 2 121 2,755 5 316 3,040 2 160<br />
*Preliminary<br />
Source:1. Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee (2003b).<br />
2. Attachment I to SC-N-473, A report presented to 473 meeting <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Standing Committee <str<strong>on</strong>g>of</str<strong>on</strong>g> ICAC, May 18, 2004.<br />
USA<br />
On average, about five milli<strong>on</strong> hectares are planted <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> USA<br />
every year. Significant shifts in area can occur from year to year mostly<br />
depending <strong>on</strong> cott<strong>on</strong> prices. About <strong>on</strong>e third <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> total area is irrigated; all<br />
29
cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> West where yields are <str<strong>on</strong>g>the</str<strong>on</strong>g> highest is irrigated. More recently, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
U.S. government has divided <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> producing areas into five different<br />
levels <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> practices ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than <str<strong>on</strong>g>the</str<strong>on</strong>g> traditi<strong>on</strong>al four geographical<br />
regi<strong>on</strong>s. Cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> USA is <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> highest in <str<strong>on</strong>g>the</str<strong>on</strong>g> world<br />
ranging from US$1.32 per kg to US$1.75 per kg with a nati<strong>on</strong>al average <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
US$1.5 per kg <str<strong>on</strong>g>of</str<strong>on</strong>g> lint. About 25,000 farmers are involved in cott<strong>on</strong><br />
producti<strong>on</strong>. In additi<strong>on</strong>, 76% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> area was planted to transgenic varieties in<br />
2003/04, all developed by <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector (Chaudhry 2004).<br />
Farmers heavily depend <strong>on</strong> government support programs to c<strong>on</strong>tinue<br />
producing cott<strong>on</strong>. Total expenditures by <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. government in support <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry amounted to $3.3 billi<strong>on</strong> in 2001/02, <str<strong>on</strong>g>of</str<strong>on</strong>g> which direct<br />
income and price support was $3 billi<strong>on</strong>. U.S government support is<br />
estimated to have declined to $3.2 billi<strong>on</strong> in 2002/03. A new farm bill became<br />
effective in 2002/03, and will expire in 2007/08. The 2002 farm bill replaced<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> flexibility c<strong>on</strong>tract payments (PFC) with a direct payment<br />
(DP) and a counter-cyclical payment (CP). Both payments are based <strong>on</strong><br />
historical planted area and yield, ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than actual producti<strong>on</strong>. DPs are<br />
independent <str<strong>on</strong>g>of</str<strong>on</strong>g> market prices and are set at 6.67 U.S. cents per pound. CPs<br />
are issued when <str<strong>on</strong>g>the</str<strong>on</strong>g> effective price is below <str<strong>on</strong>g>the</str<strong>on</strong>g> target price. The effective<br />
price is <str<strong>on</strong>g>the</str<strong>on</strong>g> DP plus <str<strong>on</strong>g>the</str<strong>on</strong>g> higher <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al average market price paid to<br />
producers or <str<strong>on</strong>g>the</str<strong>on</strong>g> loan rate. The loan rate is set at 52 U.S cents per pound and<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> target price is 72.4 U.S. cents per pound. The loan deficiency payment<br />
(LDP)—issued when world prices adjusted by quality and locati<strong>on</strong> are below<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> loan rate—-c<strong>on</strong>tinues to be <str<strong>on</strong>g>of</str<strong>on</strong>g>fered in <str<strong>on</strong>g>the</str<strong>on</strong>g> 2002 farm bill. It is estimated<br />
that total direct income and price support in <str<strong>on</strong>g>the</str<strong>on</strong>g> USA amounted to US$2<br />
billi<strong>on</strong> in 2002/03. For Pima, <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. government announced an export<br />
subsidy <str<strong>on</strong>g>of</str<strong>on</strong>g> 22 U.S. cents per pound <strong>on</strong> 5th April 2004 (Valderrama 2004).<br />
Subsidies in <str<strong>on</strong>g>the</str<strong>on</strong>g> USA have been as high as 47 cents per pound <str<strong>on</strong>g>of</str<strong>on</strong>g> upland cott<strong>on</strong>,<br />
<strong>on</strong>ce in 1986 and again in 2000. The average subsidy per pound between 1980<br />
and 2002 was 19 cents per pound. The average U.S. upland cott<strong>on</strong> farm price<br />
over those years was 59 cents per pound. Thus, <strong>on</strong> average, <str<strong>on</strong>g>the</str<strong>on</strong>g> program<br />
benefits accounted for <strong>on</strong>e-third <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> farm value <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong>. Internati<strong>on</strong>al<br />
organizati<strong>on</strong>s and governments <str<strong>on</strong>g>the</str<strong>on</strong>g>mselves have studied <str<strong>on</strong>g>the</str<strong>on</strong>g> impact <str<strong>on</strong>g>of</str<strong>on</strong>g> U.S.<br />
subsidy programs <strong>on</strong> internati<strong>on</strong>al prices and c<strong>on</strong>cluded that <str<strong>on</strong>g>the</str<strong>on</strong>g> massive cott<strong>on</strong><br />
subsidy program <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. government depresses internati<strong>on</strong>al prices. The<br />
U.S.'s 25,000 cott<strong>on</strong> farmers c<strong>on</strong>trol more than 40% <str<strong>on</strong>g>of</str<strong>on</strong>g> global cott<strong>on</strong> exports<br />
and affect milli<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> small-scale growers in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries. The West African<br />
countries have raised <str<strong>on</strong>g>the</str<strong>on</strong>g> issue at internati<strong>on</strong>al forums, but a most recent<br />
success came from <str<strong>on</strong>g>the</str<strong>on</strong>g> acti<strong>on</strong> initiated by Brazil at <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO, where it argued<br />
that <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. subsidy program leads to over-supply <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> world,<br />
30
which in turn depresses world cott<strong>on</strong> prices. The program is spreading rural<br />
unemployment and poverty in Africa and elsewhere, including IDB cott<strong>on</strong>producing<br />
countries. On April 26, 2004, a panel <str<strong>on</strong>g>of</str<strong>on</strong>g> WTO trade judges called <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
U.S. cott<strong>on</strong> subsidy illegal. The decisi<strong>on</strong> was well received across <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
developing world but <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. has appealed <str<strong>on</strong>g>the</str<strong>on</strong>g> decisi<strong>on</strong>.<br />
China (Mainland)<br />
Cott<strong>on</strong> is grown in three regi<strong>on</strong>s, <str<strong>on</strong>g>the</str<strong>on</strong>g> Yellow River Valley, <str<strong>on</strong>g>the</str<strong>on</strong>g> Yangtze Valley<br />
and <str<strong>on</strong>g>the</str<strong>on</strong>g> Xinjiang regi<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> northwest. Cott<strong>on</strong> was planted <strong>on</strong> 5.0 milli<strong>on</strong><br />
hectares and <str<strong>on</strong>g>the</str<strong>on</strong>g> average yield was <strong>on</strong>e t<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> lint per hectare in 2003/04.<br />
Average yields in China (Mainland) have been over <strong>on</strong>e t<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> lint since<br />
1997/98. Yields are higher in <str<strong>on</strong>g>the</str<strong>on</strong>g> Xinjiang regi<strong>on</strong> as it is a new cott<strong>on</strong> area and<br />
pest pressure is still low. The Yellow River Valley was worse hit by<br />
Helicoverpa armigera as it became resistant to many insecticide groups. The<br />
government implemented a vigorous integrated pest management program to<br />
overcome <str<strong>on</strong>g>the</str<strong>on</strong>g> resistance problem that affected yields. Transgenic Bt cott<strong>on</strong><br />
from M<strong>on</strong>santo with <str<strong>on</strong>g>the</str<strong>on</strong>g> Bt gene Cry 1Ab, and local transgenic cott<strong>on</strong> resistant<br />
to bollworms helped to tackle <str<strong>on</strong>g>the</str<strong>on</strong>g> problem. Area under genetically engineered<br />
cott<strong>on</strong> reached 58% in 2003/04. Cott<strong>on</strong> is heavily fertilized and most operati<strong>on</strong>s<br />
are performed manually as each farmer owns <strong>on</strong>ly 1/15 <str<strong>on</strong>g>of</str<strong>on</strong>g> a hectare. All cott<strong>on</strong><br />
is picked by hand and picking is clean. Every year China (Mainland) is ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> largest or <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d largest producer <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> world.<br />
China (Mainland) has a significant impact <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> world cott<strong>on</strong> industry in many<br />
ways. ICAC’s work for many years shows that China (Mainland) is <str<strong>on</strong>g>the</str<strong>on</strong>g> single<br />
country with <str<strong>on</strong>g>the</str<strong>on</strong>g> most significant effect <strong>on</strong> world cott<strong>on</strong> prices. The analysis<br />
shows that when China (Mainland) is an importing country, internati<strong>on</strong>al prices<br />
are higher. In years when China (Mainland) exports, cott<strong>on</strong> internati<strong>on</strong>al prices<br />
tend to remain low. Based <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>se c<strong>on</strong>clusi<strong>on</strong>s, countries could plan <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
programs, but extensive informati<strong>on</strong> is not available from China (Mainland),<br />
which hinders countries to plan <str<strong>on</strong>g>the</str<strong>on</strong>g>ir programs properly. China (Mainland)<br />
produces cott<strong>on</strong> at <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> lowest costs in <str<strong>on</strong>g>the</str<strong>on</strong>g> world, partly because <str<strong>on</strong>g>the</str<strong>on</strong>g>re is<br />
no ginning cost, which is free from <str<strong>on</strong>g>the</str<strong>on</strong>g> government. The low cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong><br />
coupled with subsidies <strong>on</strong> local c<strong>on</strong>sumpti<strong>on</strong> and exports put Chinese cott<strong>on</strong><br />
growers at an advantage over growers in IDB cott<strong>on</strong>-producing countries and<br />
elsewhere. Lower cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> and higher returns encourage farmers to<br />
produce more and more cott<strong>on</strong>. Even during years like 2001/02, when cott<strong>on</strong><br />
prices were at <str<strong>on</strong>g>the</str<strong>on</strong>g>ir lowest level in 30 years, China (Mainland) increased its<br />
producti<strong>on</strong> to 5.3 milli<strong>on</strong> t<strong>on</strong>s (ICAC 2003c).<br />
31
One more way China (Mainland) affects IDB member countries is <str<strong>on</strong>g>the</str<strong>on</strong>g> role <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
government in maintaining prices at a certain level. Since September 1999, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
new policies in China (Mainland) allow domestic cott<strong>on</strong> prices to be<br />
determined by market factors. The government will set a reference price for<br />
cott<strong>on</strong>, but <str<strong>on</strong>g>the</str<strong>on</strong>g> actual price is negotiated between <str<strong>on</strong>g>the</str<strong>on</strong>g> buyer and <str<strong>on</strong>g>the</str<strong>on</strong>g> seller.<br />
Government programs are managed in such a way that domestic prices remain<br />
above internati<strong>on</strong>al prices. Restricti<strong>on</strong>s <strong>on</strong> cott<strong>on</strong> imports is <strong>on</strong>e such measure<br />
that keeps local prices above internati<strong>on</strong>al prices.<br />
European Uni<strong>on</strong><br />
Greece and Spain are <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly two EU countries that grow cott<strong>on</strong>. Cott<strong>on</strong> was<br />
planted <strong>on</strong> 368,000 hectares in Greece and 94,000 hectares in Spain in 2003/04.<br />
Producti<strong>on</strong> is highly mechanized and 90-95% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> total area has assured<br />
irrigati<strong>on</strong>, mostly sprinkler and drip irrigati<strong>on</strong>. Farming operati<strong>on</strong>s are not large<br />
and two-thirds <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers plant cott<strong>on</strong> <strong>on</strong> less that 10 hectares. Most cott<strong>on</strong> is<br />
machine-picked and <str<strong>on</strong>g>the</str<strong>on</strong>g> average yield in both countries has been more than <strong>on</strong>e<br />
t<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> lint per hectare for <str<strong>on</strong>g>the</str<strong>on</strong>g> last five years. Greece has been producing higher<br />
yields for many years now.<br />
Cott<strong>on</strong> growers in Spain and Greece are <str<strong>on</strong>g>of</str<strong>on</strong>g>fered assistance through <str<strong>on</strong>g>the</str<strong>on</strong>g> EU<br />
Comm<strong>on</strong> Agricultural Policy (CAP). Payments under <str<strong>on</strong>g>the</str<strong>on</strong>g> Comm<strong>on</strong> Agricultural<br />
Policy are based <strong>on</strong> estimated seedcott<strong>on</strong> producti<strong>on</strong>. CAP <str<strong>on</strong>g>of</str<strong>on</strong>g>fers assistance for<br />
a maximum producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> 782,000 t<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> seedcott<strong>on</strong> for Greece and 249,000<br />
t<strong>on</strong>s for Spain, and includes penalties for excess producti<strong>on</strong>. The cott<strong>on</strong><br />
growing regi<strong>on</strong>s in Spain and Greece are am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> lowest-income regi<strong>on</strong>s in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> EU, and income support is viewed as a form <str<strong>on</strong>g>of</str<strong>on</strong>g> ec<strong>on</strong>omic assistance.<br />
Income support in <str<strong>on</strong>g>the</str<strong>on</strong>g> EU amounted to US$979 milli<strong>on</strong> in 2001/02 and US$957<br />
milli<strong>on</strong> in 2002/03, and estimated at US$905 milli<strong>on</strong> in 2003/04 (ICAC 2003b).<br />
The streng<str<strong>on</strong>g>the</str<strong>on</strong>g>ning <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Euro over <str<strong>on</strong>g>the</str<strong>on</strong>g> last two years has affected EU support<br />
expressed in U.S. dollars. The ICAC Secretariat estimates suggest that <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
average benefit per pound <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> during <str<strong>on</strong>g>the</str<strong>on</strong>g> last six seas<strong>on</strong>s has been 77<br />
cents compared with an average market price <str<strong>on</strong>g>of</str<strong>on</strong>g> 56 cents per pound for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
same period. Thus, benefits to cott<strong>on</strong> in Greece and Spain averaged 46 cents<br />
per kg, or 37%, over and above <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Outlook A Index.<br />
India<br />
India is <str<strong>on</strong>g>the</str<strong>on</strong>g> largest cott<strong>on</strong> producing country by area. Cott<strong>on</strong> was planted <strong>on</strong> 8.4<br />
milli<strong>on</strong> hectares in 2003/04, but <str<strong>on</strong>g>the</str<strong>on</strong>g> average yield was <strong>on</strong>ly 314 kg lint per<br />
hectare. India has <str<strong>on</strong>g>the</str<strong>on</strong>g> unique characteristic <str<strong>on</strong>g>of</str<strong>on</strong>g> growing all four cultivated<br />
species <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> and growing about 45% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> total area under commercial<br />
32
cott<strong>on</strong> hybrids. In additi<strong>on</strong>, 2003/04 was <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d year <str<strong>on</strong>g>of</str<strong>on</strong>g> Bt cott<strong>on</strong> in India,<br />
but <strong>on</strong>ly Bt hybrids have been approved for commercial producti<strong>on</strong>. Cott<strong>on</strong> is<br />
part <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> small scale farming system and family members perform many<br />
operati<strong>on</strong>s manually. All cott<strong>on</strong> is hand-picked. The government <str<strong>on</strong>g>of</str<strong>on</strong>g> India has<br />
launched a huge program called “Technology Missi<strong>on</strong>” which comprises four<br />
mini-missi<strong>on</strong>s focused in improving research, producti<strong>on</strong>, marketing and<br />
processing <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>. India manages domestic cott<strong>on</strong> prices to increase textile<br />
producti<strong>on</strong> and employs a support price for farmers. Support prices for major<br />
varieties are fixed <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> recommendati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Commissi<strong>on</strong> for Agriculture<br />
Costs and Prices. Some subsidies are given for various comp<strong>on</strong>ent schemes <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> centrally sp<strong>on</strong>sored Intensive Cott<strong>on</strong> <strong>Development</strong> Program. At farm level,<br />
Cooperative Credit Societies, Cooperative Commercial Banks, and State<br />
Agricultural Departments generally provide financing, although in some areas<br />
private traders may finance <str<strong>on</strong>g>the</str<strong>on</strong>g> crop. Cooperative Credit Societies obtain funds<br />
from State Cooperative Banks which, in turn, obtain funds from <str<strong>on</strong>g>the</str<strong>on</strong>g> Nati<strong>on</strong>al<br />
Bank for Agricultural and Rural <strong>Development</strong>.<br />
Most ginneries are individually owned, although a few are textile mill owned.<br />
In some areas—Gujarat, Maharashtra, Tamil Nadu, Punjab, and Karnataka—<br />
ginneries are cooperative farmer entities. India employs a mixed cott<strong>on</strong><br />
procurement system. In Maharashtra, <str<strong>on</strong>g>the</str<strong>on</strong>g> Maharashtra State Cooperative<br />
Marketing Federati<strong>on</strong>—a public sector entity—purchases all <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> while<br />
ginning companies generally purchase cott<strong>on</strong> in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r states. In a few instances,<br />
textile mills and private traders may also purchase cott<strong>on</strong>. The Cott<strong>on</strong><br />
Corporati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> India (CCI), a public sector entity, provides price support in<br />
o<str<strong>on</strong>g>the</str<strong>on</strong>g>r states and purchases cott<strong>on</strong> for <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>alized textile industry. Until<br />
recently, private trade was <strong>on</strong>ly involved in <str<strong>on</strong>g>the</str<strong>on</strong>g> export <str<strong>on</strong>g>of</str<strong>on</strong>g> Assam Comilla,<br />
yellow pickings, and Zoda. All o<str<strong>on</strong>g>the</str<strong>on</strong>g>r export activity was handled by CCI, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Maharashtra cooperative, <str<strong>on</strong>g>the</str<strong>on</strong>g> Gujarat State Marketing Federati<strong>on</strong>, and <str<strong>on</strong>g>the</str<strong>on</strong>g> state<br />
marketing federati<strong>on</strong>s. The government sets export quotas and minimum export<br />
prices and sales are by tender. CCI is required to buy cott<strong>on</strong> when local prices<br />
fall below <str<strong>on</strong>g>the</str<strong>on</strong>g> support price, but that rarely happens.<br />
Pakistan<br />
Pakistan is <str<strong>on</strong>g>the</str<strong>on</strong>g> largest IDB cott<strong>on</strong>-producing member country. Pakistan has<br />
been <str<strong>on</strong>g>the</str<strong>on</strong>g> fourth largest cott<strong>on</strong>-producing country in <str<strong>on</strong>g>the</str<strong>on</strong>g> world since <str<strong>on</strong>g>the</str<strong>on</strong>g> 1980s.<br />
Pakistan emerged as <str<strong>on</strong>g>the</str<strong>on</strong>g> third largest producer in 1991/92, but <str<strong>on</strong>g>the</str<strong>on</strong>g> leaf curl<br />
virus disease caused by Gemini viruses affected almost all cott<strong>on</strong> producing<br />
areas and lowered producti<strong>on</strong> by 40%. However, breeders quickly understood<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> gravity <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> problem and reoriented breeding programs, assigning high<br />
priority to leaf curl virus resistance. Susceptible varieties were taken out <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
33
producti<strong>on</strong> and yields have recovered greatly. Yields are higher in <str<strong>on</strong>g>the</str<strong>on</strong>g> Punjab,<br />
which c<strong>on</strong>tributes about to 90% <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> country. Cott<strong>on</strong> growers<br />
indirectly sp<strong>on</strong>sor almost half <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> research <strong>on</strong> cott<strong>on</strong> by a levy collected at<br />
mills <strong>on</strong> domestic cott<strong>on</strong> and <strong>on</strong> every bale exported, while additi<strong>on</strong>al funding<br />
for research and technology transfer comes from provincial governments.<br />
The major subsidized input has been credit, in <str<strong>on</strong>g>the</str<strong>on</strong>g> form <str<strong>on</strong>g>of</str<strong>on</strong>g> interest-free loans <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
up to 10,000 Pakistani rupees (US$170), which are made available to small<br />
farmers by <str<strong>on</strong>g>the</str<strong>on</strong>g> Agricultural <strong>Development</strong> Bank <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan and by commercial<br />
banks. The government <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan has implemented many programs to<br />
safeguard <str<strong>on</strong>g>the</str<strong>on</strong>g> interests <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers as well as local spinners. Domestic prices<br />
were protected through a levy <strong>on</strong> export duty, and exports were c<strong>on</strong>fined to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
exportable surplus. However, since 1981, <str<strong>on</strong>g>the</str<strong>on</strong>g> government has implemented <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
“Support Price” system for cott<strong>on</strong> seed and lint prices in <str<strong>on</strong>g>the</str<strong>on</strong>g> country. Main<br />
objectives <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> support price are to safeguard <str<strong>on</strong>g>the</str<strong>on</strong>g> interest <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers against<br />
falling prices and stabilize inter-year and intra-year prices. The support price<br />
computati<strong>on</strong> is primarily based <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> average producti<strong>on</strong> costs per unit area<br />
and compensati<strong>on</strong> for any increases in inputs and labor. The system envisages<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> Trading Corporati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan, a government corporati<strong>on</strong>, to enter <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
market and buy cott<strong>on</strong> in case prices tend to fall below <str<strong>on</strong>g>the</str<strong>on</strong>g> support price.<br />
Practically, seedcott<strong>on</strong> was <strong>on</strong>ly <strong>on</strong>ce below <str<strong>on</strong>g>the</str<strong>on</strong>g> support price <str<strong>on</strong>g>of</str<strong>on</strong>g> seedcott<strong>on</strong>, in<br />
2001/02, and <str<strong>on</strong>g>the</str<strong>on</strong>g> market price <str<strong>on</strong>g>of</str<strong>on</strong>g> lint was never below <str<strong>on</strong>g>the</str<strong>on</strong>g> support price during<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> same time. Low internati<strong>on</strong>al prices in 2001/02 encouraged Pakistani<br />
spinners to import cott<strong>on</strong> at prices lower than <str<strong>on</strong>g>the</str<strong>on</strong>g> domestic market.<br />
Brazil<br />
In <str<strong>on</strong>g>the</str<strong>on</strong>g> last two decades, cott<strong>on</strong> producti<strong>on</strong> has stopped in Central America and<br />
has significantly shrunk in all South American countries. Anth<strong>on</strong>omus grandis<br />
(boll weevil), <str<strong>on</strong>g>the</str<strong>on</strong>g> pest <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Americas, became widespread. The inability <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
countries to c<strong>on</strong>trol <str<strong>on</strong>g>the</str<strong>on</strong>g> pest at ec<strong>on</strong>omical cost forced <str<strong>on</strong>g>the</str<strong>on</strong>g>m to aband<strong>on</strong> or<br />
reduce cott<strong>on</strong> producti<strong>on</strong>. Brazil is <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly country in <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong> that has<br />
recovered some producti<strong>on</strong>. The average yield in Brazil has quadrupled since<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> early 1990s, but this is due to new areas under cott<strong>on</strong> producti<strong>on</strong>.<br />
In 2001/02, domestic prices in Brazil fell below <str<strong>on</strong>g>the</str<strong>on</strong>g> minimum guaranteed price<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> 36.6 U.S. cents per pound <str<strong>on</strong>g>of</str<strong>on</strong>g> lint and <str<strong>on</strong>g>the</str<strong>on</strong>g> government spent US$9.6 milli<strong>on</strong><br />
to cover <str<strong>on</strong>g>the</str<strong>on</strong>g> difference. Brazilian growers sold cott<strong>on</strong> at <str<strong>on</strong>g>the</str<strong>on</strong>g> minimum<br />
guaranteed price and <str<strong>on</strong>g>the</str<strong>on</strong>g> government reimbursed buyers for <str<strong>on</strong>g>the</str<strong>on</strong>g> difference<br />
between <str<strong>on</strong>g>the</str<strong>on</strong>g> minimum price and market prices. For 2002/03, market prices<br />
were well above <str<strong>on</strong>g>the</str<strong>on</strong>g> minimum guaranteed price, set at 35 U.S. cents per pound<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> lint and no assistance was <str<strong>on</strong>g>of</str<strong>on</strong>g>fered. The Brazilian government <str<strong>on</strong>g>of</str<strong>on</strong>g>fered<br />
34
assistance in recent seas<strong>on</strong>s, with a program designed to secure prices above<br />
minimum prices through opti<strong>on</strong>s exercised by farmers. Funding for this<br />
program is approved each seas<strong>on</strong> as needed. In 2001/02, 2002/03 and 2003/04<br />
no expenses were reported through this program.<br />
Turkey<br />
Turkey is <str<strong>on</strong>g>the</str<strong>on</strong>g> sixth largest cott<strong>on</strong> producing country in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. Cott<strong>on</strong> was<br />
planted <strong>on</strong> 700,000 hectares in 2003/04, with an average yield <str<strong>on</strong>g>of</str<strong>on</strong>g> 1,286 kg/ha,<br />
and produced 900,000 t<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> lint. The cott<strong>on</strong> area is divided into four regi<strong>on</strong>s:<br />
Aegean, Antalya, Çukurova and Sou<str<strong>on</strong>g>the</str<strong>on</strong>g>ast. There is not much difference in<br />
yield am<strong>on</strong>g regi<strong>on</strong>s, although <str<strong>on</strong>g>the</str<strong>on</strong>g> pest complex is quite different from regi<strong>on</strong><br />
to regi<strong>on</strong>. The Sou<str<strong>on</strong>g>the</str<strong>on</strong>g>ast regi<strong>on</strong> has emerged as <str<strong>on</strong>g>the</str<strong>on</strong>g> largest cott<strong>on</strong> producing<br />
area in Turkey due to a huge irrigati<strong>on</strong> project and expansi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> irrigati<strong>on</strong><br />
facilities has shifted <str<strong>on</strong>g>the</str<strong>on</strong>g> focus <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> area to this regi<strong>on</strong>. Machinepicking<br />
is increasing. The government <str<strong>on</strong>g>of</str<strong>on</strong>g> Turkey provided a premium <str<strong>on</strong>g>of</str<strong>on</strong>g> 3 U.S.<br />
cents per pound <str<strong>on</strong>g>of</str<strong>on</strong>g> lint to cott<strong>on</strong> growers in 2001/02, which is US$59 milli<strong>on</strong> at<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al level (ICAC 2003b). In 2002/03, <str<strong>on</strong>g>the</str<strong>on</strong>g> total premium was equivalent<br />
to US$57 milli<strong>on</strong>. In early May 2004, <str<strong>on</strong>g>the</str<strong>on</strong>g> government announced it was<br />
lowering <str<strong>on</strong>g>the</str<strong>on</strong>g> premium to 1 U.S. cent per pound <str<strong>on</strong>g>of</str<strong>on</strong>g> lint for 2004/05.<br />
Australia<br />
Australia is <str<strong>on</strong>g>the</str<strong>on</strong>g> highest or <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d highest yielding country in <str<strong>on</strong>g>the</str<strong>on</strong>g> world.<br />
Cott<strong>on</strong> is produced under irrigated c<strong>on</strong>diti<strong>on</strong>s in New South Wales, and mostly<br />
under rainfed c<strong>on</strong>diti<strong>on</strong>s in Queensland. Rain water is collected and used for<br />
cott<strong>on</strong> irrigati<strong>on</strong> and dry c<strong>on</strong>diti<strong>on</strong>s in <str<strong>on</strong>g>the</str<strong>on</strong>g> last few years have affected cott<strong>on</strong><br />
producti<strong>on</strong>. The Comm<strong>on</strong>wealth Scientific and Industrial Research<br />
Organizati<strong>on</strong> (CSIRO), al<strong>on</strong>g with state research instituti<strong>on</strong>s, undertakes most<br />
practical research <strong>on</strong> cott<strong>on</strong>. The Australian Cott<strong>on</strong> Growers Research<br />
Associati<strong>on</strong>, Inc. funds research <strong>on</strong> cott<strong>on</strong> through a levy that is matched by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
government <strong>on</strong> a dollar-to-dollar basis. The Australian Cott<strong>on</strong> Growers<br />
Research Associati<strong>on</strong> organizes <str<strong>on</strong>g>the</str<strong>on</strong>g> Australian Cott<strong>on</strong> C<strong>on</strong>ference every two<br />
years. The Cott<strong>on</strong> Research and <strong>Development</strong> Corporati<strong>on</strong> c<strong>on</strong>trols funds, but<br />
all projects are reviewed by <str<strong>on</strong>g>the</str<strong>on</strong>g> Associati<strong>on</strong> before <str<strong>on</strong>g>the</str<strong>on</strong>g> Corporati<strong>on</strong> approves<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>m.<br />
Australia is <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d largest exporter <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> during normal years. A highly<br />
mechanized farming system coupled with a small number <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> growers<br />
owning large areas ensures high yield. Australia has <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> most efficient<br />
cott<strong>on</strong> producing system in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. Cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> is <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> lowest<br />
am<strong>on</strong>g cott<strong>on</strong> exporting countries. No direct assistance is provided by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
35
government to cott<strong>on</strong> growers, and Australia does not support government<br />
subsidy to cott<strong>on</strong> producti<strong>on</strong> in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries.<br />
Central Asia (Uzbekistan)<br />
Cott<strong>on</strong> is <str<strong>on</strong>g>the</str<strong>on</strong>g> most important crop in Uzbekistan, Turkmenistan and Tajikistan.<br />
It is also grown in Kazakhstan, Azerbaijan, and Kyrgyzstan. Uzbekistan is <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
fifth largest cott<strong>on</strong> producing country in <str<strong>on</strong>g>the</str<strong>on</strong>g> world and shares about two-thirds<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> in Central Asian countries. The cott<strong>on</strong> producti<strong>on</strong> policy in<br />
Uzbekistan is discussed in detail in this secti<strong>on</strong>. The policies <str<strong>on</strong>g>of</str<strong>on</strong>g> Uzbekistan and<br />
Turkmenistan are similar, with <str<strong>on</strong>g>the</str<strong>on</strong>g> major excepti<strong>on</strong> being that cott<strong>on</strong> export<br />
marketing in Turkmenistan is handled by a single state agency named<br />
Turkmenpakhtaexport. Price increases as incentives to promote producti<strong>on</strong><br />
and/or increase efficiency do not exist yet. State producti<strong>on</strong> orders, highly<br />
subsidized fixed input prices, and fixed output prices are important<br />
characteristics <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> current producti<strong>on</strong> systems. The producti<strong>on</strong> order is in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
form <str<strong>on</strong>g>of</str<strong>on</strong>g> a producti<strong>on</strong> quota with a specified area, variety, and input level<br />
furnished by <str<strong>on</strong>g>the</str<strong>on</strong>g> state. Water is supplied free. The governments are attempting<br />
to introduce market incentives into <str<strong>on</strong>g>the</str<strong>on</strong>g> system in a limited fashi<strong>on</strong>.<br />
Cott<strong>on</strong> ginning in Uzbekistan comes under <str<strong>on</strong>g>the</str<strong>on</strong>g> Republic Producti<strong>on</strong><br />
Amalgamati<strong>on</strong> (Uzkhlopkoprom), while Cott<strong>on</strong> Standards and Classing comes<br />
under <str<strong>on</strong>g>the</str<strong>on</strong>g> Republic’s scientific enterprises divisi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Uzkhlopkoprom.<br />
Seedcott<strong>on</strong> is delivered to collecti<strong>on</strong> centers, where it is identified by variety,<br />
divided into four grades and transported to ginneries. The ginning seas<strong>on</strong><br />
extends for ten m<strong>on</strong>ths just to keep <str<strong>on</strong>g>the</str<strong>on</strong>g> laborers busy. It can be assumed that<br />
producti<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong> could drop as producers are granted more freedom and<br />
resource c<strong>on</strong>straints, formerly obscured by government subsidies, prove<br />
unsupportable in <str<strong>on</strong>g>the</str<strong>on</strong>g> marketplace. Labor is abundant, and water and electricity<br />
are reliable and inexpensive.<br />
O<str<strong>on</strong>g>the</str<strong>on</strong>g>r Countries<br />
A number <str<strong>on</strong>g>of</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries also provide direct support to cott<strong>on</strong> producti<strong>on</strong><br />
that affects world cott<strong>on</strong> prices. Mexico has a support price mechanism with a<br />
target price <str<strong>on</strong>g>of</str<strong>on</strong>g> 64 U.S. cents per pound <str<strong>on</strong>g>of</str<strong>on</strong>g> lint. The Mexican government paid<br />
US$8 milli<strong>on</strong> or 8 cents per pound <str<strong>on</strong>g>of</str<strong>on</strong>g> lint to growers in 2002/03. At <str<strong>on</strong>g>the</str<strong>on</strong>g> same<br />
target price, <str<strong>on</strong>g>the</str<strong>on</strong>g> government paid 4 U.S. cents per pound or US$6 milli<strong>on</strong> in<br />
2003/04. The target price has been increased to 67 cents per pound <str<strong>on</strong>g>of</str<strong>on</strong>g> lint in<br />
2004/05. The government <str<strong>on</strong>g>of</str<strong>on</strong>g> Egypt provided US$33 milli<strong>on</strong> to growers to cover<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> difference between market price and <str<strong>on</strong>g>the</str<strong>on</strong>g> price paid to growers in 2002/03.<br />
Market prices remained high and no payments are being made in 2003/04.<br />
36
Colombia did not make any direct payments to growers in 2002/03 and 2003/04<br />
as market prices were higher than <str<strong>on</strong>g>the</str<strong>on</strong>g> minimum price announced by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
government. In Côte d’Ivoire, <str<strong>on</strong>g>the</str<strong>on</strong>g> government announced an emergency<br />
assistance <str<strong>on</strong>g>of</str<strong>on</strong>g> 2 cents per pound in 2001/02 and 4 U.S. cents per pound in<br />
2002/03, but no payments have been made in <str<strong>on</strong>g>the</str<strong>on</strong>g> last three seas<strong>on</strong>s due to<br />
political unrest in <str<strong>on</strong>g>the</str<strong>on</strong>g> country.<br />
3. Effect <str<strong>on</strong>g>of</str<strong>on</strong>g> Subsidies <strong>on</strong> Developing Countries<br />
Direct payments to cott<strong>on</strong> growers just because <str<strong>on</strong>g>the</str<strong>on</strong>g>y produce cott<strong>on</strong> has serious<br />
c<strong>on</strong>sequences <strong>on</strong> developing countries where cott<strong>on</strong> is not subsidized. Many<br />
government programs help and encourage cott<strong>on</strong> producti<strong>on</strong>, but direct cash<br />
payments are <str<strong>on</strong>g>the</str<strong>on</strong>g> most harming to cott<strong>on</strong> producers in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries. The<br />
impact <str<strong>on</strong>g>of</str<strong>on</strong>g> direct payments has direct as well as indirect, short-term and l<strong>on</strong>gterm,<br />
c<strong>on</strong>sequences. Some <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>se c<strong>on</strong>sequences are:<br />
Lower Prices – Multiple studies show that direct payments to cott<strong>on</strong> growers<br />
keep internati<strong>on</strong>al prices lower than normal. Lower internati<strong>on</strong>al prices bring<br />
lower income to exporting countries and, in this regard, West African and<br />
Central Asian countries suffer <str<strong>on</strong>g>the</str<strong>on</strong>g> most, as most cott<strong>on</strong> produced is exported<br />
from <str<strong>on</strong>g>the</str<strong>on</strong>g>se regi<strong>on</strong>s. If subsidies are eliminated, prices (after being higher for a<br />
few years) could bounce back to <str<strong>on</strong>g>the</str<strong>on</strong>g> level prior to <str<strong>on</strong>g>the</str<strong>on</strong>g> eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> subsidies.<br />
Even under such circumstances, higher producti<strong>on</strong> in developing countries will<br />
bring higher total revenue from cott<strong>on</strong>.<br />
Eliminate Growers - Prices are determined by supply and demand. Direct<br />
subsidies encourage oversupply <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market at <str<strong>on</strong>g>the</str<strong>on</strong>g> cost<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> small-scale farmers in developing countries. The subsidized inefficient<br />
growers c<strong>on</strong>tinue to produce cott<strong>on</strong> in developed countries, while keeping<br />
many farmers out <str<strong>on</strong>g>of</str<strong>on</strong>g> business in developing countries.<br />
Increase Poverty - Many farmers in developing countries have no alternate<br />
crops, or <str<strong>on</strong>g>the</str<strong>on</strong>g>ir alternate crops are low-income crops. Eliminating such growers<br />
from cott<strong>on</strong> producti<strong>on</strong> or limiting <str<strong>on</strong>g>the</str<strong>on</strong>g>ir land devoted to cott<strong>on</strong> producti<strong>on</strong>, and<br />
thus <str<strong>on</strong>g>the</str<strong>on</strong>g>ir income, adds to poverty in that country and regi<strong>on</strong>.<br />
Lower Efficiency - Direct payments to cott<strong>on</strong> growers make inefficient cott<strong>on</strong><br />
growers. Subsidized cott<strong>on</strong> growers do not strive as hard to survive in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
cott<strong>on</strong> producti<strong>on</strong> business as a n<strong>on</strong>-subsidized cott<strong>on</strong> grower would do.<br />
Unfair Trade - Subsidies are a source <str<strong>on</strong>g>of</str<strong>on</strong>g> unfair trade <strong>on</strong> cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> world.<br />
How can farmers in n<strong>on</strong>- subsidized countries survive in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> business if<br />
37
farmers in developed or developing countries receive direct payments<br />
equivalent to a significant porti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> market price?<br />
C<strong>on</strong>suming Countries Benefit – Currently <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>suming countries are able to<br />
buy cott<strong>on</strong> at a lower price because <str<strong>on</strong>g>of</str<strong>on</strong>g> subsidies. But, prices are expected to<br />
go higher (at least for some time) if subsidies are eliminated, <str<strong>on</strong>g>the</str<strong>on</strong>g>refore,<br />
c<strong>on</strong>suming countries like Bangladesh will be affected by <str<strong>on</strong>g>the</str<strong>on</strong>g> eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
subsidies.<br />
Lower Demand for Cott<strong>on</strong> – The U.S. cott<strong>on</strong> industry is spending about 65<br />
milli<strong>on</strong> US$ every year <strong>on</strong> average for enhancing demand for cott<strong>on</strong>. Higher<br />
demand means higher prices. If subsidies are eliminated, cott<strong>on</strong> producti<strong>on</strong> in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. will decline and <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. cott<strong>on</strong> industry may not be able to c<strong>on</strong>tinue<br />
investing heavily <strong>on</strong> creating demand for cott<strong>on</strong>. Lower demand means lower<br />
prices.<br />
Cott<strong>on</strong> Research and <strong>Development</strong> – A lot <str<strong>on</strong>g>of</str<strong>on</strong>g> research <strong>on</strong> cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
USA is undertaken in <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector, in additi<strong>on</strong> to research undertaken by<br />
universities and <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. Department <str<strong>on</strong>g>of</str<strong>on</strong>g> Agriculture. The U.S. is more<br />
advanced in cott<strong>on</strong> research and shares its research findings with developing<br />
countries through <str<strong>on</strong>g>the</str<strong>on</strong>g> Beltwide Cott<strong>on</strong> C<strong>on</strong>ferences, collaborative projects<br />
and participati<strong>on</strong> in c<strong>on</strong>ferences. Transfer <str<strong>on</strong>g>of</str<strong>on</strong>g> knowledge from <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. will be<br />
lower under <str<strong>on</strong>g>the</str<strong>on</strong>g> no-subsidies c<strong>on</strong>diti<strong>on</strong>s.<br />
4. West African Countries Issue <str<strong>on</strong>g>of</str<strong>on</strong>g> Subsidies<br />
Benin, Burkina Faso, Chad and Mali raised <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> subsidies issue at <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
WTO General Council and Agriculture Committee. The proposal became a<br />
Ministerial C<strong>on</strong>ference document at <str<strong>on</strong>g>the</str<strong>on</strong>g> 5 th WTO Ministerial C<strong>on</strong>ference held<br />
in Cancún, Mexico, from 10 to 14 September 2003. Benin, Burkina Faso,<br />
Chad and Mali described <str<strong>on</strong>g>the</str<strong>on</strong>g> damage that <str<strong>on</strong>g>the</str<strong>on</strong>g>y believe has been caused by<br />
cott<strong>on</strong> subsidies in rich countries, and called for subsidies to be eliminated.<br />
The four countries claimed that subsidies in rich countries c<strong>on</strong>tribute to<br />
poverty in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir countries. They also claimed that <str<strong>on</strong>g>the</str<strong>on</strong>g>y are competitive but<br />
find it difficult to compete in <str<strong>on</strong>g>the</str<strong>on</strong>g> presence <str<strong>on</strong>g>of</str<strong>on</strong>g> subsidies in rich countries.<br />
Benin, Burkina Faso, Chad and Mali toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r called for compensati<strong>on</strong> to be<br />
paid to <str<strong>on</strong>g>the</str<strong>on</strong>g>m while subsidies are in effect, to cover for <str<strong>on</strong>g>the</str<strong>on</strong>g>ir ec<strong>on</strong>omic losses.<br />
Argentina, Australia, Bangladesh, Camero<strong>on</strong>, Canada, Guinea, India, Senegal<br />
and South Africa supported <str<strong>on</strong>g>the</str<strong>on</strong>g> proposal. In Cancún, Benin, Burkina Faso,<br />
Chad and Mali sought a decisi<strong>on</strong> from <str<strong>on</strong>g>the</str<strong>on</strong>g> Cancún Ministerial C<strong>on</strong>ference.<br />
The U.S. government stated that high producti<strong>on</strong>, industrial policies that<br />
support producti<strong>on</strong> for syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fibers and high tariffs <strong>on</strong> finished products<br />
38
are resp<strong>on</strong>sible for falling cott<strong>on</strong> prices. Distorti<strong>on</strong>s in cott<strong>on</strong> are not <strong>on</strong>ly<br />
caused by subsidies but also by o<str<strong>on</strong>g>the</str<strong>on</strong>g>r factors in <str<strong>on</strong>g>the</str<strong>on</strong>g> sector. The U.S. proposed<br />
discussing how to deal with distorti<strong>on</strong>s throughout <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> chain,<br />
including subsidies, tariff and n<strong>on</strong>-tariff barriers <strong>on</strong> cott<strong>on</strong>, syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fibers<br />
and products made from <str<strong>on</strong>g>the</str<strong>on</strong>g>m. The European Uni<strong>on</strong> said that its producti<strong>on</strong><br />
and exports are too small to have an impact <strong>on</strong> world cott<strong>on</strong> prices, and that it<br />
is changing <str<strong>on</strong>g>the</str<strong>on</strong>g> program for cott<strong>on</strong> producers.<br />
The main task <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> 5 th WTO Ministerial C<strong>on</strong>ference in Cancun was to take<br />
stock <str<strong>on</strong>g>of</str<strong>on</strong>g> progress in negotiati<strong>on</strong>s and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r work under <str<strong>on</strong>g>the</str<strong>on</strong>g> Doha<br />
<strong>Development</strong> Agenda. The C<strong>on</strong>ference failed to act <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> West African<br />
cott<strong>on</strong> proposal and make a decisi<strong>on</strong>.<br />
In July 2004, <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO General Council held two weeks <str<strong>on</strong>g>of</str<strong>on</strong>g> negotiati<strong>on</strong>s and<br />
<strong>on</strong> July 31, 2004, agreed <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> framework and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r agreements designed to<br />
focus negotiati<strong>on</strong>s and raise <str<strong>on</strong>g>the</str<strong>on</strong>g>m to a new level. The important aspect <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
decisi<strong>on</strong> was that cott<strong>on</strong> will be handled separately from o<str<strong>on</strong>g>the</str<strong>on</strong>g>r commodities<br />
but within <str<strong>on</strong>g>the</str<strong>on</strong>g> framework <str<strong>on</strong>g>of</str<strong>on</strong>g> WTO talks when <str<strong>on</strong>g>the</str<strong>on</strong>g>y resume. The four West<br />
African countries deserve credit for this.<br />
Direct income and price support provided to <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry by various<br />
governments amounted to US$4.8 billi<strong>on</strong> in 2002/03 and US$5.8 billi<strong>on</strong> in 2001/02.<br />
Income support provided to cott<strong>on</strong> growers in Greece and Spain is estimated at<br />
US$905 milli<strong>on</strong> in 2003/04. In <str<strong>on</strong>g>the</str<strong>on</strong>g> USA, <str<strong>on</strong>g>the</str<strong>on</strong>g> average subsidy per pound between<br />
1980 and 2002 was 19 cents per pound <str<strong>on</strong>g>of</str<strong>on</strong>g> lint.<br />
The USA and China (Mainland) provided subsidies to exports in 2002/03 and<br />
2003/04. Overall assistance in <str<strong>on</strong>g>the</str<strong>on</strong>g> two countries combined was US$316 milli<strong>on</strong> in<br />
2002/03 and US$160 milli<strong>on</strong> in 2003/04.<br />
Subsidies lower prices, increase poverty, result in less efficient growers, produce<br />
unfair trade but eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> subsidies also has c<strong>on</strong>sequences.<br />
IV. ENHANCING EFFICIENCY AND PRODUCTIVITY IN THE<br />
COTTON SECTOR<br />
Cott<strong>on</strong> has experienced three major changes in <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> sector in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
last three decades: 1) development <str<strong>on</strong>g>of</str<strong>on</strong>g> short-durati<strong>on</strong> varieties, 2) adopti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
pesticides and, 3) precise measurement <str<strong>on</strong>g>of</str<strong>on</strong>g> fiber quality by machines. Shortdurati<strong>on</strong><br />
varieties were developed to better suit cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong><br />
systems followed in various countries. The struggle goes <strong>on</strong> and in IDB<br />
member countries like Iran and Syria, where cott<strong>on</strong> and wheat still overlap<br />
for over a m<strong>on</strong>th, even shorter durati<strong>on</strong> varieties need to be developed.<br />
39
C<strong>on</strong>diti<strong>on</strong>s may become suitable for planting cott<strong>on</strong>, but wheat is still in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
field for <str<strong>on</strong>g>the</str<strong>on</strong>g> next m<strong>on</strong>th, thus, cott<strong>on</strong> does not fit <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong>-wheat rotati<strong>on</strong> as<br />
it does in Pakistan, India and many o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries. Of course, wheat too<br />
could be focused to mature early and spare <str<strong>on</strong>g>the</str<strong>on</strong>g> last couple <str<strong>on</strong>g>of</str<strong>on</strong>g> weeks for<br />
cott<strong>on</strong>. If <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> crop is in <str<strong>on</strong>g>the</str<strong>on</strong>g> field for a shorter durati<strong>on</strong>, it would require<br />
less water and protecti<strong>on</strong> against pests. The pressure to grow more area<br />
under food crops and fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r improve <str<strong>on</strong>g>the</str<strong>on</strong>g> cropping intensity suggests growing<br />
shorter durati<strong>on</strong> varieties. Most countries have already made significant<br />
achievements, but <str<strong>on</strong>g>the</str<strong>on</strong>g> emphasis has to c<strong>on</strong>tinue in this directi<strong>on</strong> without<br />
sacrificing yields. The role <str<strong>on</strong>g>of</str<strong>on</strong>g> agr<strong>on</strong>omic management <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> crop so that <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
plant makes <str<strong>on</strong>g>the</str<strong>on</strong>g> fullest and most ec<strong>on</strong>omical use <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs has been<br />
acknowledged in research, but how to make farmers in developing countries<br />
understand <str<strong>on</strong>g>the</str<strong>on</strong>g> role <str<strong>on</strong>g>of</str<strong>on</strong>g> agr<strong>on</strong>omic management and utilize it optimally needs<br />
to be pursued fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r.<br />
Cott<strong>on</strong>, like o<str<strong>on</strong>g>the</str<strong>on</strong>g>r crops, has experienced <str<strong>on</strong>g>the</str<strong>on</strong>g> use <str<strong>on</strong>g>of</str<strong>on</strong>g> fertilizers and pesticides,<br />
particularly insecticide. Fertilizers were necessary to supplement depleting<br />
soils year after year. Using soils without adding <str<strong>on</strong>g>the</str<strong>on</strong>g> nutrients taken away by<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> previous crop brings reducti<strong>on</strong>s in yield. There were <strong>on</strong>ly two opti<strong>on</strong>s: to<br />
apply organic matter in <str<strong>on</strong>g>the</str<strong>on</strong>g> form <str<strong>on</strong>g>of</str<strong>on</strong>g> farmyard manure or green manure— but<br />
nei<str<strong>on</strong>g>the</str<strong>on</strong>g>r was efficient enough to meet <str<strong>on</strong>g>the</str<strong>on</strong>g> needs <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> growing plant—or to<br />
apply syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic inorganic fertilizers. It was easy to c<strong>on</strong>vince farmers about<br />
fertilizer use, and n<strong>on</strong>-traditi<strong>on</strong>al inorganic fertilizers were adopted quickly<br />
and vigorously due to <str<strong>on</strong>g>the</str<strong>on</strong>g> fact that experience also came from o<str<strong>on</strong>g>the</str<strong>on</strong>g>r crops.<br />
There was an upper limit <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> quantity <str<strong>on</strong>g>of</str<strong>on</strong>g> fertilizers applied bey<strong>on</strong>d which<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> cost benefit ratio would decline or even turn negative. Excessive<br />
vegetative growth due to nitrogen, <str<strong>on</strong>g>the</str<strong>on</strong>g> most used element <str<strong>on</strong>g>of</str<strong>on</strong>g> inorganic<br />
syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fertilizers, also capped <str<strong>on</strong>g>the</str<strong>on</strong>g> limit. The advent <str<strong>on</strong>g>of</str<strong>on</strong>g> short durati<strong>on</strong><br />
varieties, particularly in wheat and rice (cott<strong>on</strong> already menti<strong>on</strong>ed above),<br />
increased <str<strong>on</strong>g>the</str<strong>on</strong>g> use <str<strong>on</strong>g>of</str<strong>on</strong>g> fertilizers, but reports <str<strong>on</strong>g>of</str<strong>on</strong>g> unwanted use <str<strong>on</strong>g>of</str<strong>on</strong>g> fertilizers are<br />
not comm<strong>on</strong> because <str<strong>on</strong>g>the</str<strong>on</strong>g> results are significant and easily noticeable.<br />
Fertilizer use has been optimized <strong>on</strong> cott<strong>on</strong> in most countries, with <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
excepti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Africa in general and West Africa in particular. While additi<strong>on</strong>al<br />
applicati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> fertilizers in West African countries would improve cott<strong>on</strong><br />
producti<strong>on</strong> efficiency and productivity, timing and perfecti<strong>on</strong> in fertilizer<br />
applicati<strong>on</strong> in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries could still bring fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r improvement.<br />
Pesticides were adopted as a measure to save losses from pests. However,<br />
now more insecticides are used <strong>on</strong> cott<strong>on</strong> than <strong>on</strong> any o<str<strong>on</strong>g>the</str<strong>on</strong>g>r crop. In fact,<br />
cott<strong>on</strong> covers 2.4% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world's farmland but uses 24% <str<strong>on</strong>g>of</str<strong>on</strong>g> all insecticides<br />
applied globally. Even developed countries like <str<strong>on</strong>g>the</str<strong>on</strong>g> USA are helpless and it is<br />
estimated that cott<strong>on</strong> c<strong>on</strong>sumes 60% <str<strong>on</strong>g>of</str<strong>on</strong>g> all insecticides applied in <str<strong>on</strong>g>the</str<strong>on</strong>g> USA. In<br />
40
o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries, cott<strong>on</strong> c<strong>on</strong>sumes even a higher percentage, or <str<strong>on</strong>g>the</str<strong>on</strong>g> most<br />
pesticide use in agriculture. Pesticides were adopted not as a choice but as a<br />
necessary input, because no o<str<strong>on</strong>g>the</str<strong>on</strong>g>r efficient and cost effective pest c<strong>on</strong>trol<br />
method was available, and this is still true. The use <str<strong>on</strong>g>of</str<strong>on</strong>g> pesticides has been<br />
more cautious than that <str<strong>on</strong>g>of</str<strong>on</strong>g> fertilizers because pesticides are much more<br />
dangerous chemicals compared to fertilizers. But unfortunately, pesticides<br />
were promoted as vigorously as fertilizers, first by governments <str<strong>on</strong>g>the</str<strong>on</strong>g>n by giant<br />
multinati<strong>on</strong>al chemical companies. Companies hired qualified entomologists<br />
and put <str<strong>on</strong>g>the</str<strong>on</strong>g>m in direct c<strong>on</strong>tact with researchers and farmers. The strategy<br />
worked well and <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> technology was c<strong>on</strong>verted into a<br />
chemical-based producti<strong>on</strong> technology. Farmers became obsessed with<br />
insecticides and used <str<strong>on</strong>g>the</str<strong>on</strong>g>m extensively without looking into <str<strong>on</strong>g>the</str<strong>on</strong>g>ir many l<strong>on</strong>gterm<br />
c<strong>on</strong>sequences. The most important repercussi<strong>on</strong>s that have been<br />
recognized, even by <str<strong>on</strong>g>the</str<strong>on</strong>g> chemical companies, are <str<strong>on</strong>g>the</str<strong>on</strong>g> development <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
resistance by insects, resurgence <str<strong>on</strong>g>of</str<strong>on</strong>g> sec<strong>on</strong>dary pests as major pests, and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
increasing cost <str<strong>on</strong>g>of</str<strong>on</strong>g> insecticides. C<strong>on</strong>sequently, pesticide effectiveness proved<br />
short-lived before insects developed resistance, necessitating additi<strong>on</strong>al<br />
pesticide applicati<strong>on</strong>s more frequently until <str<strong>on</strong>g>the</str<strong>on</strong>g>y have little or no effect. The<br />
small gains in yield were quickly replaced by significant increases in<br />
producti<strong>on</strong> costs. The cost <str<strong>on</strong>g>of</str<strong>on</strong>g> insect c<strong>on</strong>trol operati<strong>on</strong>s is a major cost in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
cott<strong>on</strong> producti<strong>on</strong> systems <str<strong>on</strong>g>of</str<strong>on</strong>g> most countries.<br />
Table 3. Insect C<strong>on</strong>trol / Costs in Some Countries<br />
Country Insect C<strong>on</strong>trol / Costs<br />
(% <str<strong>on</strong>g>of</str<strong>on</strong>g> Total Costs) *<br />
Australia (irrigated) 38<br />
Benin (North Z<strong>on</strong>e) 12<br />
Brazil (Cerrado) 24<br />
Burkina Faso 29<br />
China (Mainland) 15<br />
Egypt 4<br />
India (North) 15<br />
Iran 10<br />
Mali 12<br />
Nigeria 10<br />
Pakistan (Punjab) 28<br />
Sudan (Gezira) 29<br />
Syria 1<br />
Tanzania 16<br />
Turkey (Aegean) 11<br />
Uganda 14<br />
USA 21<br />
Zimbabwe 19<br />
* Ginning ec<strong>on</strong>omic and fixed costs not included<br />
41
The percentage share <str<strong>on</strong>g>of</str<strong>on</strong>g> insecticide spraying is low in Egypt due to <str<strong>on</strong>g>the</str<strong>on</strong>g> high<br />
cost <str<strong>on</strong>g>of</str<strong>on</strong>g> land rent. Syria is <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly country where insecticide use has been<br />
almost eliminated from over 50% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> area that used to be sprayed in<br />
1979. Insecticide use has also been c<strong>on</strong>tained in Australia and to some extent<br />
in China (Mainland), but n<strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB countries o<str<strong>on</strong>g>the</str<strong>on</strong>g>r than Syria has been<br />
able to reduce <str<strong>on</strong>g>the</str<strong>on</strong>g> use <str<strong>on</strong>g>of</str<strong>on</strong>g> insecticides. The variability in <str<strong>on</strong>g>the</str<strong>on</strong>g> share <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
insecticides am<strong>on</strong>g producti<strong>on</strong> costs and <str<strong>on</strong>g>the</str<strong>on</strong>g> number <str<strong>on</strong>g>of</str<strong>on</strong>g> times cott<strong>on</strong> is<br />
sprayed indicates <str<strong>on</strong>g>the</str<strong>on</strong>g> potential to reduce insecticide use to grow cott<strong>on</strong> and<br />
improve its producti<strong>on</strong> efficiency.<br />
One <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> serious aspects <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> that has been ignored is <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
high toxicity effect <str<strong>on</strong>g>of</str<strong>on</strong>g> insecticides <strong>on</strong> humans and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r living organisms. The<br />
most notorious example is <str<strong>on</strong>g>the</str<strong>on</strong>g> banning <str<strong>on</strong>g>of</str<strong>on</strong>g> DDT, but a number <str<strong>on</strong>g>of</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
products have been banned due to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir high toxicity and link to cancers and<br />
reproductive and neurological disorders. One <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> most recent examples is<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> use <str<strong>on</strong>g>of</str<strong>on</strong>g> endosulfan in Australia. Endosulfan is important in Australia due to<br />
its detecti<strong>on</strong> in 1994 in meat from cattle fed <strong>on</strong> cott<strong>on</strong> gin trash from crops<br />
sprayed with endosulfan. Under Australian “‘Best Management Practices,”<br />
cott<strong>on</strong> growers should inform <str<strong>on</strong>g>the</str<strong>on</strong>g>ir neighbors in writing about <str<strong>on</strong>g>the</str<strong>on</strong>g> date and<br />
time <str<strong>on</strong>g>of</str<strong>on</strong>g> spraying endosulfan. The formulati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> endosulfan to be sprayed and<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> method <str<strong>on</strong>g>of</str<strong>on</strong>g> applicati<strong>on</strong> should be included in each letter, al<strong>on</strong>g with a map<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> farm and specific areas to be sprayed. Many such reports and examples<br />
are available linking cott<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>sequences <str<strong>on</strong>g>of</str<strong>on</strong>g> spraying insecticides.<br />
What is <str<strong>on</strong>g>the</str<strong>on</strong>g> way-out or what o<str<strong>on</strong>g>the</str<strong>on</strong>g>r opti<strong>on</strong>s are available? Effectiveness and<br />
cost benefit ratio still favor using insecticides unless farmers are willing to<br />
sacrifice some yield at least for <str<strong>on</strong>g>the</str<strong>on</strong>g> first few years and <str<strong>on</strong>g>the</str<strong>on</strong>g>n follow <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
example <str<strong>on</strong>g>of</str<strong>on</strong>g> Syria. However, countries have adopted insecticides to <str<strong>on</strong>g>the</str<strong>on</strong>g> extent<br />
that it may not be as easy to get rid <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>m as it was for Syria. There are<br />
opti<strong>on</strong>s that need serious c<strong>on</strong>siderati<strong>on</strong>s.<br />
The use <str<strong>on</strong>g>of</str<strong>on</strong>g> agrochemicals coupled with <str<strong>on</strong>g>the</str<strong>on</strong>g> impact <str<strong>on</strong>g>of</str<strong>on</strong>g> those inputs <strong>on</strong><br />
productivity, and <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> plant’s high resp<strong>on</strong>se to input use have turned<br />
cott<strong>on</strong> into a technical crop compared to all o<str<strong>on</strong>g>the</str<strong>on</strong>g>r field crops. The interacti<strong>on</strong><br />
am<strong>on</strong>g inputs, including irrigati<strong>on</strong>, fertilizers, pesticides and growth<br />
regulators, has a drastic effect <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> plant and its ability to form fruit.<br />
Optimum fruit formati<strong>on</strong> and retenti<strong>on</strong> <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> plant in a healthy c<strong>on</strong>diti<strong>on</strong> are<br />
no doubt complex, but not impossible. The efficiency and productivity <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
cott<strong>on</strong> cannot be improved if <str<strong>on</strong>g>the</str<strong>on</strong>g> interacti<strong>on</strong> am<strong>on</strong>g inputs is not properly<br />
understood. This is where <str<strong>on</strong>g>the</str<strong>on</strong>g> awareness <str<strong>on</strong>g>of</str<strong>on</strong>g> growers to growing cott<strong>on</strong><br />
successfully comes in. Most IDB countries follow a traditi<strong>on</strong>al approach <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
educating farmers in cott<strong>on</strong> growing. The farmer who is undoubtedly<br />
42
interested in increasing <str<strong>on</strong>g>the</str<strong>on</strong>g> productivity and efficiency <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> requires a<br />
c<strong>on</strong>vincing argument to change <str<strong>on</strong>g>the</str<strong>on</strong>g> traditi<strong>on</strong>al way <str<strong>on</strong>g>of</str<strong>on</strong>g> growing cott<strong>on</strong> that he<br />
has followed for years. Pakistan adopted <str<strong>on</strong>g>the</str<strong>on</strong>g> “Cott<strong>on</strong> Maximizati<strong>on</strong> Projects,”<br />
starting in <str<strong>on</strong>g>the</str<strong>on</strong>g> late 1970s, and more than doubled its productivity during <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
1980s. Extensi<strong>on</strong> workers were especially trained in cott<strong>on</strong> producti<strong>on</strong><br />
technology and <str<strong>on</strong>g>the</str<strong>on</strong>g>n extensi<strong>on</strong> activities were intensified in <str<strong>on</strong>g>the</str<strong>on</strong>g> project areas.<br />
Government did not provide any additi<strong>on</strong>al finances or inputs, but ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
c<strong>on</strong>vinced farmers to follow <str<strong>on</strong>g>the</str<strong>on</strong>g> recommended producti<strong>on</strong> technology, which<br />
showed a significant difference in productivity between <str<strong>on</strong>g>the</str<strong>on</strong>g> project and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
adjoining n<strong>on</strong>-project areas. Project areas were comprised <str<strong>on</strong>g>of</str<strong>on</strong>g> localities and<br />
frequently moved throughout <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> producing areas in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong><br />
producing provinces. A slightly modified versi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> a similar approach has<br />
been implemented in Iran. Differences in yields are drastic.<br />
Cott<strong>on</strong> is unique in many respects and that also includes its marketing. Cott<strong>on</strong><br />
prices are based <strong>on</strong> fiber quality parameters including length, strength,<br />
micr<strong>on</strong>aire, trash, length uniformity, color and o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs. Thus, all cott<strong>on</strong><br />
produced must be classed not <strong>on</strong>ly for <str<strong>on</strong>g>the</str<strong>on</strong>g> sake <str<strong>on</strong>g>of</str<strong>on</strong>g> fixing <str<strong>on</strong>g>the</str<strong>on</strong>g> price but also for<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> sake <str<strong>on</strong>g>of</str<strong>on</strong>g> getting <str<strong>on</strong>g>the</str<strong>on</strong>g> best out <str<strong>on</strong>g>of</str<strong>on</strong>g> fiber quality. A spinner is unable to <str<strong>on</strong>g>of</str<strong>on</strong>g>fer<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> best price if he has a fear <str<strong>on</strong>g>of</str<strong>on</strong>g> under-spinning <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> he is buying. For<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> sake <str<strong>on</strong>g>of</str<strong>on</strong>g> its best use, cott<strong>on</strong> must be described as much as possible in terms<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> quality parameters that could affect <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning process and that could<br />
have c<strong>on</strong>sequences <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> finished product. Visual classing that took into<br />
c<strong>on</strong>siderati<strong>on</strong> color, trash and preparati<strong>on</strong> is obsolete and does not assess <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
real qualitative value <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>. Instrument-based testing must be adopted to<br />
attract <str<strong>on</strong>g>the</str<strong>on</strong>g> best price for quality cott<strong>on</strong>.<br />
1. Best Producti<strong>on</strong> Practices Model<br />
Cott<strong>on</strong> producti<strong>on</strong> c<strong>on</strong>diti<strong>on</strong>s and practices are so different am<strong>on</strong>g IDB<br />
member countries that it is not possible to devise a uniform producti<strong>on</strong><br />
technology package. But, less<strong>on</strong>s can be learnt from <str<strong>on</strong>g>the</str<strong>on</strong>g> past and present<br />
systems am<strong>on</strong>g member countries as well as from n<strong>on</strong>-member countries. The<br />
objective <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> is not <strong>on</strong>ly to improve yield and quality, but to<br />
make it sustainable. Sustainability <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> must be improved<br />
making it more efficient and affordable. Higher yields do not always mean<br />
higher efficiency if <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> is high. Cott<strong>on</strong> producti<strong>on</strong> should<br />
also c<strong>on</strong>centrate <strong>on</strong> not harming <str<strong>on</strong>g>the</str<strong>on</strong>g> envir<strong>on</strong>ment. A number <str<strong>on</strong>g>of</str<strong>on</strong>g> suitable<br />
practices put toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r can c<strong>on</strong>stitute <str<strong>on</strong>g>the</str<strong>on</strong>g> best producti<strong>on</strong> practices model.<br />
43
2. High Yielding Varieties<br />
Though not many, <str<strong>on</strong>g>the</str<strong>on</strong>g>re are multinati<strong>on</strong>al seed companies dealing with<br />
cott<strong>on</strong>seed. All countries must develop and grow locally developed varieties<br />
as much as possible. Cott<strong>on</strong> is a sensitive plant and always shows high<br />
resp<strong>on</strong>se to growing c<strong>on</strong>diti<strong>on</strong>s. Breeders must develop and find <str<strong>on</strong>g>the</str<strong>on</strong>g> best<br />
varieties suitable for local c<strong>on</strong>diti<strong>on</strong>s. Countries must develop <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own<br />
varieties that are best suited to <str<strong>on</strong>g>the</str<strong>on</strong>g> local c<strong>on</strong>diti<strong>on</strong>s.<br />
3. Pure Certified Seed<br />
Seed is <str<strong>on</strong>g>the</str<strong>on</strong>g> most basic input for harvesting good yields. Unlike o<str<strong>on</strong>g>the</str<strong>on</strong>g>r crops,<br />
even in small producti<strong>on</strong> systems in developing countries, farmers have to<br />
sell seedcott<strong>on</strong> for ginning and thus surrender <str<strong>on</strong>g>the</str<strong>on</strong>g>ir opti<strong>on</strong> to keep seed for<br />
planting <str<strong>on</strong>g>the</str<strong>on</strong>g> next year. Small wheat or corn growers have <str<strong>on</strong>g>the</str<strong>on</strong>g> opti<strong>on</strong> to retain<br />
seed for <str<strong>on</strong>g>the</str<strong>on</strong>g> next crop, but this is not possible in cott<strong>on</strong>. Cott<strong>on</strong> growers in<br />
IDB countries must have access to high quality certified seed. Certified seed<br />
can be provided by <str<strong>on</strong>g>the</str<strong>on</strong>g> public or private sector, but farmers must have full<br />
c<strong>on</strong>fidence in its quality, meaning high germinati<strong>on</strong> and high purity that<br />
meets seed certificati<strong>on</strong> standards set by <str<strong>on</strong>g>the</str<strong>on</strong>g>ir respective governments.<br />
Pakistan provides <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> best examples where a public corporati<strong>on</strong><br />
competes with a number <str<strong>on</strong>g>of</str<strong>on</strong>g> private companies in <str<strong>on</strong>g>the</str<strong>on</strong>g> Punjab province.<br />
4. Least Use <str<strong>on</strong>g>of</str<strong>on</strong>g> Pesticides<br />
Cott<strong>on</strong> is naturally vulnerable to a variety <str<strong>on</strong>g>of</str<strong>on</strong>g> pests, and insecticides have to be<br />
used throughout <str<strong>on</strong>g>the</str<strong>on</strong>g> world to c<strong>on</strong>trol insects. The most critical issue in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
cott<strong>on</strong> producti<strong>on</strong> system is <str<strong>on</strong>g>the</str<strong>on</strong>g> quantity <str<strong>on</strong>g>of</str<strong>on</strong>g> insecticides used to c<strong>on</strong>trol<br />
insects. In Syria, less that <strong>on</strong>e percent <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> area is sprayed with<br />
insecticides compared to over 10 sprays per seas<strong>on</strong> (n<strong>on</strong>-Bt cott<strong>on</strong>) in<br />
Australia and China (Mainland). In India, most area is sprayed with<br />
insecticides 7-8 times per seas<strong>on</strong> <strong>on</strong> average. Syria provides <str<strong>on</strong>g>the</str<strong>on</strong>g> best model<br />
<strong>on</strong> pesticide use.<br />
5. Biological C<strong>on</strong>trol<br />
Uzbekistan and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r Central Asian countries have developed <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> best<br />
biological c<strong>on</strong>trol systems in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. At <strong>on</strong>e time, 120 bio labs were<br />
44
working in Uzbekistan to cover all cott<strong>on</strong> areas in <str<strong>on</strong>g>the</str<strong>on</strong>g> country, limiting <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
number <str<strong>on</strong>g>of</str<strong>on</strong>g> insecticide sprays to 1-2 per seas<strong>on</strong>. Biological c<strong>on</strong>trol is <strong>on</strong>e way<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> reducing insecticide use and improving producti<strong>on</strong> efficiency without<br />
sacrificing <str<strong>on</strong>g>the</str<strong>on</strong>g> envir<strong>on</strong>ment and sustainability <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong>.<br />
6. Agr<strong>on</strong>omic Management<br />
Availability <str<strong>on</strong>g>of</str<strong>on</strong>g> high yielding local varieties, high quality seed and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
inputs do not guarantee high yields unless inputs are used properly. Proper<br />
use <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs assures lower cost and high efficiency. Soil types vary am<strong>on</strong>g<br />
countries, as do varieties and <str<strong>on</strong>g>the</str<strong>on</strong>g>ir needs. The exact same quantity <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs<br />
applied ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r at <str<strong>on</strong>g>the</str<strong>on</strong>g> best time or at an unsuitable time can produce different<br />
results. No uniform doses <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs can be recommended for all countries,<br />
and <str<strong>on</strong>g>the</str<strong>on</strong>g> critical issue is that <str<strong>on</strong>g>the</str<strong>on</strong>g> plant should nei<str<strong>on</strong>g>the</str<strong>on</strong>g>r be under-nourished nor it<br />
should be over-nourished. Farmers must also be aware <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> interacti<strong>on</strong><br />
am<strong>on</strong>g inputs.<br />
7. Transfer <str<strong>on</strong>g>of</str<strong>on</strong>g> Knowledge<br />
Most IDB countries c<strong>on</strong>tinue to follow a traditi<strong>on</strong>al way <str<strong>on</strong>g>of</str<strong>on</strong>g> extending<br />
producti<strong>on</strong> technology to farmers. In Australia where <str<strong>on</strong>g>the</str<strong>on</strong>g>re are <strong>on</strong>ly large<br />
growers, each grower hires a private crop c<strong>on</strong>sultant to advise him <strong>on</strong><br />
producti<strong>on</strong> technology in spite <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> fact that every grower has Internet<br />
access. In <str<strong>on</strong>g>the</str<strong>on</strong>g> USA, <str<strong>on</strong>g>the</str<strong>on</strong>g> extensi<strong>on</strong> system puts cott<strong>on</strong> growers directly in<br />
touch with researchers through <str<strong>on</strong>g>the</str<strong>on</strong>g> Beltwide Cott<strong>on</strong> C<strong>on</strong>ferences held every<br />
year in early January, though o<str<strong>on</strong>g>the</str<strong>on</strong>g>r extensi<strong>on</strong> services remain available during<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> seas<strong>on</strong>. Iran and Pakistan have tried a different system wherein<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>y have intensified extensi<strong>on</strong> activities in certain areas and produced highly<br />
successful results. The “Cott<strong>on</strong> Maximizati<strong>on</strong> Projects” model used in<br />
Pakistan, which more than doubled yields during <str<strong>on</strong>g>the</str<strong>on</strong>g> 1980s, could be used as<br />
a model in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries.<br />
IDB member countries can enhance productivity and efficiency by learning from<br />
each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r’s experiences.<br />
45
V. ENHANCING COMPETITIVENESS IN THE COTTON SECTOR<br />
1. Cott<strong>on</strong>’s Share Am<strong>on</strong>g Fibers C<strong>on</strong>sumed in <str<strong>on</strong>g>the</str<strong>on</strong>g> World<br />
Cott<strong>on</strong> faces tough competiti<strong>on</strong> from syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fibers. Cott<strong>on</strong> comprised 68% <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
textile fibers c<strong>on</strong>sumed in <str<strong>on</strong>g>the</str<strong>on</strong>g> world at <str<strong>on</strong>g>the</str<strong>on</strong>g> end use level in 1960. Since <str<strong>on</strong>g>the</str<strong>on</strong>g>n, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
share <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> is <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> decline and, according to <str<strong>on</strong>g>the</str<strong>on</strong>g> ICAC, <str<strong>on</strong>g>the</str<strong>on</strong>g> share <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong><br />
am<strong>on</strong>g all fibers c<strong>on</strong>sumed in <str<strong>on</strong>g>the</str<strong>on</strong>g> world at <str<strong>on</strong>g>the</str<strong>on</strong>g> end use level declined to 39% in<br />
2003. The two primary reas<strong>on</strong>s for this decline are lack <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> promoti<strong>on</strong><br />
against syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fibers and lower syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fiber prices. Demand for cott<strong>on</strong> is<br />
increasing and during <str<strong>on</strong>g>the</str<strong>on</strong>g> same period, cott<strong>on</strong> c<strong>on</strong>sumpti<strong>on</strong> increased from 10.2<br />
milli<strong>on</strong> t<strong>on</strong>s in 1960 to 20.7 milli<strong>on</strong> t<strong>on</strong>s in 2003 (ICAC 2003c). Cott<strong>on</strong><br />
demand expanded in all regi<strong>on</strong>s and some more recent statistics show that <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
demand for cott<strong>on</strong> registered higher gains in developing countries compared to<br />
developed countries. ICAC work indicates more than a 60% increase in<br />
c<strong>on</strong>sumpti<strong>on</strong> from developing countries, 25% in industrialized countries and<br />
10% in Central and Eastern Europe and <str<strong>on</strong>g>the</str<strong>on</strong>g> former Soviet Uni<strong>on</strong> countries in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> last five years. However, demand for n<strong>on</strong>-cott<strong>on</strong> fibers has increased at a<br />
faster rate in developed and developing countries. Demand for textile fiber is<br />
increasing with <str<strong>on</strong>g>the</str<strong>on</strong>g> increase in populati<strong>on</strong>, but preference for syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fibers is<br />
driving <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> share to new lows.<br />
Percent<br />
80<br />
60<br />
40<br />
20<br />
SHARE OF COTTON IN FIBER USE<br />
(End Use C<strong>on</strong>sumpti<strong>on</strong>)<br />
0<br />
1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004<br />
Source: Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee (2003a).<br />
Major uses <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> are men’s wear, ladies’ wear, towels, bedding and fabric<br />
for furniture. O<str<strong>on</strong>g>the</str<strong>on</strong>g>r natural fibers are not comparable with cott<strong>on</strong> due to coarse,<br />
irregular and hard fibers difficult to process, and also <str<strong>on</strong>g>the</str<strong>on</strong>g>ir producti<strong>on</strong> is low.<br />
46
Cott<strong>on</strong> has dominated <str<strong>on</strong>g>the</str<strong>on</strong>g> natural fiber market and will c<strong>on</strong>tinue to do so.<br />
Cott<strong>on</strong> also has multifarious advantages over man-made fibers, <str<strong>on</strong>g>the</str<strong>on</strong>g> most<br />
advocated being wear comfort. The cott<strong>on</strong> fiber is fine, s<str<strong>on</strong>g>of</str<strong>on</strong>g>t, has low fricti<strong>on</strong>,<br />
no electrostatic charge and can absorb humidity. Cott<strong>on</strong> can be produced in<br />
large quantities and processed at high speeds but still <str<strong>on</strong>g>the</str<strong>on</strong>g> share <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> is<br />
declining.<br />
2. Lack <str<strong>on</strong>g>of</str<strong>on</strong>g> Promoti<strong>on</strong><br />
Cott<strong>on</strong> is a fine fiber but no internati<strong>on</strong>al instituti<strong>on</strong> has <str<strong>on</strong>g>the</str<strong>on</strong>g> mandate to promote<br />
cott<strong>on</strong>. Experience shows that <str<strong>on</strong>g>the</str<strong>on</strong>g> share <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> has not declined and if so it<br />
has declined <strong>on</strong>ly a little in countries that have implemented programs to<br />
promote cott<strong>on</strong> against syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fibers. The Internati<strong>on</strong>al Institute <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong>,<br />
funded by cott<strong>on</strong> producing countries, which promoted cott<strong>on</strong> for years, was<br />
closed in 1994, after years <str<strong>on</strong>g>of</str<strong>on</strong>g> serious financial c<strong>on</strong>straints. Individual countries<br />
have undertaken programs, but <str<strong>on</strong>g>the</str<strong>on</strong>g> number <str<strong>on</strong>g>of</str<strong>on</strong>g> such countries is limited. Serious<br />
efforts backed by huge financial c<strong>on</strong>tributi<strong>on</strong>s by <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector have been<br />
made in <str<strong>on</strong>g>the</str<strong>on</strong>g> USA, where <str<strong>on</strong>g>the</str<strong>on</strong>g> share <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> am<strong>on</strong>g fibers c<strong>on</strong>sumed<br />
domestically has increased.<br />
Slow growth in demand caused by competiti<strong>on</strong> with syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tics reduces <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
income potential from cott<strong>on</strong> producti<strong>on</strong>. There is abundant research showing<br />
that when c<strong>on</strong>sumers are aware <str<strong>on</strong>g>of</str<strong>on</strong>g> fiber c<strong>on</strong>tent, <str<strong>on</strong>g>the</str<strong>on</strong>g>y c<strong>on</strong>sistently choose cott<strong>on</strong><br />
products. However, <strong>on</strong>ly 59 out <str<strong>on</strong>g>of</str<strong>on</strong>g> 166 countries surveyed have laws requiring<br />
that fiber c<strong>on</strong>tent be labeled in products sold at retail. C<strong>on</strong>sequently, many<br />
c<strong>on</strong>sumers are not able to readily identify <str<strong>on</strong>g>the</str<strong>on</strong>g> fiber c<strong>on</strong>tent <str<strong>on</strong>g>of</str<strong>on</strong>g> products <str<strong>on</strong>g>of</str<strong>on</strong>g>fered<br />
for sale in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir countries, thus inhibiting efforts to boost retail level demand for<br />
cott<strong>on</strong>. The support <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al community to require fiber c<strong>on</strong>tent<br />
labeling <str<strong>on</strong>g>of</str<strong>on</strong>g> products sold at retail can help to boost demand for cott<strong>on</strong>.<br />
3. Affordability<br />
Cott<strong>on</strong> has not been able to maintain its str<strong>on</strong>g positi<strong>on</strong> due to <str<strong>on</strong>g>the</str<strong>on</strong>g> price at<br />
which syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fibers can be produced. The price <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> has not increased in<br />
real terms but <str<strong>on</strong>g>the</str<strong>on</strong>g> price <str<strong>on</strong>g>of</str<strong>on</strong>g> syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fibers has declined. Studies suggest that <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
price factor is resp<strong>on</strong>sible for 30% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> decline in cott<strong>on</strong>’s share while all<br />
o<str<strong>on</strong>g>the</str<strong>on</strong>g>r factors toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r c<strong>on</strong>tributed to a 70% decline in cott<strong>on</strong>’s share. The<br />
c<strong>on</strong>sumer has a choice, but higher prices for cott<strong>on</strong> goods, particularly in<br />
47
developing countries, limit his buying power to n<strong>on</strong>-cott<strong>on</strong> goods. Easy care <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fibers also attracts <str<strong>on</strong>g>the</str<strong>on</strong>g> low-income c<strong>on</strong>sumer.<br />
4. Internati<strong>on</strong>al Forum for Cott<strong>on</strong> Promoti<strong>on</strong><br />
ICAC c<strong>on</strong>sidered various opti<strong>on</strong>s to enhance cott<strong>on</strong> demand by promoting it<br />
al<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> lines <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. programs. In <str<strong>on</strong>g>the</str<strong>on</strong>g> USA, Cott<strong>on</strong> Incorporated has <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
exclusive resp<strong>on</strong>sibility <str<strong>on</strong>g>of</str<strong>on</strong>g> promoting cott<strong>on</strong>. A variety <str<strong>on</strong>g>of</str<strong>on</strong>g> programs have been<br />
implemented that are truly pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>al and target specific. The slogan “The<br />
Fabric <str<strong>on</strong>g>of</str<strong>on</strong>g> Our Lives” is popular and recognized in <str<strong>on</strong>g>the</str<strong>on</strong>g> USA. The idea <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
launching a similar global program is expensive and has been already<br />
aband<strong>on</strong>ed by governments. However, a much smaller scale effort has been<br />
started under <str<strong>on</strong>g>the</str<strong>on</strong>g> auspices <str<strong>on</strong>g>of</str<strong>on</strong>g> ICAC, but it is entirely supported by private<br />
companies and membership is voluntary. The Internati<strong>on</strong>al Forum for Cott<strong>on</strong><br />
Promoti<strong>on</strong> (IFCP) was established in 2000 with <str<strong>on</strong>g>the</str<strong>on</strong>g> mandate to initiate<br />
proactive efforts <strong>on</strong> behalf <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry to increase cott<strong>on</strong>'s share <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
domestic fiber markets at <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>sumer level. The Internati<strong>on</strong>al Forum for<br />
Cott<strong>on</strong> Promoti<strong>on</strong> is a n<strong>on</strong>-governmental body composed <str<strong>on</strong>g>of</str<strong>on</strong>g> nati<strong>on</strong>al and<br />
internati<strong>on</strong>al cott<strong>on</strong> industry organizati<strong>on</strong>s. The Forum serves as a<br />
clearinghouse for informati<strong>on</strong> about proven techniques <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> promoti<strong>on</strong>,<br />
best practices in retail-level communicati<strong>on</strong>, and cost-effective measures <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
boosting c<strong>on</strong>sumer demand. Since its initiati<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> Forum has undertaken a<br />
number <str<strong>on</strong>g>of</str<strong>on</strong>g> initiatives in support <str<strong>on</strong>g>of</str<strong>on</strong>g> its missi<strong>on</strong>, including research into<br />
internati<strong>on</strong>al fiber labeling laws, updates <strong>on</strong> <strong>on</strong>going nati<strong>on</strong>al promoti<strong>on</strong>al<br />
programs, and presentati<strong>on</strong>s at various forums. Currently, <str<strong>on</strong>g>the</str<strong>on</strong>g> Internati<strong>on</strong>al<br />
Forum for Cott<strong>on</strong> Promoti<strong>on</strong> includes eighteen member organizati<strong>on</strong>s from<br />
fifteen countries.<br />
5. A Tough Competiti<strong>on</strong> with Syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tics<br />
There is no generic promoti<strong>on</strong> from <str<strong>on</strong>g>the</str<strong>on</strong>g> chemical fiber industry. However,<br />
each chemical fiber producer promotes his own brand and each brand <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
fibers has a separate budget. No exact statistics are available, but it is<br />
estimated that <str<strong>on</strong>g>the</str<strong>on</strong>g> total budget spent <strong>on</strong> promoting <str<strong>on</strong>g>the</str<strong>on</strong>g> chemical fiber industry<br />
runs into hundreds <str<strong>on</strong>g>of</str<strong>on</strong>g> milli<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> dollars. The chemical fiber industry is<br />
fighting tough to compete with cott<strong>on</strong>. One <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> latest approaches in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
chemical fiber industry has been <str<strong>on</strong>g>the</str<strong>on</strong>g> preferred character <str<strong>on</strong>g>of</str<strong>on</strong>g> chemical fibers<br />
adding to <str<strong>on</strong>g>the</str<strong>on</strong>g>m <str<strong>on</strong>g>the</str<strong>on</strong>g> unique characteristics <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>, like comfort. One such<br />
product is Supplex, which comes in various types, light weight, wrinkle free,<br />
48
flexible, does not shrink or fade, fast drying, carefree and str<strong>on</strong>g. Cott<strong>on</strong> is<br />
losing in active lifestyle and sports wear to polyester, where stretch,<br />
micr<str<strong>on</strong>g>of</str<strong>on</strong>g>ibers, antimicrobial and n<strong>on</strong>-wovens are gaining popularity. Staple and<br />
filament polyester producers are trying to expand horiz<strong>on</strong>tal uses <str<strong>on</strong>g>of</str<strong>on</strong>g> polyester<br />
products for opening new markets. Polyester producers are also trying hard to<br />
beat <str<strong>on</strong>g>the</str<strong>on</strong>g> s<str<strong>on</strong>g>of</str<strong>on</strong>g>t feel and appearance <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>. The chemical fiber is developing<br />
specific products with special characteristics to suit specific uses.<br />
The chemical fiber industry experiments and develops new products in labs<br />
as opposed to field and natural c<strong>on</strong>diti<strong>on</strong>s in <str<strong>on</strong>g>the</str<strong>on</strong>g> case <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
natural fibers. Not <strong>on</strong>ly <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>diti<strong>on</strong>s are different but also <str<strong>on</strong>g>the</str<strong>on</strong>g> experiments<br />
and developments take much l<strong>on</strong>ger in natural fibers compared to manmade<br />
fibers. The manmade fiber industry has a much higher flexibility to develop<br />
new products. Some latest developments <str<strong>on</strong>g>of</str<strong>on</strong>g> chemical fibers that do not use<br />
petroleum-based products are a new area that favors chemical fibers. The<br />
manmade fiber industry has <str<strong>on</strong>g>the</str<strong>on</strong>g> disadvantage <str<strong>on</strong>g>of</str<strong>on</strong>g> being expensive in certain<br />
c<strong>on</strong>diti<strong>on</strong>s. There is no internati<strong>on</strong>al organizati<strong>on</strong> for chemical fibers, like <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
ICAC for cott<strong>on</strong>, and <str<strong>on</strong>g>the</str<strong>on</strong>g> chemical fiber industry is a small group compared<br />
to <str<strong>on</strong>g>the</str<strong>on</strong>g> milli<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> growers spread over 60 countries. The chemical fiber<br />
industry will c<strong>on</strong>tinue to invent new technologies and c<strong>on</strong>sumer oriented<br />
products, and promote <str<strong>on</strong>g>the</str<strong>on</strong>g>m for specific segments <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> market.<br />
In order for cott<strong>on</strong> to remain competitive with manmade fibers and retain its<br />
current level <str<strong>on</strong>g>of</str<strong>on</strong>g> market share, cott<strong>on</strong> must find new uses and technologies to<br />
improve <str<strong>on</strong>g>the</str<strong>on</strong>g> performance properties <str<strong>on</strong>g>of</str<strong>on</strong>g> yarn. Yarn producing technology must<br />
be reoriented to produce yarn that is most suited to specific end use products,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> approach followed in <str<strong>on</strong>g>the</str<strong>on</strong>g> chemical fiber industry. Similarly, efforts need<br />
to be made to infuse into cott<strong>on</strong> some <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> best qualities <str<strong>on</strong>g>of</str<strong>on</strong>g> manmade fibers<br />
like easy care, quick dry and lightweight. The cott<strong>on</strong> industry must also work<br />
with <str<strong>on</strong>g>the</str<strong>on</strong>g> chemical fiber industry to find more uses for cott<strong>on</strong> and chemical<br />
fiber blends. The future <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> lies in <str<strong>on</strong>g>the</str<strong>on</strong>g> compatibility with syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic<br />
fibers in quality, pricing, performance and advertising. O<str<strong>on</strong>g>the</str<strong>on</strong>g>r measures that<br />
could c<strong>on</strong>tribute to <str<strong>on</strong>g>the</str<strong>on</strong>g> competitiveness <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> are:<br />
• Governments must make c<strong>on</strong>certed efforts to enhance cott<strong>on</strong><br />
c<strong>on</strong>sumpti<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir countries.<br />
• The public sector should actively involve <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector in<br />
expanding <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>sumpti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>.<br />
• Governments in collaborati<strong>on</strong> with <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector should work<br />
toward increasing yields for reducing <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong>.<br />
• Cott<strong>on</strong> quality should be improved particularly with respect to<br />
c<strong>on</strong>taminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> with n<strong>on</strong>-cott<strong>on</strong> material.<br />
49
Share <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> am<strong>on</strong>g fibers c<strong>on</strong>sumed in <str<strong>on</strong>g>the</str<strong>on</strong>g> world is declining.<br />
Lack <str<strong>on</strong>g>of</str<strong>on</strong>g> promoti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> is affecting demand for cott<strong>on</strong>.<br />
Cott<strong>on</strong> should be improved in quality to better compete with syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fibers.<br />
VI. ROLE OF THE PRIVATE SECTOR IN COTTON<br />
Cott<strong>on</strong> producti<strong>on</strong> and processing is a l<strong>on</strong>g chain involving varied inputs and<br />
operati<strong>on</strong>s. Countries have tried to amalgamate all <str<strong>on</strong>g>the</str<strong>on</strong>g>se operati<strong>on</strong>s in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
public sector and failed. What is needed at this time is <str<strong>on</strong>g>the</str<strong>on</strong>g> public sector<br />
working with <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector so that both benefit from each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r.<br />
However, resp<strong>on</strong>sibilities must be assigned and well determined because<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>re has to be a relative role for each sector. It would be wr<strong>on</strong>g to believe<br />
that <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector can flourish without support from <str<strong>on</strong>g>the</str<strong>on</strong>g> public sector.<br />
Governments started nati<strong>on</strong>alizati<strong>on</strong> processes but so<strong>on</strong> reverted to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
private sector and, at this time, <str<strong>on</strong>g>the</str<strong>on</strong>g> trend is that both sectors share<br />
resp<strong>on</strong>sibilities. For quite some time now internati<strong>on</strong>al lending agencies have<br />
been imposing ec<strong>on</strong>omic liberalizati<strong>on</strong> policies that require <str<strong>on</strong>g>the</str<strong>on</strong>g> restructuring<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sectors in many countries. With respect to cott<strong>on</strong>, some famous<br />
cases are Egypt and many African countries. In most cases, <str<strong>on</strong>g>the</str<strong>on</strong>g> agenda has<br />
been left incomplete, while in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r cases good progress has been made and<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> sector is well <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> way to liberalizati<strong>on</strong>.<br />
The breakup <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> former Soviet Uni<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> lack <str<strong>on</strong>g>of</str<strong>on</strong>g> readiness <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
private sector to takeover resp<strong>on</strong>sibilities have taught us many good less<strong>on</strong>s.<br />
The private sector must come forward to accept its share <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>tributi<strong>on</strong>s to<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al ec<strong>on</strong>omies, but it is also critical that private sector participants be<br />
capable and ready to perform resp<strong>on</strong>sibly and successfully. In this regard,<br />
governments should play <str<strong>on</strong>g>the</str<strong>on</strong>g> role <str<strong>on</strong>g>of</str<strong>on</strong>g> assisting different stakeholders to grasp<br />
different opportunities and resolve issues and problems. On <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r hand,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>re is no doubt that governments should be resp<strong>on</strong>sible for supervising and<br />
defending <str<strong>on</strong>g>the</str<strong>on</strong>g> social and envir<strong>on</strong>mental dimensi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong>.<br />
It is <str<strong>on</strong>g>the</str<strong>on</strong>g> resp<strong>on</strong>sibility <str<strong>on</strong>g>of</str<strong>on</strong>g> governments to create c<strong>on</strong>diti<strong>on</strong>s where ec<strong>on</strong>omic<br />
investment is secure, o<str<strong>on</strong>g>the</str<strong>on</strong>g>rwise, <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector will not be able to invest<br />
with c<strong>on</strong>fidence. The private sector needs to be encouraged and assured that it<br />
will not be deprived <str<strong>on</strong>g>of</str<strong>on</strong>g> ownership and management <str<strong>on</strong>g>of</str<strong>on</strong>g> its industrial<br />
enterprises built over a period <str<strong>on</strong>g>of</str<strong>on</strong>g> hard work. There is no doubt that <str<strong>on</strong>g>the</str<strong>on</strong>g> private<br />
50
sector is motivated by ec<strong>on</strong>omic interests that cannot be compromised, and<br />
that is how governments could work with <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector to help boost<br />
cott<strong>on</strong> producti<strong>on</strong>, c<strong>on</strong>sumpti<strong>on</strong> and trade in IDB member countries. The l<strong>on</strong>g<br />
chain <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> and processing provides ample opportunities for<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> private sector. Many partnerships can be quoted as successful examples in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> world including IDB member countries. While <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>alizati<strong>on</strong> process<br />
badly failed in Pakistan, <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> ginning industry and <str<strong>on</strong>g>the</str<strong>on</strong>g> textile industry<br />
successfully managed to flourish in <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector. Some o<str<strong>on</strong>g>the</str<strong>on</strong>g>r members<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB, in particular <str<strong>on</strong>g>the</str<strong>on</strong>g> Central Asian countries, are still struggling to<br />
establish a chain <str<strong>on</strong>g>of</str<strong>on</strong>g> private input supply systems. Slightly different but a close<br />
exercise is needed in <str<strong>on</strong>g>the</str<strong>on</strong>g> West African countries.<br />
The textile industry is <str<strong>on</strong>g>the</str<strong>on</strong>g> most private industry in IDB member countries.<br />
Expected c<strong>on</strong>sumpti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> 5.2 milli<strong>on</strong> t<strong>on</strong>s or 25% <str<strong>on</strong>g>of</str<strong>on</strong>g> world c<strong>on</strong>sumpti<strong>on</strong> in<br />
2003/04 is almost all in <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector, which has adapted to <str<strong>on</strong>g>the</str<strong>on</strong>g> changing<br />
new technologies in <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning industry very fast in order to remain<br />
competitive in <str<strong>on</strong>g>the</str<strong>on</strong>g> market. Public sector units in countries like Sudan have<br />
been inoperative for years now. Ginning and input supply are comparatively<br />
less c<strong>on</strong>trolled by governments, but ultimately <str<strong>on</strong>g>the</str<strong>on</strong>g>y would have to be shifted<br />
to <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector. Implementati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> government c<strong>on</strong>trolled systems in<br />
Africa, particularly in West African countries, where cott<strong>on</strong> companies,<br />
government departments or agencies are <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly source <str<strong>on</strong>g>of</str<strong>on</strong>g> input supply, have<br />
had c<strong>on</strong>sequences because input supplies are not adequate and farmers have<br />
no choice in choosing inputs. Fertilizers are diluted and directed to o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
crops. The private sector is more flexible and potentially better suited to<br />
adjust to <str<strong>on</strong>g>the</str<strong>on</strong>g> changing circumstances.<br />
The private sector has already played a successful role in <str<strong>on</strong>g>the</str<strong>on</strong>g> pesticide<br />
industry in many IDB countries and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r cott<strong>on</strong> producing countries. The<br />
pesticide business was handed over to <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector, which employed<br />
well-educated and experienced entomologists and carried out aggressive<br />
campaigns through c<strong>on</strong>tacts with cott<strong>on</strong> growers to educate <str<strong>on</strong>g>the</str<strong>on</strong>g>m in <str<strong>on</strong>g>the</str<strong>on</strong>g> right<br />
use <str<strong>on</strong>g>of</str<strong>on</strong>g> various products. While pesticide companies were promoting <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
products, <str<strong>on</strong>g>the</str<strong>on</strong>g>y were also educating farmers in producti<strong>on</strong> technology.<br />
Companies employed young and good communicator entomologists and<br />
provided <str<strong>on</strong>g>the</str<strong>on</strong>g>m with extensive training before sending <str<strong>on</strong>g>the</str<strong>on</strong>g>m to field duties.<br />
Some discouraging stories can be reported, but when all is said and d<strong>on</strong>e,<br />
pesticide companies can rightly claim <str<strong>on</strong>g>the</str<strong>on</strong>g>ir share <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> success stories in<br />
many countries.<br />
Cott<strong>on</strong> planting seed is in <str<strong>on</strong>g>the</str<strong>on</strong>g> hands <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> public sector in most IDB<br />
countries. Even if private farms are used for multiplicati<strong>on</strong>, quality c<strong>on</strong>trol,<br />
51
processing, handling and sale <str<strong>on</strong>g>of</str<strong>on</strong>g> planting seed is c<strong>on</strong>trolled by government<br />
agencies. Private companies could perform <str<strong>on</strong>g>the</str<strong>on</strong>g> same functi<strong>on</strong>s too. Instead <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<strong>on</strong>ly <strong>on</strong>e public sector company or government department, healthy<br />
competiti<strong>on</strong> am<strong>on</strong>g several companies could improve quality. More than half<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> seed used in India to plant an average <str<strong>on</strong>g>of</str<strong>on</strong>g> 8.5 milli<strong>on</strong> hectares every<br />
year is supplied by <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector. All seed supplied in Australia and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
USA is also in private sector hands.<br />
In IDB countries, <strong>on</strong>ly government departments, whe<str<strong>on</strong>g>the</str<strong>on</strong>g>r in <str<strong>on</strong>g>the</str<strong>on</strong>g> federal or<br />
state governments, are resp<strong>on</strong>sible for developing new varieties. Breeding <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
new varieties can be easily transferred to <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector under basic<br />
standards set by governments. IDB countries are not ready to enforce selfassessment<br />
quality standards yet. Thus, governments could retain c<strong>on</strong>trol <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
quality standards and invite private companies to breed varieties and submit<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>m for approval as commercial varieties. The variety approval process,<br />
which is already established in most countries, could be tuned to <str<strong>on</strong>g>the</str<strong>on</strong>g> new<br />
situati<strong>on</strong>, and public sector funds could be directed to o<str<strong>on</strong>g>the</str<strong>on</strong>g>r areas that deserve<br />
attenti<strong>on</strong>. There is also a need to bring toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r <str<strong>on</strong>g>the</str<strong>on</strong>g> process <str<strong>on</strong>g>of</str<strong>on</strong>g> development <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
new varieties and producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> planting seed. Such a system does not exist in<br />
IDB cott<strong>on</strong>-producing member countries, but is <str<strong>on</strong>g>the</str<strong>on</strong>g> right way to follow.<br />
Support <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector and cooperati<strong>on</strong> with private enterprises has to<br />
be an integral part <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> and development. The private sector,<br />
as <str<strong>on</strong>g>the</str<strong>on</strong>g> engine for growth and <str<strong>on</strong>g>the</str<strong>on</strong>g> main provider <str<strong>on</strong>g>of</str<strong>on</strong>g> employment, has a key role<br />
to play in sustainable cott<strong>on</strong> development and integrati<strong>on</strong> into <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong><br />
ec<strong>on</strong>omy. After studying <str<strong>on</strong>g>the</str<strong>on</strong>g> new private ec<strong>on</strong>omies, it is true that cott<strong>on</strong><br />
farmers do not get accustomed quickly to a private input supply system.<br />
Likewise, participants in <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector do not have experience working<br />
directly with small-scale producers. In additi<strong>on</strong>, extensi<strong>on</strong> systems for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
provisi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> informati<strong>on</strong> to farmers, which were formerly supported by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
nati<strong>on</strong>al cott<strong>on</strong> companies, have broken down, and farmers have nowhere to<br />
go for advice <strong>on</strong> producti<strong>on</strong> practices. The nature <str<strong>on</strong>g>of</str<strong>on</strong>g> problems varies am<strong>on</strong>g<br />
countries depending up<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> status <str<strong>on</strong>g>of</str<strong>on</strong>g> reforms already implemented. In many<br />
cases, farmers are experiencing increases in <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> and<br />
insufficient access to inputs.<br />
Many government efforts made to diversify <str<strong>on</strong>g>the</str<strong>on</strong>g> productive capacities <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
developing countries <str<strong>on</strong>g>of</str<strong>on</strong>g>ten face serious impediments due to lack <str<strong>on</strong>g>of</str<strong>on</strong>g> adequate<br />
marketing infrastructure. A reliable and well functi<strong>on</strong>ing private financial<br />
sector can be a prec<strong>on</strong>diti<strong>on</strong> for ec<strong>on</strong>omic development at all levels. Private<br />
sector involvement, however, will depend <strong>on</strong> expected rates <str<strong>on</strong>g>of</str<strong>on</strong>g> return.<br />
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The role <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector must be recognized and <str<strong>on</strong>g>the</str<strong>on</strong>g> public and private<br />
sectors should work toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r for <str<strong>on</strong>g>the</str<strong>on</strong>g> development <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>.<br />
VII. FRAMEWORK FOR ENHANCING COOPERATION AMONG<br />
IDB COTTON PRODUCING COUNTRIES<br />
Most IDB countries face deficiencies in essential infrastructure such as weak<br />
management capacity, insufficient instituti<strong>on</strong>al development, low levels <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
technology, inefficient communicati<strong>on</strong>, and marketing channels that<br />
undermine trade efficiency and development. In additi<strong>on</strong> to generating lower<br />
prices, <str<strong>on</strong>g>the</str<strong>on</strong>g>se factors play a large part in <str<strong>on</strong>g>the</str<strong>on</strong>g> n<strong>on</strong>-competitiveness <str<strong>on</strong>g>of</str<strong>on</strong>g> many<br />
developing IDB countries. These factors are also resp<strong>on</strong>sible for an ec<strong>on</strong>omic<br />
structure predominantly founded <strong>on</strong> commodity producti<strong>on</strong> and commodity<br />
exports. Some IDB member countries have achieved tremendous success in<br />
exporting value added goods, while many o<str<strong>on</strong>g>the</str<strong>on</strong>g>r members are working hard to<br />
achieve <str<strong>on</strong>g>the</str<strong>on</strong>g> same goal. Countries are interested but limited due to many<br />
reas<strong>on</strong>s including insufficient instituti<strong>on</strong>al development apart from financial<br />
limitati<strong>on</strong>s. On <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> side, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a great deal <str<strong>on</strong>g>of</str<strong>on</strong>g> experience to share<br />
am<strong>on</strong>g IDB countries. Some IDB member countries have acquired success<br />
comparable to n<strong>on</strong>e o<str<strong>on</strong>g>the</str<strong>on</strong>g>r in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. The following acti<strong>on</strong>s are proposed to<br />
IDB for improving productivity and competitiveness <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> and<br />
cooperati<strong>on</strong> am<strong>on</strong>g IDB member countries.<br />
1. Share Experiences<br />
IDB member countries can learn from <str<strong>on</strong>g>the</str<strong>on</strong>g>ir fellow member countries in<br />
many fields. Uzbekistan has <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> most successful biological c<strong>on</strong>trol<br />
systems as a result <str<strong>on</strong>g>of</str<strong>on</strong>g> which pesticide use remains at an average <str<strong>on</strong>g>of</str<strong>on</strong>g> 1-2 sprays<br />
per seas<strong>on</strong>. Cott<strong>on</strong> yields have come down due to disrupti<strong>on</strong>s in <str<strong>on</strong>g>the</str<strong>on</strong>g> input<br />
supply system and poor soil fertility, but <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> system is quite<br />
efficient. In Syria, less than <strong>on</strong>e percent <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> area is sprayed with<br />
insecticides, which is unique in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. The average yield in Syria in<br />
2003/04 was 1,364 kg lint/ha, <str<strong>on</strong>g>the</str<strong>on</strong>g> third highest in <str<strong>on</strong>g>the</str<strong>on</strong>g> world and 215% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
world average. Turkey has a very successful farmers’ cooperative system and<br />
yields are also high: 1,286 kg lint/ha in 2003/04. Pakistan has a very str<strong>on</strong>g<br />
breeding program and <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> best seed producti<strong>on</strong> systems am<strong>on</strong>g cott<strong>on</strong><br />
producing countries in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. At present, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is hardly any sharing <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
informati<strong>on</strong> am<strong>on</strong>g IDB member countries, something that needs to be<br />
53
enhanced. IDB member countries could greatly benefit if IDB could provide<br />
a framework for sharing experiences am<strong>on</strong>g member countries.<br />
2. Exchange <str<strong>on</strong>g>of</str<strong>on</strong>g> Germplasm<br />
In <str<strong>on</strong>g>the</str<strong>on</strong>g> absence <str<strong>on</strong>g>of</str<strong>on</strong>g> an internati<strong>on</strong>al institute for cott<strong>on</strong> research, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is no<br />
formal way to exchange cott<strong>on</strong> germplasm. Good germplasm is <str<strong>on</strong>g>the</str<strong>on</strong>g> basis for<br />
any successful breeding program. Unfortunately, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is no informati<strong>on</strong><br />
available <strong>on</strong> what kind <str<strong>on</strong>g>of</str<strong>on</strong>g> germplasm is available in different countries. The<br />
Internati<strong>on</strong>al Plant Genetic Resources Institute <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> C<strong>on</strong>sultative <str<strong>on</strong>g>Group</str<strong>on</strong>g> <strong>on</strong><br />
Internati<strong>on</strong>al Agriculture Research (CGIAR) does not deal with cott<strong>on</strong>, and<br />
nei<str<strong>on</strong>g>the</str<strong>on</strong>g>r <str<strong>on</strong>g>the</str<strong>on</strong>g> most recently agreed Internati<strong>on</strong>al Treaty <strong>on</strong> Plant Genetic<br />
Resources includes cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> Multilateral System. Lack <str<strong>on</strong>g>of</str<strong>on</strong>g> access to<br />
germplasm is hampering breeders’ efforts and narrowing <str<strong>on</strong>g>the</str<strong>on</strong>g> genetic base in<br />
most countries. There is a need to establish an internati<strong>on</strong>al germplasm bank,<br />
and maybe <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB member countries could take <str<strong>on</strong>g>the</str<strong>on</strong>g> lead to establish<br />
such a facility and volunteer to serve <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB member countries. Such a<br />
facility should collect elite germplasm from all countries, maintain it and<br />
supply it <strong>on</strong> demand to researchers. The protocol to supply and receive<br />
specific accessi<strong>on</strong>s could be decided separately by a panel <str<strong>on</strong>g>of</str<strong>on</strong>g> experts.<br />
3. Genetic Engineering Technology<br />
It is estimated that 21% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world cott<strong>on</strong> area was planted to genetically<br />
engineered varieties in 2003/04, sharing about 30% <str<strong>on</strong>g>of</str<strong>on</strong>g> world producti<strong>on</strong> and<br />
34% <str<strong>on</strong>g>of</str<strong>on</strong>g> world trade. Eight countries have commercialized genetically<br />
engineered varieties but, with <str<strong>on</strong>g>the</str<strong>on</strong>g> excepti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Ind<strong>on</strong>esia, n<strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
IDB cott<strong>on</strong>-producing countries have commercially adopted <str<strong>on</strong>g>the</str<strong>on</strong>g> technology<br />
yet. The genetic engineering technology is scientific compared to o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
disciplines <str<strong>on</strong>g>of</str<strong>on</strong>g> research <strong>on</strong> cott<strong>on</strong>, expensive, and dominated by <str<strong>on</strong>g>the</str<strong>on</strong>g> private<br />
sector. The technology is not c<strong>on</strong>sumable, it is here to stay and will find its<br />
way into multiple uses. The high cost <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> technology and <str<strong>on</strong>g>the</str<strong>on</strong>g> lack <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
biosafety protocols/regulati<strong>on</strong>s is limiting its access in IDB member<br />
countries. The nature <str<strong>on</strong>g>of</str<strong>on</strong>g> future products, uncertain at this stage, is going to<br />
change, but <str<strong>on</strong>g>the</str<strong>on</strong>g> products developed so far using this technology are<br />
envir<strong>on</strong>mentally and technically safe. In order for IDB member countries to<br />
remain competitive in <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al cott<strong>on</strong> market, <str<strong>on</strong>g>the</str<strong>on</strong>g>y have to make use<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> such technologies. IDB could help member countries in <str<strong>on</strong>g>the</str<strong>on</strong>g> development<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> biosafety regulati<strong>on</strong>s while educating <str<strong>on</strong>g>the</str<strong>on</strong>g> public at <str<strong>on</strong>g>the</str<strong>on</strong>g> same time.<br />
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4. Cott<strong>on</strong> Network<br />
The lack <str<strong>on</strong>g>of</str<strong>on</strong>g> an internati<strong>on</strong>al research center <strong>on</strong> cott<strong>on</strong> is harming developing<br />
countries <str<strong>on</strong>g>the</str<strong>on</strong>g> most. In an effort to bring researchers toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r, ICAC supports<br />
world cott<strong>on</strong> research c<strong>on</strong>ferences and regi<strong>on</strong>al networks. The world cott<strong>on</strong><br />
research c<strong>on</strong>ferences, held every 4-5 years, are <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly events where cott<strong>on</strong><br />
researchers from across regi<strong>on</strong>s get to meet. Unfortunately, participati<strong>on</strong> is<br />
limited due to lack <str<strong>on</strong>g>of</str<strong>on</strong>g> funding. IDB may c<strong>on</strong>sider establishing and sp<strong>on</strong>soring<br />
its own cott<strong>on</strong> research network and starting a cott<strong>on</strong> newsletter, <strong>on</strong>-line or<br />
hard copy, to keep IDB countries c<strong>on</strong>nected to each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r.<br />
5. Training <strong>on</strong> Ginning<br />
Cott<strong>on</strong> has to be ginned before it is processed in a spinning mill or used in<br />
domestic products. Unfortunately, ginning is <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> least researched areas<br />
in cott<strong>on</strong>. The old system <str<strong>on</strong>g>of</str<strong>on</strong>g> saw ginning, developed by Ely Whitney in 1793,<br />
is still used for separating seeds from lint. Many new methods like Cage<br />
ginning and Templet<strong>on</strong> ginning have been tried, but n<strong>on</strong>e could be used <strong>on</strong> a<br />
commercial scale. However, significant improvements have been made in<br />
operati<strong>on</strong>s related to <str<strong>on</strong>g>the</str<strong>on</strong>g> actual process <str<strong>on</strong>g>of</str<strong>on</strong>g> ginning. Cleaning <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> prior to<br />
and after ginning is <strong>on</strong>e such area <str<strong>on</strong>g>of</str<strong>on</strong>g> improvement. New systems like<br />
“IntelliGin” have been commercialized and provide an optimum use <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
moisture, temperature and cleaning. IntelliGin is a computerized, <strong>on</strong>-line<br />
fiber quality measuring system that m<strong>on</strong>itors, c<strong>on</strong>trols and optimizes <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
cott<strong>on</strong> ginning process. Still, ginning inevitably causes some damage in<br />
quality. In order to best preserve <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> produced in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
field and cause <str<strong>on</strong>g>the</str<strong>on</strong>g> least damage during ginning, trained and qualified pers<strong>on</strong>s<br />
should operate gins. Gin machinery should be properly maintained by<br />
qualified people <strong>on</strong> an annual basis. Unfortunately, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is no center were<br />
people could be trained in <str<strong>on</strong>g>the</str<strong>on</strong>g> best ginning practices. Training could include<br />
pers<strong>on</strong>nel in managerial skills, electrical work and repair <str<strong>on</strong>g>of</str<strong>on</strong>g> machines. Any<br />
help from <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB to establish such a training center will improve quality and<br />
generate better prices to IDB member countries.<br />
6. Fiber Quality Evaluati<strong>on</strong><br />
Cott<strong>on</strong> is sold based <strong>on</strong> its quality and any efforts to best assess it are in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
interest <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producers. Spinners are willing to pay higher prices for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
reliability <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> data <strong>on</strong> quality, which is <str<strong>on</strong>g>the</str<strong>on</strong>g> basis for negotiating prices.<br />
55
There is no doubt that cott<strong>on</strong> should be classed using rapid instrument based<br />
testing. The most amount <str<strong>on</strong>g>of</str<strong>on</strong>g> informati<strong>on</strong> <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> qualitative value <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong><br />
always helps to bring higher prices and results in fewer disputes am<strong>on</strong>g<br />
buyers and sellers. The establishment <str<strong>on</strong>g>of</str<strong>on</strong>g> a high standard reputed classing lab<br />
in <str<strong>on</strong>g>the</str<strong>on</strong>g> West African countries will help <str<strong>on</strong>g>the</str<strong>on</strong>g>m to get better prices and improve<br />
cott<strong>on</strong> competitiveness. West African countries are going through a<br />
transiti<strong>on</strong>al stage <str<strong>on</strong>g>of</str<strong>on</strong>g> privatizati<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> establishment <str<strong>on</strong>g>of</str<strong>on</strong>g> such a lab could<br />
become a part <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> new system. The data generated at <str<strong>on</strong>g>the</str<strong>on</strong>g> classing lab could<br />
be used as an electr<strong>on</strong>ic platform for <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>-line trading <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>.<br />
7. Cost <str<strong>on</strong>g>of</str<strong>on</strong>g> Producti<strong>on</strong><br />
Many countries are at <str<strong>on</strong>g>the</str<strong>on</strong>g> verge <str<strong>on</strong>g>of</str<strong>on</strong>g> stopping cott<strong>on</strong> producti<strong>on</strong> due to <str<strong>on</strong>g>the</str<strong>on</strong>g> high<br />
cost involved. There are two ways to deal with <str<strong>on</strong>g>the</str<strong>on</strong>g> issue: increase yields<br />
without increases in <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> or reduce <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong><br />
without a loss in yield. Nei<str<strong>on</strong>g>the</str<strong>on</strong>g>r is easy but both have a potential and <strong>on</strong>ly new<br />
technologies can help. IDB member countries must explore and utilize new<br />
technologies to reduce <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> and increase yields in order to<br />
improve producti<strong>on</strong> efficiency.<br />
8. Find New Uses <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong><br />
All cott<strong>on</strong>-producing countries wish to expand <str<strong>on</strong>g>the</str<strong>on</strong>g> demand for cott<strong>on</strong>. Higher<br />
demand means expectati<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> higher prices for producing countries. Apart<br />
from promoti<strong>on</strong>al campaigns, which IDB member countries should start <strong>on</strong><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>ir own or with <str<strong>on</strong>g>the</str<strong>on</strong>g> help <str<strong>on</strong>g>of</str<strong>on</strong>g> internati<strong>on</strong>al organizati<strong>on</strong>s, cott<strong>on</strong> producing<br />
and c<strong>on</strong>suming IDB members must work toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r to find more uses for<br />
cott<strong>on</strong>. More uses for cott<strong>on</strong> are not <strong>on</strong>ly found in <str<strong>on</strong>g>the</str<strong>on</strong>g> manufacture <str<strong>on</strong>g>of</str<strong>on</strong>g> pure<br />
cott<strong>on</strong> products, but also in mixes with manmade fibers. The finishing and<br />
dyeing <str<strong>on</strong>g>of</str<strong>on</strong>g> pure and mixed cott<strong>on</strong> products is a way to best meet users’<br />
demands and an integral way <str<strong>on</strong>g>of</str<strong>on</strong>g> enhancing <str<strong>on</strong>g>the</str<strong>on</strong>g> demand for cott<strong>on</strong>. IDB could<br />
help its cott<strong>on</strong>-producing members by sp<strong>on</strong>soring small projects that are<br />
helpful to improve <str<strong>on</strong>g>the</str<strong>on</strong>g> competitiveness <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> and its use in<br />
spinning, weaving and textiles.<br />
9. Eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Textile Quotas<br />
The eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> quotas in 2005 will bring many changes in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
internati<strong>on</strong>al textile industry affecting both, IDB cott<strong>on</strong> producing and<br />
56
c<strong>on</strong>suming countries. The textile trade is expected to become more quality<br />
cautious and price competitive. Many countries, particularly China<br />
(Mainland), India, Pakistan and Turkey, have expanded <str<strong>on</strong>g>the</str<strong>on</strong>g>ir textile industry<br />
and grabbed a larger share <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> textile market. Eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> quotas will<br />
provide an opportunity for large competitive textile producers to increase<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>ir market share. However, <str<strong>on</strong>g>the</str<strong>on</strong>g> eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> quotas will also affect some<br />
IDB member countries like Bangladesh, who were guaranteed a specific<br />
share <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> textile market. Eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> quotas will intensify competiti<strong>on</strong> in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> open market, and low cost textile industries will benefit over n<strong>on</strong>-efficient<br />
industries. The end <str<strong>on</strong>g>of</str<strong>on</strong>g> quotas will lower <str<strong>on</strong>g>the</str<strong>on</strong>g> barriers to entry by new exporters<br />
with a wider range <str<strong>on</strong>g>of</str<strong>on</strong>g> products. IDB member countries must be ready for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
changes expected to come from <str<strong>on</strong>g>the</str<strong>on</strong>g> eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> quotas and IDB could help<br />
to prepare its members for <str<strong>on</strong>g>the</str<strong>on</strong>g> changing textile trade world.<br />
10. Input Supply and Pricing<br />
It is important to talk about <str<strong>on</strong>g>the</str<strong>on</strong>g> West African countries as a group. The West<br />
African countries are <str<strong>on</strong>g>the</str<strong>on</strong>g> largest number <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producing countries am<strong>on</strong>g<br />
IDB member countries, and <str<strong>on</strong>g>the</str<strong>on</strong>g>ir producti<strong>on</strong> system has great similarity. The<br />
input supply system must be improved through <str<strong>on</strong>g>the</str<strong>on</strong>g> introducti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> a private<br />
sector resp<strong>on</strong>sible for <str<strong>on</strong>g>the</str<strong>on</strong>g> supply <str<strong>on</strong>g>of</str<strong>on</strong>g> seed, fertilizers and insecticides.<br />
Countries are in <str<strong>on</strong>g>the</str<strong>on</strong>g> process <str<strong>on</strong>g>of</str<strong>on</strong>g> doing it, but progress has been slow. There is a<br />
need to expedite <str<strong>on</strong>g>the</str<strong>on</strong>g> process and cott<strong>on</strong> growers must have free and easy<br />
access to inputs.<br />
Cott<strong>on</strong> companies are <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly buyers in <str<strong>on</strong>g>the</str<strong>on</strong>g> West African countries. There is<br />
no competiti<strong>on</strong> in pricing and <str<strong>on</strong>g>the</str<strong>on</strong>g> current system in most countries provides<br />
<strong>on</strong>ly a limited number <str<strong>on</strong>g>of</str<strong>on</strong>g> seedcott<strong>on</strong> grades. The pricing system needs to be<br />
improved through <str<strong>on</strong>g>the</str<strong>on</strong>g> introducti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> more buyers, more seedcott<strong>on</strong> grades<br />
and encouragement to produce c<strong>on</strong>taminati<strong>on</strong>-free cott<strong>on</strong>. Price discounts<br />
based <strong>on</strong> c<strong>on</strong>taminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>, not from trash (very low in hand-picked<br />
West African cott<strong>on</strong>) but from n<strong>on</strong>-plant material must be eliminated.<br />
C<strong>on</strong>vincing farmers not to use polypropylene, jute or plastic material in<br />
picking and handling <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> is <str<strong>on</strong>g>the</str<strong>on</strong>g> soluti<strong>on</strong>. Countries should be<br />
encouraged to initiate model projects and implement <str<strong>on</strong>g>the</str<strong>on</strong>g>m <strong>on</strong> a larger scale.<br />
11. Fight Against Subsidies<br />
It is recognized that subsidies have a negative effect <strong>on</strong> internati<strong>on</strong>al cott<strong>on</strong><br />
prices. Low internati<strong>on</strong>al prices affect milli<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> growers in IDB<br />
57
cott<strong>on</strong> producing countries. At <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al level, <str<strong>on</strong>g>the</str<strong>on</strong>g> collective acti<strong>on</strong><br />
initiated by West and Central African countries in Cancun and at o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
internati<strong>on</strong>al forums should be pursued. On August 1, 2004, WTO member<br />
governments agreed that IDB could be <str<strong>on</strong>g>of</str<strong>on</strong>g> help in streng<str<strong>on</strong>g>the</str<strong>on</strong>g>ning <str<strong>on</strong>g>the</str<strong>on</strong>g> support<br />
against subsidies, which is in <str<strong>on</strong>g>the</str<strong>on</strong>g> ultimate interest <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producing<br />
countries.<br />
12. Internati<strong>on</strong>al Cott<strong>on</strong> Research Center<br />
There is no internati<strong>on</strong>al institute/center for research <strong>on</strong> cott<strong>on</strong>. Many<br />
countries share similar producti<strong>on</strong> c<strong>on</strong>diti<strong>on</strong>s and <str<strong>on</strong>g>the</str<strong>on</strong>g>re are many areas <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
research where an internati<strong>on</strong>al center could serve better than isolated and<br />
diluted efforts in IDB member countries. It is str<strong>on</strong>gly recommended that<br />
IDB establish an internati<strong>on</strong>al research institute for cott<strong>on</strong> with a specific<br />
mandate. The institute should undertake research <strong>on</strong> comm<strong>on</strong> issues related to<br />
most IDB countries and serve as an internati<strong>on</strong>al training center for<br />
researchers and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r participants <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry.<br />
13. Nati<strong>on</strong>al Cott<strong>on</strong> C<strong>on</strong>ferences<br />
Nati<strong>on</strong>al cott<strong>on</strong> c<strong>on</strong>ferences are held regularly in many countries like<br />
Australia, Brazil, Colombia and <str<strong>on</strong>g>the</str<strong>on</strong>g> USA. The purpose <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>ferences is<br />
to bring toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r all segments <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry and get feedback for<br />
improving programs in ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r directi<strong>on</strong>, from farmer to research to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
industry and vice versa. No such c<strong>on</strong>ferences are held in IDB member<br />
countries and <str<strong>on</strong>g>the</str<strong>on</strong>g> few meetings held in some <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> countries are not<br />
effective. IDB member countries should be encouraged to organize<br />
annual/biannual c<strong>on</strong>ferences <strong>on</strong> regular basis.<br />
Many IDB member countries have success stories to share with o<str<strong>on</strong>g>the</str<strong>on</strong>g>r members.<br />
The access to cott<strong>on</strong> germplasm needs to be improved.<br />
IDB member countries should have better access to new technologies.<br />
IDB member countries should form a cott<strong>on</strong> network.<br />
The West African countries need a better cott<strong>on</strong> classing and grading system.<br />
Cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> should be reduced and new uses <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> should be found.<br />
Eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> quota systems will change <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> trade in <str<strong>on</strong>g>the</str<strong>on</strong>g> world and IDB<br />
countries should be ready for it.<br />
Efforts against direct support programs (subsidies) should be streng<str<strong>on</strong>g>the</str<strong>on</strong>g>ned.<br />
There is a need to establish an internati<strong>on</strong>al institute <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> research.<br />
58
VIII. CONCLUSIONS AND RECOMMENDATIONS<br />
Member governments <str<strong>on</strong>g>of</str<strong>on</strong>g> IDB share 30% <str<strong>on</strong>g>of</str<strong>on</strong>g> world cott<strong>on</strong> area, 28% <str<strong>on</strong>g>of</str<strong>on</strong>g> world<br />
producti<strong>on</strong> and 38% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> raw cott<strong>on</strong> traded in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. Almost half <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
IDB member countries are involved in cott<strong>on</strong> producti<strong>on</strong> and cott<strong>on</strong> is a<br />
critical crop for many <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>m. In countries like, Benin, Egypt, Mali, Pakistan<br />
and Uzbekistan cott<strong>on</strong> plays a vital role in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir ec<strong>on</strong>omies. Cott<strong>on</strong> is a major<br />
source <str<strong>on</strong>g>of</str<strong>on</strong>g> foreign exchange and <str<strong>on</strong>g>the</str<strong>on</strong>g> success and failure <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> crop has<br />
serious c<strong>on</strong>sequences. Currently, cott<strong>on</strong> is c<strong>on</strong>fr<strong>on</strong>ted with important issues.<br />
Cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> c<strong>on</strong>tinues to rise to unec<strong>on</strong>omical levels, yields are not<br />
increasing, new technologies (like biotechnology) require heavy investment,<br />
and subsidies c<strong>on</strong>tinue to harm IDB member countries. The internati<strong>on</strong>al<br />
cott<strong>on</strong> scenario is going to change with <str<strong>on</strong>g>the</str<strong>on</strong>g> eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> quota systems<br />
starting January 2005. The eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> quota systems is a challenge as well<br />
as an opportunity for IDB member countries.<br />
Many IDB member countries have a great deal <str<strong>on</strong>g>of</str<strong>on</strong>g> informati<strong>on</strong> to share with<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>ir fellow members but, unfortunately, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is no system to bring countries<br />
toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r to share experiences. Benin, Burkina Faso, Chad and Mali raised <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
issue <str<strong>on</strong>g>of</str<strong>on</strong>g> subsidies <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own at <str<strong>on</strong>g>the</str<strong>on</strong>g> General Council and Agriculture<br />
Committee <str<strong>on</strong>g>of</str<strong>on</strong>g> WTO. The issue was discussed at <str<strong>on</strong>g>the</str<strong>on</strong>g> 5 th WTO Ministerial<br />
C<strong>on</strong>ference held in Cancún, Mexico in September 2003, but WTO member<br />
governments failed to make a decisi<strong>on</strong>. More countries joined <str<strong>on</strong>g>the</str<strong>on</strong>g> proposal<br />
and WTO has decided to c<strong>on</strong>sider cott<strong>on</strong> subsidies separately from o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
agriculture issues. IDB decided to hold an expert c<strong>on</strong>sultati<strong>on</strong> to discuss<br />
issues menti<strong>on</strong>ed above and prepare its member governments for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
changing situati<strong>on</strong>. For <str<strong>on</strong>g>the</str<strong>on</strong>g> same purpose, IDB launched three studies, <strong>on</strong>e<br />
each in Africa and Asia, and <str<strong>on</strong>g>the</str<strong>on</strong>g> third a c<strong>on</strong>solidati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> regi<strong>on</strong>al reports. It is<br />
hoped that <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB expert c<strong>on</strong>sultati<strong>on</strong> will help IDB member countries to<br />
improve cott<strong>on</strong> producti<strong>on</strong> efficiency and competitiveness. The three studies<br />
made <str<strong>on</strong>g>the</str<strong>on</strong>g> following recommendati<strong>on</strong>s:<br />
Producti<strong>on</strong><br />
1. Good germplasm is <str<strong>on</strong>g>the</str<strong>on</strong>g> basis for any successful breeding program. In<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> absence <str<strong>on</strong>g>of</str<strong>on</strong>g> an internati<strong>on</strong>al institute for cott<strong>on</strong> research, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is no<br />
formal way to exchange cott<strong>on</strong> germplasm. It is recommended to<br />
establish an internati<strong>on</strong>al cott<strong>on</strong> germplasm center in <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB<br />
member countries.<br />
2. It is recommended that West African countries improve <str<strong>on</strong>g>the</str<strong>on</strong>g> input<br />
supply system in <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong>.<br />
59
Instituti<strong>on</strong>al<br />
3. At present, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is hardly any sharing <str<strong>on</strong>g>of</str<strong>on</strong>g> informati<strong>on</strong> am<strong>on</strong>g IDB<br />
member countries, something that needs to be enhanced. IDB member<br />
countries could greatly benefit if an instituti<strong>on</strong> like IDB could provide a<br />
framework for sharing experiences am<strong>on</strong>g member countries.<br />
4. Cott<strong>on</strong> biotechnology is expensive and dominated by <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector.<br />
In order for IDB member countries to remain competitive in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
internati<strong>on</strong>al cott<strong>on</strong> market, <str<strong>on</strong>g>the</str<strong>on</strong>g>y have to make use <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> new<br />
technology. IDB member governments should develop biosafety<br />
regulati<strong>on</strong>s and, at <str<strong>on</strong>g>the</str<strong>on</strong>g> same time, educate <str<strong>on</strong>g>the</str<strong>on</strong>g> public about <str<strong>on</strong>g>the</str<strong>on</strong>g> new<br />
technologies.<br />
5. It is recommended that IDB member countries establish a network <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
cott<strong>on</strong> researchers and start a cott<strong>on</strong> newsletter, <strong>on</strong>-line or hard copy, to<br />
keep <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB countries c<strong>on</strong>nected to each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r.<br />
6. Ginning is an integral part <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> chain. Close to<br />
1,500 gin factories operate in IDB member countries but <str<strong>on</strong>g>the</str<strong>on</strong>g>re is no<br />
training school <strong>on</strong> ginning o<str<strong>on</strong>g>the</str<strong>on</strong>g>r than a small facility in Uganda.<br />
Training could include pers<strong>on</strong>nel in managerial skills, electricity work<br />
and repair <str<strong>on</strong>g>of</str<strong>on</strong>g> machines.<br />
7. The eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> quotas in 2005 will bring many changes in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
internati<strong>on</strong>al textile industry affecting both IDB cott<strong>on</strong> producing and<br />
c<strong>on</strong>suming countries. IDB member countries should prepare<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>mselves for <str<strong>on</strong>g>the</str<strong>on</strong>g> changing textile trade world by organizing events<br />
related to <str<strong>on</strong>g>the</str<strong>on</strong>g> issue.<br />
8. Benin, Chad, Burkina Faso and Mali raised <str<strong>on</strong>g>the</str<strong>on</strong>g> subsidies issue with <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
WTO <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own. IDB member governments should help to<br />
streng<str<strong>on</strong>g>the</str<strong>on</strong>g>n support against subsidies, which is in <str<strong>on</strong>g>the</str<strong>on</strong>g> ultimate interest <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
cott<strong>on</strong> producing countries.<br />
9. IDB member countries should develop a str<strong>on</strong>g policy toward<br />
intellectual property rights.<br />
10. Countries must develop an effective approach to cooperate with <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
private sector and get it involved in research and development <strong>on</strong><br />
cott<strong>on</strong>.<br />
Financial<br />
11. West African countries are going through a transiti<strong>on</strong>al stage <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
privatizati<strong>on</strong>. It is recommended that a regi<strong>on</strong>al high-class cott<strong>on</strong>classing<br />
lab be established in <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong>.<br />
12. It is recommended that IDB help its member governments by<br />
sp<strong>on</strong>soring small projects related to producti<strong>on</strong> research. The projects<br />
60
could cover o<str<strong>on</strong>g>the</str<strong>on</strong>g>r areas and be approved after thorough evaluati<strong>on</strong>.<br />
ICAC is <str<strong>on</strong>g>the</str<strong>on</strong>g> recognized Internati<strong>on</strong>al Commodity Body <strong>on</strong> cott<strong>on</strong> and<br />
sp<strong>on</strong>sors projects funded by <str<strong>on</strong>g>the</str<strong>on</strong>g> Comm<strong>on</strong> Fund for Commodities (an<br />
intergovernmental organizati<strong>on</strong>). A similar relati<strong>on</strong>ship could be<br />
initiated between ICAC and IDB.<br />
13. There is a str<strong>on</strong>g need for an internati<strong>on</strong>al research center for cott<strong>on</strong>.<br />
The center should undertake research <strong>on</strong> issues <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>cern to member<br />
countries, new technologies (like biotechnology), maintain a high class<br />
fiber quality testing lab and serve as an internati<strong>on</strong>al training center for<br />
IDB countries.<br />
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1<br />
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27<br />
Annexe 1<br />
<strong>Islamic</strong> <strong>Development</strong> Bank Member Countries<br />
Afghanistan<br />
Arab Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Egypt<br />
Azerbaijan Republic<br />
Brunei Darussalam<br />
Burkina Faso<br />
Democratic & Popular Republic <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Algeria<br />
Great Socialist People’s Libyan<br />
Arab Jamahiriyah<br />
Hashemite Kingdom <str<strong>on</strong>g>of</str<strong>on</strong>g> Jordan<br />
<strong>Islamic</strong> Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Iran<br />
<strong>Islamic</strong> Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Mauritania<br />
<strong>Islamic</strong> Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan<br />
Kingdom <str<strong>on</strong>g>of</str<strong>on</strong>g> Bahrain<br />
Kingdom <str<strong>on</strong>g>of</str<strong>on</strong>g> Morocco<br />
Kingdom <str<strong>on</strong>g>of</str<strong>on</strong>g> Saudi Arabia<br />
Kyrgyiz Republic<br />
Malaysia<br />
People’s Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Bangladesh<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Albania<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Benin<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Camero<strong>on</strong><br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Chad<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Côte d’Ivoire<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Djibouti<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Gab<strong>on</strong><br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Guinea<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Guinea Bissau<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Ind<strong>on</strong>esia<br />
62<br />
28<br />
29<br />
30<br />
31<br />
32<br />
33<br />
34<br />
35<br />
36<br />
37<br />
38<br />
39<br />
40<br />
41<br />
42<br />
43<br />
44<br />
45<br />
46<br />
47<br />
48<br />
49<br />
50<br />
51<br />
52<br />
53<br />
54<br />
55<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Iraq<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Kazakhstan<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Leban<strong>on</strong><br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Maldives<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Mali<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Mozambique<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Niger<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Senegal<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Sierra Le<strong>on</strong>e<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Somalia<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Sudan<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Suriname<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Tajikistan<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Gambia<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Togo<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Tunisia<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Turkey<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Turkmenistan<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Uganda<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Uzbekistan<br />
Republic <str<strong>on</strong>g>of</str<strong>on</strong>g> Yemen<br />
State <str<strong>on</strong>g>of</str<strong>on</strong>g> Kuwait<br />
State <str<strong>on</strong>g>of</str<strong>on</strong>g> Palestine<br />
State <str<strong>on</strong>g>of</str<strong>on</strong>g> Qatar<br />
Sultanate <str<strong>on</strong>g>of</str<strong>on</strong>g> Oman<br />
Syrian Arab Republic<br />
Uni<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Comoros<br />
United Arab Emirates
Table 4. Supply and Use <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> in IDB Member Countries, 2003/04<br />
Area Yield Prod Beg Stk imports C<strong>on</strong>s Exports End Stks S/U *<br />
Country 000 ha Kgs/Ha 000 Metric T<strong>on</strong>s Ratio<br />
ALGERIA 5 20 20 5 0,.27<br />
EGYPT 226 883 200 106 75 195 125 61 0.19<br />
MOROCCO 2 513 1 10 43 44 10 0.24<br />
SUDAN 179 435 78 74 5 101 47 0.45<br />
TUNISIA 6 15 15 6 0.37<br />
Sub total 408 684 279 201 153 279 226 129 0.26<br />
BENIN 323 421 136 45 5 128 48 0.36<br />
BURKINA FASO 415 506 210 79 4 201 84 0.41<br />
CAMEROON 208 480 100 58 3 106 50 0.46<br />
CHAD 252 190 48 38 1 67 18 0.27<br />
COTE D’IVOIRE 200 425 85 144 5 182 43 0.23<br />
GUINEA 24 329 8 4 9 3 0.36<br />
MALI 549 480 264 155 4 296 119 0.40<br />
NIGER 3 431 1 0 1 0.14<br />
SENEGAL 45 489 22 7 1 21 7 0.34<br />
TOGO 189 349 66 34 77 23 0.30<br />
Sub total 2,208 426 940 564 23 1,086 395 0.36<br />
MOZAMBIQUE 230 114 26 15 2 24 16 0.61<br />
UGANDA 225 129 29 4 1 18 14 0.75<br />
Sub total 455 121 55 19 3 42 30 0.67<br />
AZERBAIJAN 61 639 39 12 3 36 12 0.32<br />
KAZAKHSTAN 185 676 125 11 2 8 119 11 0.08<br />
KYRGYZSTAN 35 725 25 8 3 3 25 8 0.28<br />
MOLDOVA 2 3 3 2 0.77<br />
TAJIKISTAN 285 604 172 51 20 152 51 0.30<br />
TURKMENISTAN 525 381 200 73 77 124 73 0.36<br />
UZBEKISTAN 1,394 657 915 210 1 250 666 210 0.23<br />
Sub total 2,484 594 1,476 367 9 363 1,122 367 0.25<br />
INDONESIA 10 534 5 61 470 475 61 0.13<br />
MALAYSIA 13 45 45 13 0.29<br />
Sub total 10 534 5 74 515 520 74 0.14<br />
AFGANISTAN 20 367 7 5 4 4 5 0.61<br />
BANGLADESH 50 300 15 73 305 320 0 73 0.23<br />
PAKISTAN 3,037 571 1,734 642 400 2,100 40 636 0.30<br />
Sub total 3,107 565 1,756 720 705 2,424 44 714 0.30<br />
iRAN 145 745 108 33 20 110 51 0.46<br />
IRAQ 20 350 7 1 5 12 1 0.10<br />
SYRIA 203 1,364 277 115 135 186 71 0.22<br />
TURKEY 700 1,286 900 537 450 1,300 70 517 0.38<br />
Sub total 1,068 1,210 1,292 686 475 1,557 256 640 0.35<br />
TOTAL 9,740 596 5,804 2,631 1,856 5,169 2,775 2,348 0.30<br />
% OF WORLD 30 94 28 31 26 24 38 30<br />
WORLD TOTAL 32,135 635 20,420 8,586 7,231 21,100 7,231 7,906 0.37<br />
*/ Ending stocks divided by c<strong>on</strong>sumpti<strong>on</strong> plus exports.<br />
World total includes countries not shown.<br />
Source : Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee (2003c).<br />
63
Table 5. Supply and Use <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> in N<strong>on</strong>-IDB Member Countries, 2003/04<br />
Area Yield Prod Beg Stks Imports C<strong>on</strong>s Exports End Stks S/U *<br />
Country 000 ha Kgs/Ha 000 Metric T<strong>on</strong>s Ratio<br />
CANADA 9 70 68 11 0.16<br />
CUBA 4 269 1 5 9 10 5 0.50<br />
DOM. REP. 2 2 0.33<br />
MEXICO 58 1,188 68 229 361 410 20 229 0.53<br />
USA 4,858 818 3,975 1,172 11 1,350 3.000 808 0.19<br />
Sub total 4,919 822 4,044 1,416 453 1,840 3,020 1,054 0.22<br />
EL SALVADOR 5 22 22 5 0.24<br />
GUATEMALA 5 22 22 5 0.23<br />
HONDURAS 1 4 4 1 0.19<br />
NICARAGUA 2 538 1 1 0.18<br />
Sub total 2 538 1 11 47 48 11 0.23<br />
ARGENTINA 253 398 101 57 55 115 15 83 0.64<br />
BOLIVIA 5 462 2 3 4 4 2 3 0.40<br />
BRAZIL 1.030 1,262 1,300 551 105 800 240 916 0.88<br />
CHILE 11 26 26 11 0.43<br />
COLOMBIA 55 810 44 21 66 105 27 0.25<br />
ECUADOR 4 436 2 2 13 14 2 0.13<br />
PARAGUAY 270 389 105 22 0 6 65 56 0.79<br />
PERU 63 698 44 40 33 75 2 40 0.52<br />
URUGUAY 1 4 4 1 0.15<br />
VENEZUELA 17 340 6 23 3 15 2 14 0.81<br />
Sub total 1,696 945 1,604 730 308 1,164 326 1,151 0.77<br />
CENT.AFR. REP. 12 167 2 8 10<br />
MADAGASCAR 20 405 8 5 4 4 5 0.61<br />
Sub total 32 313 10 13 4 4 15<br />
ANGOLA 2 285 1 1 0.14<br />
ETHIOPIA 113 177 20 13 13 7 12 0.62<br />
GHANA 20 250 5 3 2 7 3 0.46<br />
KENYA 50 97 5 8 17 22 8 0.35<br />
NIGERIA 400 250 100 31 9 65 25 50 0.56<br />
SOUTH AFRICA 38 663 25 27 35 60 0 27 0.48<br />
TANZANIA 375 231 87 22 0 16 53 40 0.58<br />
CONGO. DR 11 265 3 2 6 8 2 0.26<br />
ZAMBIA 176 228 40 19 0 14 28 17 0.40<br />
ZIMBABWE 330 321 105 75 0 27 102 51 0.39<br />
Sub total 1,515 257 390 200 69 233 215 211 0.47<br />
BULGARIA 9 254 2 9 18 19 1 9 0.44<br />
CZECH REP. 27 48 48 1 26 0.54<br />
SLOVAK REP. 4 11 11 4 0.32<br />
HUNGARY 4 11 11 4 0.36<br />
POLAND 10 50 51 10 0.19<br />
ROMANIA 6 17 17 6 0.34<br />
FR. YUGOSLAVIA 6 14 14 6 0.43<br />
Sub total 9 254 2 66 170 171 2 64 0.37<br />
NORWAY 1 1 0.32<br />
SWITZERLAND 2 19 18 1 2 0.13<br />
Sub total 2 20 19 1 3 0.15<br />
64
Table 5. Supply and Use <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> in N<strong>on</strong>-IDB Member Countries, 2003/04(C<strong>on</strong>t’d)<br />
Area Yield Prod Beg Stks Imports C<strong>on</strong>s Exports End Stks S/U *<br />
Country 000 ha Kgs/Ha 000 Metric T<strong>on</strong>s Ratio<br />
AUSTRIA 6 26 26 6 0.24<br />
BELGIUM 17 35 28 13 11 0.27<br />
DENMARK<br />
FRANCE 8 72 65 7 8 0.12<br />
GERMANY 12 90 80 12 10 0.11<br />
GREECE 368 871 320 130 5 124 223 108 0.31<br />
IRELAND 1 1 0.23<br />
ITALY 32 225 225 32 0.14<br />
NETHERLANDS 1 3 0 3 1 0.38<br />
PORTUGAL 18 85 85 19 0.22<br />
SPAIN 92 1,033 95 23 10 70 35 23 0.22<br />
SWEDEN 1 6 6 1 0.15<br />
UNETED KING. 1 1 0.20<br />
Sub total 460 902 415 249 559 710 293 220 0.22<br />
ARMENIA 1 260 1 1<br />
BELARUS 4 12 12 4 0.31<br />
ESTONIA 7 25 25 7 0.29<br />
GEORGIA 0 0<br />
LATVIA 15 11 4 7 15 1.42<br />
LITHUANIA 7 17 12 5 7 0.44<br />
MOLDOVA 2 3 3 2 0.77<br />
RUSSIA 2 501 1 41 310 300 51 0.17<br />
UKRAINE 4 16 11 5 4 0.29<br />
Sub total 3 667 2 81 392 366 17 92 0.24<br />
CHINA (Mainland) 5,110 953 4,870 1,566 1,850 7,000 37 1,249 0.18<br />
CHINA (Taiwan) 103 201 234 71 0.30<br />
CHINA (H<strong>on</strong>g K<strong>on</strong>g) 40 45 65 3 17 0.24<br />
Sub total 5,110 953 4,870 1,709 2,96 7,299 40 1,336 0.18<br />
AUSTRALIA 185 1,656 306 295 20 360 222 0.58<br />
JAPAN 63 168 181 50 0.27<br />
KOREA D.R. 19 534 10 6 5 15 6 0.41<br />
KOREA REP. 59 290 300 49 0.16<br />
PHILIPPINES 2 448 1 10 34 35 10 0.28<br />
SINGAPORE 1 3 3 1 0.24<br />
THAILAND 33 400 13 159 380 400 3 149 0.37<br />
VIETNAM 25 371 9 23 101 110 23 0.21<br />
Sub total 264 1,288 340 615 981 1,061 366 509 0.36<br />
INDIA 8,000 354 2,831 783 200 2,873 116 825 0.28<br />
MYANMAR 270 206 56 34 44 11 34 0.61<br />
SRI LANKA 8 28 28 8 0.27<br />
Sub total 8,270 349 2,886 824 228 2,945 127 866 0.28<br />
ISRAEL 10 1,730 17 11 1 1 22 7 0.29<br />
Sub total 10 1,730 17 11 1 1 22 7 0.29<br />
TOTAL 22,28<br />
9<br />
654 14,58<br />
2<br />
*/ Ending stocks divided by c<strong>on</strong>sumpti<strong>on</strong> plus exports.<br />
World total includes countries not shown.<br />
Source : Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee (2003c).<br />
5,927 5,324 15,862 4,434 5,538 0.27<br />
% <str<strong>on</strong>g>of</str<strong>on</strong>g> world 69 103 71 69 74 75 61 70<br />
WORLD TOTAL 32,13<br />
5<br />
635 20,42<br />
0<br />
8,586 7,231 21,100 7,231 7,906 0.37<br />
65
Table 6. Supply and Use <str<strong>on</strong>g>of</str<strong>on</strong>g> Extra-Fine Cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> World<br />
Area Yield Prod Beg Stks Imports C<strong>on</strong>s Exports End Stks<br />
Country 000 ha Kgs/Ha 000 Metric T<strong>on</strong>s<br />
AUSTRALIA 1 1,667 1 2 1 2<br />
CHINA<br />
(Mainland)<br />
50 1,400 70 12 25 53 37 17<br />
EGYPT 226 872 197 91 123 120 45<br />
INDIA 80 22 50 130 22<br />
ISRAEL 4 1,900 8 8 13 3<br />
PERU 9 402 4 7 4 10 4<br />
SUDAN 107 374 40 44 70 14<br />
TAJIKISTAN 32 603 19 12 3 20 8<br />
TURKMENISTAN 100 300 30 8 1 24 13<br />
UNITED STATES 72 1,312 94 53 9 14 114 28<br />
UZBEKISTAN 30 534 16 6 4 12 6<br />
OTHERS 10 887 4 11 7 1 10<br />
TOTAL 639 881 562 275 88 345 412 172<br />
*/ Ending stocks divided by c<strong>on</strong>sumpti<strong>on</strong> plus exports.<br />
Source : Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee (2003c).<br />
66
References<br />
Ahmed, Zahoor. May 2004. Enhancing Producti<strong>on</strong> Efficiency and Internati<strong>on</strong>al<br />
Competitiveness in IDB cott<strong>on</strong> Producing Member Countries from <str<strong>on</strong>g>the</str<strong>on</strong>g> Asian Regi<strong>on</strong>,<br />
A report executed by <str<strong>on</strong>g>the</str<strong>on</strong>g> Ec<strong>on</strong>omic Policy and Strategic Planning Department,<br />
<strong>Islamic</strong> <strong>Development</strong> Bank, P. Box. 5925 Jeddah 21432 Kingdom <str<strong>on</strong>g>of</str<strong>on</strong>g> Saudi Arabia.<br />
Chaudhry, M. Rafiq. 2001. Survey <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Cost <str<strong>on</strong>g>of</str<strong>on</strong>g> Producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Raw Cott<strong>on</strong>.<br />
Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee, 1629 K Street, Suite 702, Washingt<strong>on</strong> DC<br />
20006, USA. September 2001.<br />
Chaudhry, M. Rafiq. 2004. Update <str<strong>on</strong>g>of</str<strong>on</strong>g> genetically engineered cott<strong>on</strong>, THE ICAC<br />
RECORDER. Vol. XXII, No. 2., June 2004.<br />
CUTS. 2003. Ec<strong>on</strong>omiquity. Cancun Collapse: Opportunities and Threats, published<br />
by CUTS Centre for Internati<strong>on</strong>al Trade, Ec<strong>on</strong>omics & Envir<strong>on</strong>ment, D-217, Bhaskar<br />
Marg, Bani Park, Jaipur 302016, India.<br />
Estur, Gérald. 2004. COTTON: Review <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> World Situati<strong>on</strong>. Internati<strong>on</strong>al Cott<strong>on</strong><br />
Advisory Committee, 1629 K Street, Suite 702, Washingt<strong>on</strong> DC 20006, USA. Volime<br />
57, Number 5, June 2004.<br />
Guitchounts, Andrei. 2004. World Cott<strong>on</strong> Demand and <str<strong>on</strong>g>the</str<strong>on</strong>g> Outlook for <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong><br />
Textile Industry. A paper presented at <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>ference “The Egyptian Cott<strong>on</strong> Industry –<br />
Growth Through Private Sector Investment” held in Cairo, Egypt <strong>on</strong> May 15, 2004.<br />
Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee (ICAC). 1999. The World Cott<strong>on</strong> Market:<br />
Projecti<strong>on</strong>s to 2005. Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee and Food and<br />
Agriculture Organizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> United Nati<strong>on</strong>s, September 1999.<br />
Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee (ICAC). 2002. Reports <strong>on</strong> Injury Due to Low<br />
Cott<strong>on</strong> Prices. Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee,1629 K Street, Suite 702,<br />
Washingt<strong>on</strong> DC 20006, USA, 2002.<br />
Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee (ICAC). 2003a. World Textile Demand.<br />
Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee, 1629 K Street, Suite 702, Washingt<strong>on</strong> DC<br />
20006, USA. September 2003.<br />
Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee (ICAC). 2003b. Producti<strong>on</strong> and Trade<br />
Policies Affecting <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Industry, Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee, 1629<br />
K Street, Suite 702, Washingt<strong>on</strong> DC 20006, USA. September 2003.<br />
Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee (ICAC). 2003c. WORLD COTTON<br />
STATISTICS, Bulletin <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee. 1629 K Street,<br />
Suite 702, Washingt<strong>on</strong> DC 20006, USA. September 2003.<br />
Townsend, Terry. 2003. Subsidies Bey<strong>on</strong>d 2006. Presented to <str<strong>on</strong>g>the</str<strong>on</strong>g> Liverpool Cott<strong>on</strong><br />
Associati<strong>on</strong>, October 2, 2003, Liverpool, UK.<br />
67
Townsend, Terry. 2004. Cott<strong>on</strong>: An Engine <str<strong>on</strong>g>of</str<strong>on</strong>g> Ec<strong>on</strong>omic Growth, A statement from <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee as a part <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> panel discussi<strong>on</strong> during a<br />
joint event by <str<strong>on</strong>g>the</str<strong>on</strong>g> Comm<strong>on</strong> Fund for Commodities and UNCTAD during UNCTAD XI<br />
C<strong>on</strong>ference <strong>on</strong> Commodities, Poverty Alleviati<strong>on</strong> and Sustainable <strong>Development</strong>, held<br />
at Sao Paulo, Brazil, June 15, 2004.<br />
Valderrama Becerra, Carlos Alberto. 2000. World Cott<strong>on</strong> Demand in <str<strong>on</strong>g>the</str<strong>on</strong>g> Future:<br />
Issues <strong>on</strong> Competitiveness. <str<strong>on</strong>g>Proceedings</str<strong>on</strong>g> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> 25 th Internati<strong>on</strong>al Cott<strong>on</strong> C<strong>on</strong>ference,<br />
Bremen Cott<strong>on</strong> Exchange, Bremen, Germany.<br />
Valderrama Becerra, Carlos Alberto. 2004. Producti<strong>on</strong> and Trade Policies Affecting<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Industry, A report presented to <str<strong>on</strong>g>the</str<strong>on</strong>g> 473 rd <str<strong>on</strong>g>Meeting</str<strong>on</strong>g> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Standing<br />
Committee <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee. May 18, 2004,<br />
Washingt<strong>on</strong> DC, USA.<br />
Yattara, Amadou Aly. May 2004. Cott<strong>on</strong> Producti<strong>on</strong> in Mali – Enhancing Producti<strong>on</strong><br />
Efficiency and Internati<strong>on</strong>al Competitiveness in IDB Cott<strong>on</strong>-producing Countries in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
African Regi<strong>on</strong>. A report executed by <str<strong>on</strong>g>the</str<strong>on</strong>g> Ec<strong>on</strong>omic Policy and Strategic Planning<br />
Department, <strong>Islamic</strong> <strong>Development</strong> Bank, P. Box. 5925 Jeddah 21432 Kingdom <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Saudi Arabia.<br />
68
Overview<br />
Appendix 1<br />
69<br />
(Original in French)<br />
CASE STUDY ON COTTON PRODUCTION IN MALI<br />
Amadou Aly Yattara<br />
Mali is a landlocked country in West Africa. Its land area is 1.24 milli<strong>on</strong> km2<br />
51% <str<strong>on</strong>g>of</str<strong>on</strong>g> which is desert. Its populati<strong>on</strong> was estimated at 9.8 milli<strong>on</strong><br />
inhabitants in 1998 and more that 80% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>m live in <str<strong>on</strong>g>the</str<strong>on</strong>g> rural area. The<br />
populati<strong>on</strong> is very young, approximately 50% are under <str<strong>on</strong>g>the</str<strong>on</strong>g> age <str<strong>on</strong>g>of</str<strong>on</strong>g> 15.<br />
Women c<strong>on</strong>stitute 51% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> populati<strong>on</strong>.<br />
Mali is rated <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> least developed countries in <str<strong>on</strong>g>the</str<strong>on</strong>g> world by <str<strong>on</strong>g>the</str<strong>on</strong>g> UNDP's<br />
development indicator. The majority <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> populati<strong>on</strong> (69% in 1998) are<br />
poor. The ec<strong>on</strong>omy depends heavily <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> rural area, which provides 45% <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> GDP (1994-48), involves 80% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> active populati<strong>on</strong> and provides 80%<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> export earnings, which come mainly from cott<strong>on</strong> and livestock. Cott<strong>on</strong> is<br />
also <str<strong>on</strong>g>the</str<strong>on</strong>g> main source <str<strong>on</strong>g>of</str<strong>on</strong>g> income in <str<strong>on</strong>g>the</str<strong>on</strong>g> rural area. It increased regularly,<br />
between 1995/96 and 1997/98, from 72 billi<strong>on</strong> to 81 billi<strong>on</strong>. The country’s<br />
cott<strong>on</strong> producti<strong>on</strong> has increased c<strong>on</strong>siderably in recent years. However, it<br />
came as a result <str<strong>on</strong>g>of</str<strong>on</strong>g> an increase in <str<strong>on</strong>g>the</str<strong>on</strong>g> number <str<strong>on</strong>g>of</str<strong>on</strong>g> producers and <str<strong>on</strong>g>the</str<strong>on</strong>g> size <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
land area for cott<strong>on</strong> producti<strong>on</strong>. At <str<strong>on</strong>g>the</str<strong>on</strong>g> same time, earnings from cott<strong>on</strong> have<br />
stagnated.<br />
The impact <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> cultivati<strong>on</strong> <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> entire Malian ec<strong>on</strong>omy and its<br />
stakeholders was felt after cultivati<strong>on</strong> was boycotted in May/June 2000. The<br />
grain and fibre <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> dropped by more than 50% during <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
2000/01 trade seas<strong>on</strong> compared to that <str<strong>on</strong>g>of</str<strong>on</strong>g> 1999/2000. The decline in<br />
producti<strong>on</strong> compounded <str<strong>on</strong>g>the</str<strong>on</strong>g> financial difficulties <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Malian Textile<br />
<strong>Development</strong> Company (CMDT), and <str<strong>on</strong>g>the</str<strong>on</strong>g>ir cott<strong>on</strong> industry and <str<strong>on</strong>g>the</str<strong>on</strong>g> Malian<br />
ec<strong>on</strong>omy. C<strong>on</strong>sequently, producers income also diminished.<br />
The decline in <str<strong>on</strong>g>the</str<strong>on</strong>g> world market price <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>, because <str<strong>on</strong>g>of</str<strong>on</strong>g> a drop in world<br />
c<strong>on</strong>sumpti<strong>on</strong> and over-producti<strong>on</strong> due to subsidies granted by rich countries<br />
(United States and <str<strong>on</strong>g>the</str<strong>on</strong>g> E.U.) to cott<strong>on</strong> producers, also had adverse effects <strong>on</strong><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> situati<strong>on</strong>. In view <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> impending collapse <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry, which<br />
is <str<strong>on</strong>g>the</str<strong>on</strong>g> mainstay <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Malian ec<strong>on</strong>omy, <str<strong>on</strong>g>the</str<strong>on</strong>g> government began to readjust and
estructure <str<strong>on</strong>g>the</str<strong>on</strong>g> industry. After <str<strong>on</strong>g>the</str<strong>on</strong>g> forum <strong>on</strong> cott<strong>on</strong> in April 2001, before an<br />
audience composed <str<strong>on</strong>g>of</str<strong>on</strong>g> all <str<strong>on</strong>g>the</str<strong>on</strong>g> stakeholders <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry and many<br />
producers, <str<strong>on</strong>g>the</str<strong>on</strong>g> government acted. The measures are outlined in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong><br />
policy paper (LPDSC). The paper outlines guidelines to reform <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong><br />
industry in line with <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omic liberalizati<strong>on</strong> policy, which requires that<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> government stay away from all productive, industrial and commercial<br />
activities in <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector and local communities. The objectives <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
reform are:<br />
• c<strong>on</strong>trol producti<strong>on</strong> costs<br />
• increase farm yield<br />
• revive farmers’ associati<strong>on</strong>s<br />
• ensure greater participati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector, producers and local<br />
communities<br />
• increase <str<strong>on</strong>g>the</str<strong>on</strong>g> industry’s c<strong>on</strong>tributi<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy<br />
• help in <str<strong>on</strong>g>the</str<strong>on</strong>g> fight against poverty<br />
• fix prices that are determined by <str<strong>on</strong>g>the</str<strong>on</strong>g> agents c<strong>on</strong>cerned.<br />
The strategies outlined in <str<strong>on</strong>g>the</str<strong>on</strong>g> paper are:<br />
• relink <str<strong>on</strong>g>the</str<strong>on</strong>g> Malian Textile <strong>Development</strong> Company (CMDT) to activities<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry<br />
• ensure greater participati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> producers in <str<strong>on</strong>g>the</str<strong>on</strong>g> management <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
cott<strong>on</strong> industry<br />
• liberalizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> and vegetable oil industry<br />
The aim <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> measures is to ensure <str<strong>on</strong>g>the</str<strong>on</strong>g> sustainability <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
mainstay <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al ec<strong>on</strong>omy, improve <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> yarn so that<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> technical factors <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> can be more competitive, and introduce<br />
instituti<strong>on</strong>al reforms pending <str<strong>on</strong>g>the</str<strong>on</strong>g> outcome <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> acti<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> West and Central<br />
African countries at <str<strong>on</strong>g>the</str<strong>on</strong>g> World Trade Organisati<strong>on</strong> (WTO). The acti<strong>on</strong>s are<br />
designed to get <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO to remove <str<strong>on</strong>g>the</str<strong>on</strong>g> subsidies that <str<strong>on</strong>g>the</str<strong>on</strong>g> US and <str<strong>on</strong>g>the</str<strong>on</strong>g> EU grant<br />
to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir producers, or pay compensati<strong>on</strong> for <str<strong>on</strong>g>the</str<strong>on</strong>g> loss incurred by <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omies<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> countries c<strong>on</strong>cerned. The acti<strong>on</strong>s that must be taken are as follows:<br />
• maintain and even increase producti<strong>on</strong><br />
• c<strong>on</strong>tinue to devise techniques that can help sustain producti<strong>on</strong> under<br />
viable ec<strong>on</strong>omic c<strong>on</strong>diti<strong>on</strong>s, which requires that researcher be allocated<br />
more resources<br />
• ensure permanent c<strong>on</strong>sultati<strong>on</strong> between all <str<strong>on</strong>g>the</str<strong>on</strong>g> stakeholders <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
industry so that <str<strong>on</strong>g>the</str<strong>on</strong>g>y can share informati<strong>on</strong> and rec<strong>on</strong>cile <str<strong>on</strong>g>the</str<strong>on</strong>g>ir <str<strong>on</strong>g>of</str<strong>on</strong>g>ten<br />
c<strong>on</strong>flicting interests<br />
70
• reverse <str<strong>on</strong>g>the</str<strong>on</strong>g> decline in farm yield in several countries and reduce <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
productivity gap in <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong>, which requires greater incentives for<br />
investments in advanced technologies and efficient systems <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
distributing inputs<br />
• make cott<strong>on</strong> ginning more efficient by involving new actors in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
industry for better results, because <str<strong>on</strong>g>the</str<strong>on</strong>g> aim here is to reduce <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
producti<strong>on</strong> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> yarn<br />
• process locally most nati<strong>on</strong>al produce by developing <str<strong>on</strong>g>the</str<strong>on</strong>g> textile industry<br />
and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r sectors<br />
• focus <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> essential activities <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry<br />
• build <str<strong>on</strong>g>the</str<strong>on</strong>g> capacity <str<strong>on</strong>g>of</str<strong>on</strong>g> stakeholders, especially producers who should fully<br />
participate in producti<strong>on</strong><br />
• c<strong>on</strong>tinue to transfer skills as part <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>going restructuring and<br />
privatizati<strong>on</strong> exercises in <str<strong>on</strong>g>the</str<strong>on</strong>g> various countries.<br />
All this should be d<strong>on</strong>e without adversely affecting producti<strong>on</strong> and impeding<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> instituti<strong>on</strong>al development <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry.<br />
I. INTRODUCTION / GENERAL INFORMATION<br />
Mali is a landlocked country that is situated between <str<strong>on</strong>g>the</str<strong>on</strong>g> eleventh and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
twenty-fifth parallel north. Its land area is 1.24 milli<strong>on</strong> km2, 51% <str<strong>on</strong>g>of</str<strong>on</strong>g> which is<br />
a desert. In 1998, <str<strong>on</strong>g>the</str<strong>on</strong>g> populati<strong>on</strong> was estimated at 9.8 milli<strong>on</strong> inhabitants with<br />
80% in <str<strong>on</strong>g>the</str<strong>on</strong>g> rural area. Approximately, 50% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> populati<strong>on</strong> is below <str<strong>on</strong>g>the</str<strong>on</strong>g> age<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> 15. Women c<strong>on</strong>stitute 51% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> populati<strong>on</strong>.<br />
Mali is classified am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> least developed countries <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
UNDP development indicator. The bulk <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> populati<strong>on</strong> (69% in 1998) are<br />
poor. The proporti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> poor is higher in <str<strong>on</strong>g>the</str<strong>on</strong>g> rural area (76%) than in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
urban area. The poverty index in <str<strong>on</strong>g>the</str<strong>on</strong>g> provinces shows that, apart from <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
District <str<strong>on</strong>g>of</str<strong>on</strong>g> Bamako, more than half <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> populati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> each province suffer<br />
from poverty (life expectancy, living c<strong>on</strong>diti<strong>on</strong>s, educati<strong>on</strong>). Cott<strong>on</strong><br />
producti<strong>on</strong> has increased sharply over <str<strong>on</strong>g>the</str<strong>on</strong>g> past five years. However, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
increase was mainly due to an increase in <str<strong>on</strong>g>the</str<strong>on</strong>g> number <str<strong>on</strong>g>of</str<strong>on</strong>g> producers and land<br />
for cott<strong>on</strong> farming. At <str<strong>on</strong>g>the</str<strong>on</strong>g> same time, <str<strong>on</strong>g>the</str<strong>on</strong>g> yield <str<strong>on</strong>g>of</str<strong>on</strong>g> a cott<strong>on</strong> seed has stagnated<br />
at nearly <strong>on</strong>e t<strong>on</strong> a hectare, while that <str<strong>on</strong>g>of</str<strong>on</strong>g> corn has increased to two t<strong>on</strong>s a<br />
hectare. Millet and sorghum yields have not increased much (900-950kg/ha).<br />
The stagnati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> and even decline in cott<strong>on</strong> and grain yield (millet and<br />
sorghum) are a matter <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>cern in all cott<strong>on</strong> producti<strong>on</strong> areas, especially in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> old cott<strong>on</strong> basin (Koutiala and Fana), where farming has not been<br />
71
diversified. The system <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> is <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> agro-forestry-livestock type<br />
with <str<strong>on</strong>g>the</str<strong>on</strong>g> predominance <str<strong>on</strong>g>of</str<strong>on</strong>g> rain-fed crops (cott<strong>on</strong> and grains). It centres around<br />
cott<strong>on</strong> producti<strong>on</strong>, which is <str<strong>on</strong>g>the</str<strong>on</strong>g> main cash crop. This type <str<strong>on</strong>g>of</str<strong>on</strong>g> farming is<br />
practiced in <str<strong>on</strong>g>the</str<strong>on</strong>g> entire sou<str<strong>on</strong>g>the</str<strong>on</strong>g>rn and western parts <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> country in rotati<strong>on</strong>:<br />
cott<strong>on</strong>-sorghum-millet or groundnut or cott<strong>on</strong>-grains. The cott<strong>on</strong> farming area<br />
has diverse climatic c<strong>on</strong>diti<strong>on</strong>s.<br />
In fairly humid areas (Koutiala, Skasso) producti<strong>on</strong> is relatively highly<br />
because <str<strong>on</strong>g>of</str<strong>on</strong>g> very good farming skills, quantity <str<strong>on</strong>g>of</str<strong>on</strong>g> equipment and <str<strong>on</strong>g>the</str<strong>on</strong>g> high use<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> inputs. Livestock breeding is less productive because <str<strong>on</strong>g>of</str<strong>on</strong>g> poor pasture.<br />
Overburden and to much pressure <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> land are serious problems in this<br />
area. In areas such Koutiala and Sikasso, nearly 80% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> land is cultivated<br />
permanently. It is <str<strong>on</strong>g>the</str<strong>on</strong>g>refore practically impossible to extend <str<strong>on</strong>g>the</str<strong>on</strong>g> farmland for<br />
fear <str<strong>on</strong>g>of</str<strong>on</strong>g> farming fragile land. Although cott<strong>on</strong> is cultivated in <str<strong>on</strong>g>the</str<strong>on</strong>g> north (San<br />
and Bla), low rainfall and climatic c<strong>on</strong>diti<strong>on</strong>s do not encourage cott<strong>on</strong><br />
cultivati<strong>on</strong>. Grains (millet and sorghum) are <str<strong>on</strong>g>the</str<strong>on</strong>g> dominant crops. They are<br />
cultivated in rotati<strong>on</strong> with groundnut, which is also a cash crop but barely or<br />
not at all m<strong>on</strong>itored by extensi<strong>on</strong> workers. The yields <str<strong>on</strong>g>of</str<strong>on</strong>g> crops because inputs<br />
and agricultural implements are scarcely used. The breeding <str<strong>on</strong>g>of</str<strong>on</strong>g> small<br />
ruminants is widespread. The land area is not enough and has deteriorated<br />
c<strong>on</strong>siderably. O<str<strong>on</strong>g>the</str<strong>on</strong>g>r areas such Bougouni and Kita, where cott<strong>on</strong> cultivati<strong>on</strong><br />
was recently introduced, have potential for crop cultivati<strong>on</strong> as far as <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
favourable climate and land extensi<strong>on</strong> are c<strong>on</strong>cerned, while <str<strong>on</strong>g>the</str<strong>on</strong>g>re is pressure<br />
<strong>on</strong> land elsewhere. In this area, <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> system is d<strong>on</strong>e in rotati<strong>on</strong><br />
(cott<strong>on</strong>-corn-groundnut or black-eyed bean) or (cott<strong>on</strong>-corn-sorghumgroundnut<br />
or black-eyed bean).<br />
72
II. THE IMPORTANCE OF COTTON PRODUCTION FOR MALI<br />
AND THE NEED TO MAINTAIN IT<br />
Until recently, cott<strong>on</strong> has been <str<strong>on</strong>g>the</str<strong>on</strong>g> main export <str<strong>on</strong>g>of</str<strong>on</strong>g> Mali. In 1995/96, cott<strong>on</strong><br />
accounted for 80% <str<strong>on</strong>g>of</str<strong>on</strong>g> tax revenue. It is also <str<strong>on</strong>g>the</str<strong>on</strong>g> major source <str<strong>on</strong>g>of</str<strong>on</strong>g> income in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
rural area. It increased systematically from 62 to 81 billi<strong>on</strong> between 1995/96<br />
and 1997/98. The importance <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> cultivati<strong>on</strong> for <str<strong>on</strong>g>the</str<strong>on</strong>g> entire Malian and<br />
for <str<strong>on</strong>g>the</str<strong>on</strong>g> stakeholders became apparent after <str<strong>on</strong>g>the</str<strong>on</strong>g> May/June 2000 cott<strong>on</strong><br />
cultivati<strong>on</strong> boycott. It led to a sharp drop in cott<strong>on</strong> grain and yarn producti<strong>on</strong><br />
by 50% in 2000/01 compared to 1999/2000 as shown in Table 1.<br />
Table 1. Trend in <str<strong>on</strong>g>the</str<strong>on</strong>g> Producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Seed 98/99-2000/01<br />
98/99 99/00 00/01<br />
CMDT OHVN Total CMDT OHVN Total CMDT OHVN Total<br />
Area (ha) 468,5 35,85 504,43 442,49 39,80 482,30 211,72 16,18 227,91<br />
Output T/ha 1032 1085 1065<br />
Cott<strong>on</strong> Producti<strong>on</strong> 483,68 34,68 518,36 429,98 29,13 459,12 229,64 13,08 242,73<br />
(T)<br />
(-1.4%)<br />
(-47.8%)<br />
Source: CMDT/OHVN<br />
The decline in producti<strong>on</strong> compounded <str<strong>on</strong>g>the</str<strong>on</strong>g> financial problems <str<strong>on</strong>g>of</str<strong>on</strong>g> CMDT and<br />
affected <str<strong>on</strong>g>the</str<strong>on</strong>g> entire cott<strong>on</strong> industry and <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy <str<strong>on</strong>g>of</str<strong>on</strong>g> Mali (Table 2).The fall<br />
in world prices because <str<strong>on</strong>g>of</str<strong>on</strong>g> less demand also made matters worse. The fall <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
in world prices had a major impact <strong>on</strong> African countries in <str<strong>on</strong>g>the</str<strong>on</strong>g> franc m<strong>on</strong>etary<br />
z<strong>on</strong>e that produce cott<strong>on</strong>. These countries were affected by producti<strong>on</strong> costs<br />
because <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> high cost <str<strong>on</strong>g>of</str<strong>on</strong>g> transportati<strong>on</strong>. The field price <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> commodity<br />
represents 2/3 <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> factory price. The sale price <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> yarn became well<br />
below its producti<strong>on</strong> cost.<br />
Table 2. Trend in <str<strong>on</strong>g>the</str<strong>on</strong>g> Current Balance <str<strong>on</strong>g>of</str<strong>on</strong>g> Payments 1998-2000<br />
(in Fcfa milli<strong>on</strong>)<br />
Item /Year 1998 1999 2000<br />
Imports (FOB) 3329,337 372,821 421,539<br />
Exports (FOB) 328,131 351,573 388,130<br />
Covered. Import/Export % 99.6 94.3 92.1<br />
Trade Balance -1,206 -21,248 -33,409<br />
Net Services -159,235 -161,313 -167,906<br />
Net Pr<str<strong>on</strong>g>of</str<strong>on</strong>g>its -29,968 -43,135 -69,901<br />
Current Net Transfers 67,588 69,941 -90,001<br />
Current Balance -122,821 -155,755 -181,214<br />
Source: MEF/BCEAO, Balance <str<strong>on</strong>g>of</str<strong>on</strong>g> Payments <str<strong>on</strong>g>of</str<strong>on</strong>g> Mali, December 2001<br />
73
Because <str<strong>on</strong>g>of</str<strong>on</strong>g> CMDT’s financial difficulties, it could no l<strong>on</strong>ger maintain <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
ceiling price <str<strong>on</strong>g>of</str<strong>on</strong>g> 185F and <str<strong>on</strong>g>the</str<strong>on</strong>g> discount that <str<strong>on</strong>g>the</str<strong>on</strong>g> Trade Uni<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong><br />
Producers and Food Producers (SYCOV) secured after negotiati<strong>on</strong>s with<br />
various partners in all producti<strong>on</strong> area. C<strong>on</strong>sequently, <str<strong>on</strong>g>the</str<strong>on</strong>g> overall producer<br />
price was fixed at CFA150 a kilogramme. As a result, <str<strong>on</strong>g>the</str<strong>on</strong>g> producers’ sources<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> income diminished (table 3). Their income comes mainly from cott<strong>on</strong> and<br />
grains, which are <str<strong>on</strong>g>the</str<strong>on</strong>g> major crops.<br />
Table 3. Trend in M<strong>on</strong>etary Revenues <str<strong>on</strong>g>of</str<strong>on</strong>g> Producers by CMDT Z<strong>on</strong>e<br />
(in Fcfa. milli<strong>on</strong>)<br />
Income/source Rural Cott<strong>on</strong> Cereals Groundnuts Total<br />
1998/99 64,871,234 11,395,628 6,062,540 82,329,402<br />
1999/00 41,221,452 20,392,655 7,553,070 70,167,087<br />
2000/01 24,647,334 6,654,501 7,247,610 38,384,922<br />
Source: CMDT –DTDR/DPCG, Positi<strong>on</strong> as at November 2000<br />
Overall grain produce also dropped by 13.5% during <str<strong>on</strong>g>the</str<strong>on</strong>g> boycott. Farmers did<br />
not c<strong>on</strong>vert to grain farming <strong>on</strong> cott<strong>on</strong> farmlands as expected. Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r reas<strong>on</strong><br />
is <str<strong>on</strong>g>the</str<strong>on</strong>g> lack <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs, especially for corn.<br />
Table 4. Trend in <str<strong>on</strong>g>the</str<strong>on</strong>g> Producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Cereals (CMDT z<strong>on</strong>e)<br />
Maize Millette/Sorgho Rice<br />
Area Output Product. Area Output Product. Area Output Product.<br />
(ha) (T/ha) (T) (ha) (T/ha) (T) (ha) (T/ha) (T)<br />
1999/99 212,78 1920 408,51 625,58 948 593,30 62,54 1617 101,11<br />
1999/00 239,25 2070 495,24 685,13 1020 698,62 66,98 1724 115,48<br />
2000/01 198,48 1730 343,32 756,43 903 683,39 74,98 1402 105,13<br />
Source: DTDR/CMDT<br />
Because <str<strong>on</strong>g>of</str<strong>on</strong>g> its inability to resort to stabilisati<strong>on</strong> funds provided in such cases<br />
and <str<strong>on</strong>g>the</str<strong>on</strong>g> disc<strong>on</strong>tent <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> rural populati<strong>on</strong>, SYCOV was c<strong>on</strong>demned by its<br />
supporters and a crisis committee was set up. Later a new uni<strong>on</strong> called<br />
SYVAC was established. O<str<strong>on</strong>g>the</str<strong>on</strong>g>r uni<strong>on</strong>s were also established. Since <str<strong>on</strong>g>the</str<strong>on</strong>g>n <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
uni<strong>on</strong>s help to organise certain ec<strong>on</strong>omic functi<strong>on</strong>s such as <str<strong>on</strong>g>the</str<strong>on</strong>g> supply <str<strong>on</strong>g>of</str<strong>on</strong>g> n<strong>on</strong>strategic<br />
inputs (millet and sorghum inputs) but are aware that it is not <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
real role. Subsequent developments led to <str<strong>on</strong>g>the</str<strong>on</strong>g> GSCVM i.e. <str<strong>on</strong>g>Group</str<strong>on</strong>g>ing <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Cott<strong>on</strong> and Foodstuffs Uni<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> Mali. Fur<str<strong>on</strong>g>the</str<strong>on</strong>g>rmore major producer<br />
organisati<strong>on</strong>s are members <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> AOPP i.e. <str<strong>on</strong>g>the</str<strong>on</strong>g> Associati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Farmers’<br />
Pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>al Associati<strong>on</strong>s within which a specialised cott<strong>on</strong> commissi<strong>on</strong> was<br />
set up.<br />
74
The boycott <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> cultivati<strong>on</strong> had a c<strong>on</strong>siderable impact <strong>on</strong> many people<br />
and sectors <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al ec<strong>on</strong>omy, directly and indirectly. As a result <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
financial difficulties, <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT outlines in its bidding procedures for inputs<br />
suppliers a payment deadline <str<strong>on</strong>g>of</str<strong>on</strong>g> at least 180 days which excludes small local<br />
suppliers. Transporters were affected by <str<strong>on</strong>g>the</str<strong>on</strong>g> decline in <str<strong>on</strong>g>the</str<strong>on</strong>g> volume <str<strong>on</strong>g>of</str<strong>on</strong>g> t<strong>on</strong>nage<br />
transported. For local craftsmen, <str<strong>on</strong>g>the</str<strong>on</strong>g> drop in <str<strong>on</strong>g>the</str<strong>on</strong>g> income <str<strong>on</strong>g>of</str<strong>on</strong>g> producers marked<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> end <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir activities.<br />
Credit uni<strong>on</strong>s such as BNDA, CMDT, Kafo Jiginew, which are highly<br />
involved in input distributi<strong>on</strong> and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r agricultural financing needs had to<br />
address issues such as rescheduling credits and <str<strong>on</strong>g>the</str<strong>on</strong>g> decline in repayment<br />
rates. Because <str<strong>on</strong>g>of</str<strong>on</strong>g> all <str<strong>on</strong>g>the</str<strong>on</strong>g>se difficulties and <str<strong>on</strong>g>the</str<strong>on</strong>g> risk that <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry<br />
might collapse, <str<strong>on</strong>g>the</str<strong>on</strong>g> government <str<strong>on</strong>g>of</str<strong>on</strong>g> Mali carried out recovery and restructuring<br />
measures after <str<strong>on</strong>g>the</str<strong>on</strong>g> forums that took place in April 2001. The forums were<br />
well attended by all <str<strong>on</strong>g>the</str<strong>on</strong>g> stakeholders <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry and producers. After <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
proceedings, <str<strong>on</strong>g>the</str<strong>on</strong>g> Malian government prepared a policy paper <strong>on</strong> cott<strong>on</strong><br />
(LPDSC).<br />
The LPDSC spells out <str<strong>on</strong>g>the</str<strong>on</strong>g> guidelines to reform <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry in line<br />
with <str<strong>on</strong>g>the</str<strong>on</strong>g> liberalisati<strong>on</strong> policy <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy i.e. <str<strong>on</strong>g>the</str<strong>on</strong>g> government’s<br />
disengagement from productive, industrial and commercial activities in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
private sector and local communities. The objectives <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> reform are:<br />
• C<strong>on</strong>trol producti<strong>on</strong> costs<br />
• Increase farm output<br />
• Ensure that farmer associati<strong>on</strong>s are dynamic<br />
• Increase <str<strong>on</strong>g>the</str<strong>on</strong>g> involvement <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector, producers and local<br />
communities<br />
• Increase <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry’s c<strong>on</strong>tributi<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al ec<strong>on</strong>omy<br />
• Help fight poverty<br />
• Help ensure that agents negotiate and determine prices for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
industry<br />
The strategies worked out by <str<strong>on</strong>g>the</str<strong>on</strong>g> LPDSC are:<br />
• The CMDT should refocus cott<strong>on</strong> related activities;<br />
• Producers should participate in <str<strong>on</strong>g>the</str<strong>on</strong>g> management <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong><br />
industry;<br />
• The cott<strong>on</strong> and edible oil industry should be liberalized.<br />
75
III. THE VARIOUS STAKEHOLDERS OF THE COTTON<br />
INDUSTRY AND THEIR RESPONSIBILITIES<br />
The various stakeholders <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry at present are as follows:<br />
1. The Producers<br />
The producers bel<strong>on</strong>g to two types <str<strong>on</strong>g>of</str<strong>on</strong>g> groupings:<br />
i. Cott<strong>on</strong> Producer Uni<strong>on</strong>s (SYCOV, SYVAC, SYPAMO AND SPCK)<br />
The four uni<strong>on</strong>s were established to safeguard <str<strong>on</strong>g>the</str<strong>on</strong>g> interests <str<strong>on</strong>g>of</str<strong>on</strong>g> producers. In<br />
fact <str<strong>on</strong>g>the</str<strong>on</strong>g> uni<strong>on</strong>s are directly involved in <str<strong>on</strong>g>the</str<strong>on</strong>g> management <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry. They<br />
help determine <str<strong>on</strong>g>the</str<strong>on</strong>g> level <str<strong>on</strong>g>of</str<strong>on</strong>g> produce to be sold and producer prices, and<br />
m<strong>on</strong>itor viable agricultural land through village technical teams. They also<br />
supply cott<strong>on</strong> factories with cott<strong>on</strong> seeds as so<strong>on</strong> as marketing starts. As for<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> management <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs, <str<strong>on</strong>g>the</str<strong>on</strong>g> uni<strong>on</strong>s also help to prepare input procurement<br />
specificati<strong>on</strong>s, c<strong>on</strong>sider bids and give out procurement c<strong>on</strong>tracts.<br />
ii. Village Associati<strong>on</strong>s<br />
Village associati<strong>on</strong>s that <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT established in 1984 play a major role in<br />
streamlining cott<strong>on</strong> producti<strong>on</strong>. The associati<strong>on</strong>s are assigned to determine<br />
cott<strong>on</strong> inputs (fertilisers and insecticides) that producers need, take loans to<br />
buy inputs, ensure that cott<strong>on</strong> produce is properly weighed and distribute sale<br />
benefits.<br />
2. The CMDT and <str<strong>on</strong>g>the</str<strong>on</strong>g> OHVN<br />
The CMDT and <str<strong>on</strong>g>the</str<strong>on</strong>g> OHVN are <str<strong>on</strong>g>the</str<strong>on</strong>g> development bodies in charge <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong><br />
produce. The CMDT is <str<strong>on</strong>g>the</str<strong>on</strong>g> main enterprise <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry. It aims to<br />
develop cott<strong>on</strong> producti<strong>on</strong> areas, improve <str<strong>on</strong>g>the</str<strong>on</strong>g> farmers’ living standards,<br />
particularly by developing cott<strong>on</strong> cultivati<strong>on</strong>.<br />
The government owns 60% <str<strong>on</strong>g>of</str<strong>on</strong>g> its capital and DAGRIS owns <str<strong>on</strong>g>the</str<strong>on</strong>g> remaining<br />
40%. The CMDT gives advise <strong>on</strong> cott<strong>on</strong> farming techniques, supplies inputs<br />
and agricultural implements, buys, collects and distributes cott<strong>on</strong> seeds and<br />
exports cott<strong>on</strong> yarn. From 1985/1986 to 1999/2000, relati<strong>on</strong>s between <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
CMDT, <str<strong>on</strong>g>the</str<strong>on</strong>g> government and producers were governed by a c<strong>on</strong>tract that<br />
76
outlined <str<strong>on</strong>g>the</str<strong>on</strong>g> role <str<strong>on</strong>g>of</str<strong>on</strong>g> stakeholders and <str<strong>on</strong>g>the</str<strong>on</strong>g> distributi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> resources <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
industry. The c<strong>on</strong>tract dealt with <str<strong>on</strong>g>the</str<strong>on</strong>g> following issues:<br />
• Taxati<strong>on</strong> c<strong>on</strong>cerning <str<strong>on</strong>g>the</str<strong>on</strong>g> industry;<br />
• Ways <str<strong>on</strong>g>of</str<strong>on</strong>g> funding public missi<strong>on</strong>s;<br />
• C<strong>on</strong>diti<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> setting producer prices;<br />
• Debt service;<br />
• Farmers’ compliance with <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT’s producti<strong>on</strong> plans;<br />
• Mode <str<strong>on</strong>g>of</str<strong>on</strong>g> payment for cott<strong>on</strong> seeds;<br />
• Remunerati<strong>on</strong> and stabilisati<strong>on</strong> mechanisms;<br />
• Integrating <str<strong>on</strong>g>the</str<strong>on</strong>g> management <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs into <str<strong>on</strong>g>the</str<strong>on</strong>g> industry.<br />
Before <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry was restructured, it used to perform two closely<br />
related tasks: integrated development <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry and public missi<strong>on</strong>s. The<br />
development missi<strong>on</strong> aimed to enhance activities related to cott<strong>on</strong> produce<br />
systems including extensi<strong>on</strong>, literacy, research, seed producti<strong>on</strong>, upkeep <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
cott<strong>on</strong> assembly points and m<strong>on</strong>itoring/ evaluati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> above activities.<br />
Public missi<strong>on</strong>s c<strong>on</strong>sist in carrying out rural development activities that <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
government assigns to <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT. The plan <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Ministry <str<strong>on</strong>g>of</str<strong>on</strong>g> Rural<br />
<strong>Development</strong> is divided into two categories:<br />
i. Rural development and works<br />
- Building and rehabilitating feeder roads<br />
- Village water supply<br />
- Local development: local policy and programme management<br />
- Water and agricultural development (plains and lowlands).<br />
ii. Support Missi<strong>on</strong>s for <str<strong>on</strong>g>the</str<strong>on</strong>g> Rural Area<br />
- Diversificati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> sources <str<strong>on</strong>g>of</str<strong>on</strong>g> income in <str<strong>on</strong>g>the</str<strong>on</strong>g> rural area.<br />
- <strong>Development</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> water and agricultural facilities (plain and lowlands).<br />
- Gender and development.<br />
The CMDT supplies inputs for <str<strong>on</strong>g>the</str<strong>on</strong>g> coming seas<strong>on</strong> depending <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> needs <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
producers (seeds, insecticides and fertilisers). Moreover, it trains and equips<br />
blacksmiths who work with agricultural implements (planters, ploughs etc).<br />
The CMDT supplies seeds free <str<strong>on</strong>g>of</str<strong>on</strong>g> charge. The o<str<strong>on</strong>g>the</str<strong>on</strong>g>r inputs are sold to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
farmers at cost (distributi<strong>on</strong> included). Since 1994/1995, <str<strong>on</strong>g>the</str<strong>on</strong>g> transfer price has<br />
been less than <str<strong>on</strong>g>the</str<strong>on</strong>g> cost price. This means that <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT indirectly subsidies<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> purchase <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs, especially a part <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> taxes.<br />
77
The OVHN is active in areas such as Koulikoro, Kati, Kangaba, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
surroundings <str<strong>on</strong>g>of</str<strong>on</strong>g> Bamako. In 1991, it became public administrative instituti<strong>on</strong><br />
that promotes food and industrial crops in its area <str<strong>on</strong>g>of</str<strong>on</strong>g> activity. The OVHN<br />
promotes producti<strong>on</strong>, manages natural resources and land, develops, equips<br />
and organises <str<strong>on</strong>g>the</str<strong>on</strong>g> rural area and m<strong>on</strong>itors and assesses development activities.<br />
As a result <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> restructuring, <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT resorted to cott<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> supply<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> inputs. Government duties were transferred to government technical<br />
services. Uni<strong>on</strong>s supply n<strong>on</strong>-strategic inputs for cott<strong>on</strong>.<br />
3. The Institute <str<strong>on</strong>g>of</str<strong>on</strong>g> Rural Ec<strong>on</strong>omics (IER)<br />
It is through such specialised services (programmes, cott<strong>on</strong>, research,<br />
producti<strong>on</strong> and management system <str<strong>on</strong>g>of</str<strong>on</strong>g> natural resources, sector ec<strong>on</strong>omics)<br />
charged to generate technologies for cott<strong>on</strong> development in Mali. It has made<br />
several achievements, especially with regard to cott<strong>on</strong> varieties such as <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
NTA series, <str<strong>on</strong>g>the</str<strong>on</strong>g> existing typology at <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT etc.<br />
4. HUICOMA<br />
HUICOMA (Cott<strong>on</strong> Oil Plants <str<strong>on</strong>g>of</str<strong>on</strong>g> Mali) is a limited liability company that is<br />
engaged in cott<strong>on</strong> seed grinding, o<str<strong>on</strong>g>the</str<strong>on</strong>g>r oleaginous produce, oil producti<strong>on</strong> and<br />
o<str<strong>on</strong>g>the</str<strong>on</strong>g>r related products from <str<strong>on</strong>g>the</str<strong>on</strong>g>se raw materials. The main products are<br />
refined oil, soap and animal feed. HUICOMA also markets its products in<br />
both Mali and abroad. Based <strong>on</strong> an agreement with <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT, HUICOMA<br />
buys cott<strong>on</strong> seeds and uses <str<strong>on</strong>g>the</str<strong>on</strong>g>m <strong>on</strong>ly for grinding.<br />
5. COMATEX<br />
COMATEX (Malian Textile Company) produces, markets, imports and<br />
exports textile products such as thread, clothing, furniture material, industrial<br />
material and imports and exports thread and unbleached linen. A number <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
investments have been made to replace part <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> equipment and facilities as<br />
part <str<strong>on</strong>g>of</str<strong>on</strong>g> a loan agreement between China and Mali. Within <str<strong>on</strong>g>the</str<strong>on</strong>g> framework <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
an agreement between <str<strong>on</strong>g>the</str<strong>on</strong>g> Government <str<strong>on</strong>g>of</str<strong>on</strong>g> Mali and COMATEX, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
government lobby <str<strong>on</strong>g>the</str<strong>on</strong>g> EDM and <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT to grant acceptable commercial<br />
c<strong>on</strong>diti<strong>on</strong>s to COMATEX as so<strong>on</strong> as possible.<br />
6. ITEMA<br />
Produces and markets cott<strong>on</strong> yarn, unbleached linen and printed linen. Like<br />
with COMATEX, <str<strong>on</strong>g>the</str<strong>on</strong>g> government promotes negotiati<strong>on</strong>s with ITEMA<br />
78
(Malian Textile Industries) and EDM in order to secure acceptable<br />
commercial c<strong>on</strong>diti<strong>on</strong>s, taking into account <str<strong>on</strong>g>the</str<strong>on</strong>g> specifics <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> textile<br />
industry.<br />
7. FITINA-SA<br />
(Natural Yarn and Fabric <str<strong>on</strong>g>of</str<strong>on</strong>g> Africa) This weaving company came into being<br />
in 2004 as a result <str<strong>on</strong>g>of</str<strong>on</strong>g> collaborati<strong>on</strong> am<strong>on</strong>g Malian ec<strong>on</strong>omic operators and<br />
Mauritian and French industrialists. It aims to make use <str<strong>on</strong>g>of</str<strong>on</strong>g> local raw material<br />
to produce fabric mainly for export.<br />
8. COPACO (The Parisian Cott<strong>on</strong> Company)<br />
It is a branch <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> CFDT, which c<strong>on</strong>cluded with <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT an agreement to<br />
assist in <str<strong>on</strong>g>the</str<strong>on</strong>g> marketing <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> yarn. In accordance with <str<strong>on</strong>g>the</str<strong>on</strong>g> agreement,<br />
COPACO shall negotiate cott<strong>on</strong> yarn sale c<strong>on</strong>tracts under <str<strong>on</strong>g>the</str<strong>on</strong>g> best terms and<br />
help to formulate and implement <str<strong>on</strong>g>the</str<strong>on</strong>g> commercial policy <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT. In <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
event o<str<strong>on</strong>g>the</str<strong>on</strong>g>r traders or businessmen request sales directly, COPACO shall<br />
send such requests to <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT. COPACO shall receive 0.5% <str<strong>on</strong>g>of</str<strong>on</strong>g> a c<strong>on</strong>tract<br />
value as a fee for <str<strong>on</strong>g>the</str<strong>on</strong>g> service rendered. CMDT opened an <str<strong>on</strong>g>of</str<strong>on</strong>g>fice in 1989 in<br />
Paris, which m<strong>on</strong>itors transacti<strong>on</strong>s.<br />
9. Stakeholders in Transport<br />
Transport is provided by <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT and private operators. The CMDT<br />
standardises transport fares between <str<strong>on</strong>g>the</str<strong>on</strong>g> closest farms and fur<str<strong>on</strong>g>the</str<strong>on</strong>g>st <strong>on</strong>es from<br />
processing units. According to <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT’s audit report <strong>on</strong> transport,<br />
standardisati<strong>on</strong> protects <str<strong>on</strong>g>the</str<strong>on</strong>g> most distant producers from higher fares.<br />
However, such a measure requires a centralised structure, which no private<br />
individual has <str<strong>on</strong>g>the</str<strong>on</strong>g> means to fulfil. Price is a determining factor in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
enthusiasm <str<strong>on</strong>g>of</str<strong>on</strong>g> truck drivers. The fare c<strong>on</strong>ceded by <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT is <strong>on</strong>ly 65 CFA<br />
francs/tkm. During marketing, cott<strong>on</strong> seeds are transported at <str<strong>on</strong>g>the</str<strong>on</strong>g> same time<br />
with inputs, yarn, seeds and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r products. Yarn produced by factories<br />
situated in <str<strong>on</strong>g>the</str<strong>on</strong>g> south is transported by private carriers to <str<strong>on</strong>g>the</str<strong>on</strong>g> port <str<strong>on</strong>g>of</str<strong>on</strong>g> Abidjan.<br />
On <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r hand, <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT transports seeds to <str<strong>on</strong>g>the</str<strong>on</strong>g> oil processing factories<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> HUICOMA. It should be noted that <str<strong>on</strong>g>the</str<strong>on</strong>g> government has decided <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
CMDT must pull out gradually from transport. The CMDT is still<br />
transporting most <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> seeds from <str<strong>on</strong>g>the</str<strong>on</strong>g> farms to <str<strong>on</strong>g>the</str<strong>on</strong>g> factories until <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
private sector can optimally supply factories during <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> ginning<br />
seas<strong>on</strong>. It is for <str<strong>on</strong>g>the</str<strong>on</strong>g> same reas<strong>on</strong> that <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT has reservati<strong>on</strong>s about <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Malian Shipping Company (SONAM) given <str<strong>on</strong>g>the</str<strong>on</strong>g> magnitude <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> market, 30<br />
billi<strong>on</strong> CFA francs.<br />
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10. Stakeholders in Financing (<str<strong>on</strong>g>the</str<strong>on</strong>g> banking pool)<br />
Rural credit has been <str<strong>on</strong>g>the</str<strong>on</strong>g> preserve <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT for quite a l<strong>on</strong>g time in<br />
sou<str<strong>on</strong>g>the</str<strong>on</strong>g>rn Mali. In <str<strong>on</strong>g>the</str<strong>on</strong>g> early eighties, <str<strong>on</strong>g>the</str<strong>on</strong>g> government <str<strong>on</strong>g>of</str<strong>on</strong>g> Mali, assisted by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Caisse Francaise de Developpement (CFD) set up a nati<strong>on</strong>al agricultural<br />
credit fund, namely <str<strong>on</strong>g>the</str<strong>on</strong>g> Nati<strong>on</strong>al Agricultural <strong>Development</strong> Bank (BNDA). It<br />
was designed to be a decentralised instituti<strong>on</strong> that collects farmers’ savings<br />
and would gradually replace <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT as far as credit was c<strong>on</strong>cerned.<br />
In general, <str<strong>on</strong>g>the</str<strong>on</strong>g> industry is funded by local banks, chief am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g>m is <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
BDM, which is supported by foreign banks. The BNDA grants loans to<br />
Village Associati<strong>on</strong>s to buy agricultural inputs. Its has gained momentum<br />
over recent years. Indeed, it replaced <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT gradually, which used to<br />
grant loans directly to village associati<strong>on</strong>s. For instance, in 1997/1998,<br />
approximately 60% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>se associati<strong>on</strong>s did welcome <str<strong>on</strong>g>the</str<strong>on</strong>g> BNDA. A loan is<br />
granted <strong>on</strong>ly after it is approved by <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT. This is a precauti<strong>on</strong> that<br />
ensures that cott<strong>on</strong> is paid for by a transfer to <str<strong>on</strong>g>the</str<strong>on</strong>g> accounts <str<strong>on</strong>g>of</str<strong>on</strong>g> village<br />
associati<strong>on</strong>s. C<strong>on</strong>sequently, <str<strong>on</strong>g>the</str<strong>on</strong>g> BNDA is refunded directly by deducting <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
due sums from <str<strong>on</strong>g>the</str<strong>on</strong>g> proceeds <str<strong>on</strong>g>of</str<strong>on</strong>g> producers.<br />
11. The Savings Network and <str<strong>on</strong>g>the</str<strong>on</strong>g> Decentralised Kafo Jiginew Credit<br />
Uni<strong>on</strong><br />
Because <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> shortcomings <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT credit system and <str<strong>on</strong>g>the</str<strong>on</strong>g> acti<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> BNDA, <str<strong>on</strong>g>the</str<strong>on</strong>g> decentralised network project proposed by <str<strong>on</strong>g>the</str<strong>on</strong>g> Cooperative<br />
Credit Uni<strong>on</strong> was supported by <str<strong>on</strong>g>the</str<strong>on</strong>g> authorities (including <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
BNDA) and some d<strong>on</strong>ors.<br />
After <str<strong>on</strong>g>the</str<strong>on</strong>g>y became aware <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> shortcomings <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> BNDA and c<strong>on</strong>sidered<br />
carefully <str<strong>on</strong>g>the</str<strong>on</strong>g> diversificati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> credit instituti<strong>on</strong>s, <str<strong>on</strong>g>the</str<strong>on</strong>g>y decided to have a<br />
network <str<strong>on</strong>g>of</str<strong>on</strong>g> savings and credit uni<strong>on</strong>s that are in line with <str<strong>on</strong>g>the</str<strong>on</strong>g>ir needs. This is<br />
how Kafo Jiguinew (federati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> seed stores in Bamana – <str<strong>on</strong>g>the</str<strong>on</strong>g> most widely<br />
spoken nati<strong>on</strong>al language in Mali) was established in 1988 as a customary<br />
law associati<strong>on</strong> with headquarters in Koutiala. It has been supported since its<br />
incepti<strong>on</strong> by <str<strong>on</strong>g>the</str<strong>on</strong>g> European C<strong>on</strong>sortium for Cooperative Credit (CECCM),<br />
which is a group <str<strong>on</strong>g>of</str<strong>on</strong>g> European NGOs. The European Uni<strong>on</strong> finances half <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
support project.<br />
80
IV. FACTORS AND CONDITIONS OF ENHANCING PRODUCTIVITY<br />
AND COMPETITIVENESS OF THE INDUSTRY<br />
1. The Technical and Instituti<strong>on</strong>al Factors Necessary to Enhance<br />
Productivity <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Cultivati<strong>on</strong><br />
Previous analyses have indicated that <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s ec<strong>on</strong>omy relies heavily <strong>on</strong><br />
cott<strong>on</strong> produce. It is nearly <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly source <str<strong>on</strong>g>of</str<strong>on</strong>g> income for most producers.<br />
One can imagine <str<strong>on</strong>g>the</str<strong>on</strong>g> socio-ec<strong>on</strong>omic impact this can have. C<strong>on</strong>sequently, it is<br />
important to ensure cott<strong>on</strong> produce is sustainable and that both its quantity<br />
and quality are improved in <str<strong>on</strong>g>the</str<strong>on</strong>g> best possible c<strong>on</strong>diti<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> competitiveness.<br />
Am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> most important technical factors that ensures and sustains cott<strong>on</strong><br />
producti<strong>on</strong> is <str<strong>on</strong>g>the</str<strong>on</strong>g> soil, which should be kept fertile. This is even more<br />
important because soil fertility is seen as <strong>on</strong>e cause <str<strong>on</strong>g>of</str<strong>on</strong>g> low yield in major<br />
crops over recent years. The decrease in soil fertility is worrying because <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
medium and l<strong>on</strong>g term future <str<strong>on</strong>g>of</str<strong>on</strong>g> sou<str<strong>on</strong>g>the</str<strong>on</strong>g>rn Mali’s producti<strong>on</strong> potential <strong>on</strong><br />
which <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s ec<strong>on</strong>omy partly relies is under threat. Indeed <str<strong>on</strong>g>the</str<strong>on</strong>g> increase<br />
in cott<strong>on</strong> producti<strong>on</strong> this year was not due to an increase in yield but to an<br />
expansi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> farmland thus exerting pressure <strong>on</strong> natural resources and <str<strong>on</strong>g>the</str<strong>on</strong>g> use<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> all agricultural land in some provinces.<br />
Because <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> dire need to ensure proper soil management so as to improve<br />
sustainable producti<strong>on</strong> systems while protecting <str<strong>on</strong>g>the</str<strong>on</strong>g> envir<strong>on</strong>ment, Mali has<br />
joined <str<strong>on</strong>g>the</str<strong>on</strong>g> Soil Fertility Initiative (IFS), which promotes rural development<br />
and food security in sub-sahran countries. It is backed by an associati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
internati<strong>on</strong>al agencies and some countries. This membership is imperative<br />
and in line with <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al policy <strong>on</strong> poverty reducti<strong>on</strong>, which is supported<br />
by Mali’s development partners. The objectives <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> initiative are:<br />
• Draw up a nati<strong>on</strong>al policy <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> sustainable management <str<strong>on</strong>g>of</str<strong>on</strong>g> soil<br />
fertility<br />
• Promote sustainable producti<strong>on</strong> systems by restoring, maintaining<br />
and improving soil productivity and proper management <str<strong>on</strong>g>of</str<strong>on</strong>g> water<br />
resources<br />
• Establish and develop a market that can supply inputs, especially<br />
fertilisers and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r soil enriching agents<br />
• Train <str<strong>on</strong>g>the</str<strong>on</strong>g> major players to become pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>als<br />
81
The strategies are:<br />
• Support nati<strong>on</strong>al instituti<strong>on</strong>s<br />
• Help farmers’ organisati<strong>on</strong>s to promote sustainable productive<br />
systems through an integrated approach to <str<strong>on</strong>g>the</str<strong>on</strong>g> management <str<strong>on</strong>g>of</str<strong>on</strong>g> soil<br />
fertility, land ownership and integrati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> agriculture and livestock<br />
breeding<br />
• M<strong>on</strong>etarise agriculture by promoting commercial speculati<strong>on</strong> and<br />
increase <str<strong>on</strong>g>the</str<strong>on</strong>g> added value <str<strong>on</strong>g>of</str<strong>on</strong>g> agricultural produce and livestock<br />
products <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers<br />
• Make farmers and stakeholders more pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>al.<br />
Back up measures are necessary to create greater incentives. Therefore, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
government should take measures <strong>on</strong> prices for agricultural produce,<br />
infrastructure development, enhancement <str<strong>on</strong>g>of</str<strong>on</strong>g> informati<strong>on</strong> systems <strong>on</strong> markets<br />
for inputs and agricultural produce.<br />
The major factor effecting cott<strong>on</strong> productivity is technical. A joint cott<strong>on</strong><br />
programme <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> IER and <str<strong>on</strong>g>the</str<strong>on</strong>g> ESPGRN <str<strong>on</strong>g>of</str<strong>on</strong>g> Sikasso entitled “ Identifying <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
impediments to greater cott<strong>on</strong> cultivati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> province <str<strong>on</strong>g>of</str<strong>on</strong>g> Sikasso” brought<br />
to light <str<strong>on</strong>g>the</str<strong>on</strong>g> major factors. They include <str<strong>on</strong>g>the</str<strong>on</strong>g> date <str<strong>on</strong>g>of</str<strong>on</strong>g> planting, date <str<strong>on</strong>g>of</str<strong>on</strong>g> singling,<br />
number weeding sessi<strong>on</strong>s, quantity <str<strong>on</strong>g>of</str<strong>on</strong>g> grass to weed out, mineral or organic<br />
fertilisati<strong>on</strong>, planting with mineral fertilisati<strong>on</strong> and phytosanitary protecti<strong>on</strong>.<br />
Findings have shown that 69% <str<strong>on</strong>g>of</str<strong>on</strong>g> yield/ha variability is due to <str<strong>on</strong>g>the</str<strong>on</strong>g> abovementi<strong>on</strong>ed<br />
farming techniques (Sanogo and al, 1990). The findings <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
same study have also shown that <str<strong>on</strong>g>the</str<strong>on</strong>g>re are close links between <str<strong>on</strong>g>the</str<strong>on</strong>g> decrease in<br />
fertility <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>e hand and <str<strong>on</strong>g>the</str<strong>on</strong>g> lack <str<strong>on</strong>g>of</str<strong>on</strong>g> anti-erosive mechanisms or a<br />
cultivati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> a string <str<strong>on</strong>g>of</str<strong>on</strong>g> grain crops (millet/sorghum) <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r hand.<br />
Erosi<strong>on</strong> is a real envir<strong>on</strong>mental scourge.<br />
Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r study (Fok et al, 1999) that <str<strong>on</strong>g>the</str<strong>on</strong>g> IER and CIRAD c<strong>on</strong>ducted in 1997,<br />
1998 and 1999 <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> diversity <str<strong>on</strong>g>of</str<strong>on</strong>g> farming practices in cott<strong>on</strong> producing areas<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> Mali indicated that <str<strong>on</strong>g>the</str<strong>on</strong>g> techniques applied are very diverse. The<br />
shortcomings highlighted in <str<strong>on</strong>g>the</str<strong>on</strong>g> survey are more c<strong>on</strong>cerned with <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
applicati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r techniques that can increase yield than with chemical<br />
inputs. It appeared that such practices are due, at least in part, to various<br />
c<strong>on</strong>straints that <str<strong>on</strong>g>the</str<strong>on</strong>g> countries are faced with such as <str<strong>on</strong>g>the</str<strong>on</strong>g> availability <str<strong>on</strong>g>of</str<strong>on</strong>g> seeds<br />
before <str<strong>on</strong>g>the</str<strong>on</strong>g> rainy seas<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> farming schedule, inadequate manpower,<br />
insufficient and/or lack <str<strong>on</strong>g>of</str<strong>on</strong>g> agricultural implements (particularly carts to carry<br />
manure) etc. The widespread use <str<strong>on</strong>g>of</str<strong>on</strong>g> cattle (over 2,000,000) is <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
techniques that boosts agricultural output in cott<strong>on</strong> producti<strong>on</strong> areas. It has<br />
helped to increase organic matter for <str<strong>on</strong>g>the</str<strong>on</strong>g> preparati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> compost. However,<br />
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its producti<strong>on</strong> is slow compared to <str<strong>on</strong>g>the</str<strong>on</strong>g> increase in cultivated land area. There<br />
is a greater need for organic matter with <str<strong>on</strong>g>the</str<strong>on</strong>g> expansi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cultivated land<br />
areas for cott<strong>on</strong> and corn. Indeed <str<strong>on</strong>g>the</str<strong>on</strong>g>se crops require a lot <str<strong>on</strong>g>of</str<strong>on</strong>g> organic-mineral<br />
fertilisers.<br />
Crop variety enhancement and phytosanitary protecti<strong>on</strong> are also am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
factors that c<strong>on</strong>tribute to greater productivity. Crop variety enhancement has<br />
solved various agricultural and climatic c<strong>on</strong>straints (resistance to or tolerance<br />
to diseases and insects), producers’ demands c<strong>on</strong>cerning productivity and its<br />
comp<strong>on</strong>ents, industrialists through fibre yields, ginning, which c<strong>on</strong>tinues to<br />
grow at least in West Africa and finally <str<strong>on</strong>g>the</str<strong>on</strong>g> technological requirements <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
spinning through crop varieties that have met <str<strong>on</strong>g>the</str<strong>on</strong>g> requirements over time.<br />
In Mali’s case, all <str<strong>on</strong>g>the</str<strong>on</strong>g> varieties developed so far have met <str<strong>on</strong>g>the</str<strong>on</strong>g> requirements <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> variety enhancement programme, i.e. coming up with varieties that are<br />
productive and adapted to <str<strong>on</strong>g>the</str<strong>on</strong>g> changing c<strong>on</strong>diti<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> area and having<br />
better yarn yield during ginning and good technological features. So each<br />
developed variety has improved <str<strong>on</strong>g>the</str<strong>on</strong>g> previous variety. This is why <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
cultivati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> variety B 163, introduced in 1972 was generalized in 1981/82<br />
to replace BJA SM 67 with a low yarn yield during ginning (37.5%) and a<br />
low germinati<strong>on</strong> rate (55 to 60%) thus making <str<strong>on</strong>g>the</str<strong>on</strong>g> industry unpr<str<strong>on</strong>g>of</str<strong>on</strong>g>itable.<br />
Because <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> length and excellent grade, am<strong>on</strong>g o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs, <str<strong>on</strong>g>of</str<strong>on</strong>g> this variety,<br />
which has been cultivated for 10 years, Malian cott<strong>on</strong> is c<strong>on</strong>sidered to be <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
good quality.<br />
However, its yarn proporti<strong>on</strong>, originally 40.1%, dwindled to approximately<br />
38% <str<strong>on</strong>g>the</str<strong>on</strong>g>reby making <str<strong>on</strong>g>the</str<strong>on</strong>g> industry unpr<str<strong>on</strong>g>of</str<strong>on</strong>g>itable. ISA 205 was <str<strong>on</strong>g>the</str<strong>on</strong>g>n introduced<br />
in 1988/89 mainly because <str<strong>on</strong>g>of</str<strong>on</strong>g> its high proporti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> yarn during ginning.<br />
Despite <str<strong>on</strong>g>the</str<strong>on</strong>g> length <str<strong>on</strong>g>of</str<strong>on</strong>g> its silk and its nepposity, since it was adopted <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
industry has been rescued and variety requirements have been enhanced.<br />
C<strong>on</strong>sequently, a variety with at least an equal proporti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> fibre <str<strong>on</strong>g>of</str<strong>on</strong>g> good<br />
quality and productivity had to be found. Such a variety was finally found.<br />
NTA 88-6, which was obtained from cross-breeding B.163 and N 205-3 (ISA<br />
205), was cultivated <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> entire land area <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> in Mali. This<br />
variety has many advantages (hardiness, productivity, high fibre yield <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
44%, l<strong>on</strong>g fibre: 1’1/8 <str<strong>on</strong>g>of</str<strong>on</strong>g> over 80%). Nowadays <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT rejects <str<strong>on</strong>g>the</str<strong>on</strong>g> variety<br />
<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> grounds that its clients claim that it is too yellowish. So untested<br />
foreign varieties that are acclaimed to be white are being adopted regardless<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> hazards <str<strong>on</strong>g>of</str<strong>on</strong>g> such a practice.<br />
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Finding a variety that is similar to NTA 88-6 in terms <str<strong>on</strong>g>of</str<strong>on</strong>g> its agr<strong>on</strong>omic and<br />
technological qualities toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r with a less yellowish colour (+b) is a major<br />
challenge that <str<strong>on</strong>g>the</str<strong>on</strong>g> country is faced with.<br />
The recommendati<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> various experiments <strong>on</strong> cott<strong>on</strong> plants have<br />
helped to ease labour and increase <str<strong>on</strong>g>the</str<strong>on</strong>g> farmland area, <str<strong>on</strong>g>the</str<strong>on</strong>g> yield and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
quality. Fur<str<strong>on</strong>g>the</str<strong>on</strong>g>rmore, with <str<strong>on</strong>g>the</str<strong>on</strong>g> new recommended produce <str<strong>on</strong>g>the</str<strong>on</strong>g> toxicity <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
produce and its attendant hazards have declined. The phytosanitary protecti<strong>on</strong><br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> plants is now widespread and is c<strong>on</strong>ducted according a timetable <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
5 to 6 foliar treatments. The treatment starts when <str<strong>on</strong>g>the</str<strong>on</strong>g> plants start blossoming<br />
and lasts for 14 days. However, <str<strong>on</strong>g>the</str<strong>on</strong>g> following criticisms are leveled against<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> treatment:<br />
• A rigid system that does not take into account <str<strong>on</strong>g>the</str<strong>on</strong>g> parasitic level <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> crop<br />
• High protecti<strong>on</strong> cost<br />
• The use <str<strong>on</strong>g>of</str<strong>on</strong>g> some dangerous and active substances<br />
• ULV spraying has limits and is ineffective <strong>on</strong> certain pests such as<br />
insects that produce h<strong>on</strong>eydew<br />
The system <str<strong>on</strong>g>of</str<strong>on</strong>g> combating pests called Lutte Etagee Ciblee, which is a median<br />
soluti<strong>on</strong> between <str<strong>on</strong>g>the</str<strong>on</strong>g> classical schedule and interventi<strong>on</strong> thresholds, which<br />
started in <str<strong>on</strong>g>the</str<strong>on</strong>g> farming community in 1993, will gradually replace <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
scheduled treatment and will cover <str<strong>on</strong>g>the</str<strong>on</strong>g> entire cott<strong>on</strong> producti<strong>on</strong> area. It helps<br />
to provide for reas<strong>on</strong>able protecti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> crops and is changeable according to<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> pressure <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> pest. The applicati<strong>on</strong>s are c<strong>on</strong>ducted with a quantity <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
products reduced by half compared to <str<strong>on</strong>g>the</str<strong>on</strong>g> current timetable i.e. 0.5 l/ha<br />
instead <str<strong>on</strong>g>of</str<strong>on</strong>g> 1 1/ha thus providing ec<strong>on</strong>omics <str<strong>on</strong>g>of</str<strong>on</strong>g> scale. The methodology is<br />
based <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> observati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> 25 plants across a plot by <str<strong>on</strong>g>the</str<strong>on</strong>g> farmers <str<strong>on</strong>g>the</str<strong>on</strong>g>mselves,<br />
who have been trained in this regard. The rati<strong>on</strong>ale <str<strong>on</strong>g>of</str<strong>on</strong>g> such a method is <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
tolerable permissible residue. The thresholds also called ec<strong>on</strong>omic thresholds<br />
or interventi<strong>on</strong> thresholds corresp<strong>on</strong>d to <str<strong>on</strong>g>the</str<strong>on</strong>g> maximum level <str<strong>on</strong>g>of</str<strong>on</strong>g> pest<br />
populati<strong>on</strong> that a crop can tolerate without <str<strong>on</strong>g>the</str<strong>on</strong>g> need for phytosanitary<br />
treatment.<br />
However, since 1997 in Mali and even in <str<strong>on</strong>g>the</str<strong>on</strong>g> West African sub-regi<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
populati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> some pests, mainly Helicoverpa armigera Hubner has been less<br />
sensitive to some active substances and insecticides, so <str<strong>on</strong>g>the</str<strong>on</strong>g>y are difficult to<br />
c<strong>on</strong>trol. At present, a soluti<strong>on</strong> has been found by <str<strong>on</strong>g>the</str<strong>on</strong>g> PR-PRAO project<br />
(Regi<strong>on</strong>al Preventi<strong>on</strong> and Management <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Resistance <str<strong>on</strong>g>of</str<strong>on</strong>g> Helicoverpa<br />
armigera to Pyrethrinoids). This technical innovati<strong>on</strong> called “window”<br />
programme is based <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> limited use <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> first two treatments with<br />
84
endosulfan and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r alternative products whose durability depends <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
farmers’ self discipline to limit its use with time. This self discipline suggests<br />
new ways <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>ducting research in close collaborati<strong>on</strong> with farmers’<br />
associati<strong>on</strong>s, and to a larger extent, with all <str<strong>on</strong>g>the</str<strong>on</strong>g> players c<strong>on</strong>cerned with<br />
agriculture taking into account <str<strong>on</strong>g>the</str<strong>on</strong>g> interests <str<strong>on</strong>g>of</str<strong>on</strong>g> everybody.<br />
The c<strong>on</strong>sultati<strong>on</strong> initiated by <str<strong>on</strong>g>the</str<strong>on</strong>g> Rural Ec<strong>on</strong>omics Institute (IER) in <str<strong>on</strong>g>the</str<strong>on</strong>g> early<br />
90s between research programmes <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> CNU (Regi<strong>on</strong>al Commissi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Users <str<strong>on</strong>g>of</str<strong>on</strong>g> Research Findings) at <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al level, and <str<strong>on</strong>g>the</str<strong>on</strong>g> CRU (Regi<strong>on</strong>al<br />
Commissi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Users) at <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong>al level illustrates <str<strong>on</strong>g>the</str<strong>on</strong>g> foregoing. This<br />
initiative should have helped not <strong>on</strong>ly to take into account producers’ needs<br />
and priorities, but also a better disseminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> research findings. Now we<br />
have realized that <str<strong>on</strong>g>the</str<strong>on</strong>g> aforementi<strong>on</strong>ed acti<strong>on</strong>s have not yielded all <str<strong>on</strong>g>the</str<strong>on</strong>g> results<br />
expected, due to many reas<strong>on</strong>s. First <str<strong>on</strong>g>of</str<strong>on</strong>g> all, <str<strong>on</strong>g>the</str<strong>on</strong>g> CRUs do not have enough<br />
time to disseminate <str<strong>on</strong>g>the</str<strong>on</strong>g> findings. Fur<str<strong>on</strong>g>the</str<strong>on</strong>g>rmore, <str<strong>on</strong>g>the</str<strong>on</strong>g>y are somewhat isolated<br />
from <str<strong>on</strong>g>the</str<strong>on</strong>g> majority <str<strong>on</strong>g>of</str<strong>on</strong>g> producers even though <str<strong>on</strong>g>the</str<strong>on</strong>g>ir members are from<br />
recognized farmers’ associati<strong>on</strong>s. Nati<strong>on</strong>al research would be advantageous if<br />
it focuses <strong>on</strong> federative organizati<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> producers such as <str<strong>on</strong>g>the</str<strong>on</strong>g> Associati<strong>on</strong>s<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> Pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>al Farmers’ Organisati<strong>on</strong>s (AOPP), which have greater<br />
legitimacy compared to all <str<strong>on</strong>g>the</str<strong>on</strong>g> farmers’ organizati<strong>on</strong>s (OPs), and fur<str<strong>on</strong>g>the</str<strong>on</strong>g>rmore<br />
has <str<strong>on</strong>g>the</str<strong>on</strong>g> resources to direct all <str<strong>on</strong>g>the</str<strong>on</strong>g> activities <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry during this phase <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
in-depth restructuring <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector.<br />
It should be noted that <str<strong>on</strong>g>the</str<strong>on</strong>g> government and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r partners whose nati<strong>on</strong>al and<br />
internati<strong>on</strong>al instituti<strong>on</strong>s are involved in <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>going reforms have high<br />
regards for <str<strong>on</strong>g>the</str<strong>on</strong>g> AOPP, which comprises a cott<strong>on</strong> commissi<strong>on</strong>. It should be<br />
recalled that, until recently, <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT, like all <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r cott<strong>on</strong> companies <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> sub-regi<strong>on</strong>, was <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly instituti<strong>on</strong> dealing with research. This role was<br />
played by <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT with such ease that it used to be involved directly or<br />
indirectly in all levels <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry. Its activities used to cover all<br />
agricultural forms <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> including livestock breeding, c<strong>on</strong>structi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
feeder roads, ginning, marketing <str<strong>on</strong>g>of</str<strong>on</strong>g> yarn, etc. The transfer <str<strong>on</strong>g>of</str<strong>on</strong>g> skills, which is<br />
demanded by various partners and d<strong>on</strong>ors, requires instituti<strong>on</strong>al reforms that<br />
are in line with <strong>on</strong>going privatizati<strong>on</strong>; <str<strong>on</strong>g>the</str<strong>on</strong>g> training <str<strong>on</strong>g>of</str<strong>on</strong>g> new players who will<br />
carry out all <str<strong>on</strong>g>the</str<strong>on</strong>g> activities required for <str<strong>on</strong>g>the</str<strong>on</strong>g> sustainability <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry.<br />
Those c<strong>on</strong>cerned, in <str<strong>on</strong>g>the</str<strong>on</strong>g> first place, are <str<strong>on</strong>g>the</str<strong>on</strong>g> OPs, which must be trained and<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>ir capacities streng<str<strong>on</strong>g>the</str<strong>on</strong>g>n to negotiate and implement <str<strong>on</strong>g>the</str<strong>on</strong>g> instituti<strong>on</strong>al<br />
development <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> sector. The OPs should take up certain roles <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> sector,<br />
especially by encouraging <str<strong>on</strong>g>the</str<strong>on</strong>g> emergence <str<strong>on</strong>g>of</str<strong>on</strong>g> properly managed pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>al<br />
structures that have a solid technical and ec<strong>on</strong>omic base. C<strong>on</strong>sultative<br />
frameworks should be set up to share informati<strong>on</strong> with <str<strong>on</strong>g>the</str<strong>on</strong>g> players <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
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industry. Such frameworks would help to ga<str<strong>on</strong>g>the</str<strong>on</strong>g>r, compare and validate data<br />
from <str<strong>on</strong>g>the</str<strong>on</strong>g> OPs, research instituti<strong>on</strong>s, financing bodies, <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT, all<br />
ec<strong>on</strong>omic operators that operate in cott<strong>on</strong> producti<strong>on</strong> areas, and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
authorities c<strong>on</strong>cerned with rural development so that technical and ec<strong>on</strong>omic<br />
developments can be m<strong>on</strong>itored.<br />
In additi<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> OPs, <str<strong>on</strong>g>the</str<strong>on</strong>g>re are operators in <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector whose impact<br />
is prep<strong>on</strong>derant <strong>on</strong> cott<strong>on</strong> producti<strong>on</strong> such as suppliers <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs (fertilizers<br />
and pesticides), transporters and financing and credit organizati<strong>on</strong>s. All <str<strong>on</strong>g>the</str<strong>on</strong>g>se<br />
players are c<strong>on</strong>cerned with <str<strong>on</strong>g>the</str<strong>on</strong>g> supply <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs, which is <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> most<br />
critical functi<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> agricultural producti<strong>on</strong>. The outcome <str<strong>on</strong>g>of</str<strong>on</strong>g> such supply<br />
depends, to a large extent, <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> outcome <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> agricultural seas<strong>on</strong>. Input<br />
supply depends mainly <strong>on</strong> agricultural credit, without which <str<strong>on</strong>g>the</str<strong>on</strong>g>re will be no<br />
supply. The Nati<strong>on</strong>al Agricultural <strong>Development</strong> Bank (BNDA) is <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
financial instituti<strong>on</strong> that handles agricultural credit and decentralized<br />
financial services i.e. savings and credit funds such as KAFO JIGUINEW,<br />
which are <str<strong>on</strong>g>the</str<strong>on</strong>g> most prominent. This network <str<strong>on</strong>g>of</str<strong>on</strong>g> agricultural credit uni<strong>on</strong>s had<br />
5.6 billi<strong>on</strong> CFA francs as savings and granted 6.1 billi<strong>on</strong> CFA francs as credit<br />
from 124 funds in <str<strong>on</strong>g>the</str<strong>on</strong>g> entire cott<strong>on</strong> producti<strong>on</strong> z<strong>on</strong>e by 31/12/2001.<br />
The CMDT also grants agricultural credit, especially for inputs after<br />
purchase, depending <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> needs <str<strong>on</strong>g>of</str<strong>on</strong>g> producers, which are identified by its<br />
decentralized structures (training by <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT, technical teams <str<strong>on</strong>g>of</str<strong>on</strong>g> Village<br />
Associati<strong>on</strong>s and APCs. Finally, NGOs are also involved in <str<strong>on</strong>g>the</str<strong>on</strong>g> inputs supply<br />
and distributi<strong>on</strong> network. In general, <str<strong>on</strong>g>the</str<strong>on</strong>g>y intervene in areas that are<br />
insufficiently covered by <str<strong>on</strong>g>the</str<strong>on</strong>g> Office <str<strong>on</strong>g>of</str<strong>on</strong>g> Rural <strong>Development</strong>.<br />
The OPs play a major role in agricultural credit because <str<strong>on</strong>g>of</str<strong>on</strong>g> collective<br />
guarantees. As stated earlier, <str<strong>on</strong>g>the</str<strong>on</strong>g>y ga<str<strong>on</strong>g>the</str<strong>on</strong>g>r and analyse informati<strong>on</strong> to<br />
determine <str<strong>on</strong>g>the</str<strong>on</strong>g> inputs needed. They help to distribute inputs and recover loans.<br />
The role <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> OPs has been growing since <str<strong>on</strong>g>the</str<strong>on</strong>g> launch <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> empowerment<br />
process and <str<strong>on</strong>g>the</str<strong>on</strong>g> shift <str<strong>on</strong>g>of</str<strong>on</strong>g> resp<strong>on</strong>sibilities advocated by <str<strong>on</strong>g>the</str<strong>on</strong>g> government since<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> 80s and <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> forums <str<strong>on</strong>g>of</str<strong>on</strong>g> April 2001. Because <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> high risks <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
agricultural credit, which are related to climatic c<strong>on</strong>diti<strong>on</strong>s thus leading to<br />
serious default payments, commercial banks, apart from <str<strong>on</strong>g>the</str<strong>on</strong>g> BNDA, rarely<br />
engage in it. It should be recalled that for two years now a group <str<strong>on</strong>g>of</str<strong>on</strong>g> nati<strong>on</strong>al<br />
and foreign banks, chief am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g>m is <str<strong>on</strong>g>the</str<strong>on</strong>g> BDM, mobilized <str<strong>on</strong>g>the</str<strong>on</strong>g> entire credit<br />
required for <str<strong>on</strong>g>the</str<strong>on</strong>g> marketing <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> seeds at a very difficult time for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
cott<strong>on</strong> sector. All <str<strong>on</strong>g>the</str<strong>on</strong>g> activities stated above are some <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> major c<strong>on</strong>cerns<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> PASOP (Support Programme for <str<strong>on</strong>g>the</str<strong>on</strong>g> Agricultural Sector and Farmers’<br />
Organisati<strong>on</strong>s). Its major aim is to promote am<strong>on</strong>g farmers a sense <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
resp<strong>on</strong>sibility through a policy <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>sultati<strong>on</strong>s (c<strong>on</strong>sultati<strong>on</strong> forums),<br />
86
c<strong>on</strong>tractualisati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> services, streng<str<strong>on</strong>g>the</str<strong>on</strong>g>ning channels <str<strong>on</strong>g>of</str<strong>on</strong>g> informati<strong>on</strong> and<br />
training producers via chambers <str<strong>on</strong>g>of</str<strong>on</strong>g> agriculture, uni<strong>on</strong>s and pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>al<br />
organizati<strong>on</strong>s. The programme is financed by <str<strong>on</strong>g>the</str<strong>on</strong>g> World Bank through <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Adaptable Loan Programme (APL) over a period <str<strong>on</strong>g>of</str<strong>on</strong>g> 11 years with 3 phases <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
three, four and four years respectively. The main objective <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> first phase<br />
is to set up an instituti<strong>on</strong>al framework to support farmers efficiently, by<br />
encouraging private operators to get involved and by streng<str<strong>on</strong>g>the</str<strong>on</strong>g>ning <str<strong>on</strong>g>the</str<strong>on</strong>g> OPs.<br />
PASOP’s main objectives are to:<br />
• Refocus government services <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir essential missi<strong>on</strong>s<br />
• Work out a l<strong>on</strong>g term strategy and medium term plan <str<strong>on</strong>g>of</str<strong>on</strong>g> acti<strong>on</strong> for<br />
rural training and informati<strong>on</strong><br />
• Draw up an effective and sustainable agricultural research<br />
programme that can meet demand<br />
• Set up an efficient technical board that involves <str<strong>on</strong>g>the</str<strong>on</strong>g> producers<br />
• C<strong>on</strong>duct a pilot acti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>tractualised agricultural boards with <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
producers<br />
• Streng<str<strong>on</strong>g>the</str<strong>on</strong>g>n <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al programme <str<strong>on</strong>g>of</str<strong>on</strong>g> fighting AIDS in <str<strong>on</strong>g>the</str<strong>on</strong>g> rural area<br />
• Help OPs improve services for <str<strong>on</strong>g>the</str<strong>on</strong>g>ir members and help formulate<br />
agricultural policies.<br />
This being <str<strong>on</strong>g>the</str<strong>on</strong>g> case, <str<strong>on</strong>g>the</str<strong>on</strong>g>re should be collaborati<strong>on</strong> between PASOP, which<br />
deals with <str<strong>on</strong>g>the</str<strong>on</strong>g> whole <str<strong>on</strong>g>of</str<strong>on</strong>g> Mali, and PASE (Farming System Improvement<br />
Prgramme in Cott<strong>on</strong> Producti<strong>on</strong> Areas), which has been designed to ensure<br />
development in cott<strong>on</strong> producti<strong>on</strong> areas. This would help Malian <str<strong>on</strong>g>of</str<strong>on</strong>g>ficials to<br />
set up a new organizati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> industry that is adapted to <str<strong>on</strong>g>the</str<strong>on</strong>g> local situati<strong>on</strong><br />
and does not jeopardize <str<strong>on</strong>g>the</str<strong>on</strong>g> success achieved so far. The objective <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
PASE project is to help set up an efficient cott<strong>on</strong> sector that is based <strong>on</strong> both<br />
an instituti<strong>on</strong>al organizati<strong>on</strong> adopted by all players and sustainable efficient<br />
producti<strong>on</strong> systems. PASE’s three main objectives are to:<br />
• Build <str<strong>on</strong>g>the</str<strong>on</strong>g> capacity <str<strong>on</strong>g>of</str<strong>on</strong>g> Malian players to devise, negotiate and apply<br />
ways to ensure <str<strong>on</strong>g>the</str<strong>on</strong>g> instituti<strong>on</strong>al development <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> sector; emphasis<br />
will be laid <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> involvement <str<strong>on</strong>g>of</str<strong>on</strong>g> producers in <str<strong>on</strong>g>the</str<strong>on</strong>g> reflecti<strong>on</strong>s<br />
• Build <str<strong>on</strong>g>the</str<strong>on</strong>g> capacity <str<strong>on</strong>g>of</str<strong>on</strong>g> OPs so that <str<strong>on</strong>g>the</str<strong>on</strong>g>y can take up some functi<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> sector by encouraging <str<strong>on</strong>g>the</str<strong>on</strong>g> emergence <str<strong>on</strong>g>of</str<strong>on</strong>g> properly managed<br />
pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>al structures that have a solid technical and ec<strong>on</strong>omic base<br />
• Improve farming systems so as to be more efficient and sustainable.<br />
In a nutshell, all <str<strong>on</strong>g>the</str<strong>on</strong>g> players must play <str<strong>on</strong>g>the</str<strong>on</strong>g>ir role fully.<br />
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2. Qualitative and Organizati<strong>on</strong>al Factors Required for Greater<br />
Competitiveness <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Country’s Cott<strong>on</strong> Producti<strong>on</strong><br />
We have already pointed out that cott<strong>on</strong> is really a strategic produce <strong>on</strong> which<br />
our ec<strong>on</strong>omies depend heavily. C<strong>on</strong>sequently, cott<strong>on</strong> must be maintained by<br />
all means and its competitiveness enhanced c<strong>on</strong>stantly. Such an ambiti<strong>on</strong> is<br />
not wishful thinking. Statistics <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> ICAC indicate that West African rainfed<br />
cott<strong>on</strong> has a good yield, which stands at 600 kg/ha (ICIC 2000),<br />
compared to <str<strong>on</strong>g>the</str<strong>on</strong>g> world average <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> same types <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>. This yield<br />
coupled with <str<strong>on</strong>g>the</str<strong>on</strong>g> potential yield <str<strong>on</strong>g>of</str<strong>on</strong>g> yarn <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> varieties cultivated, which are<br />
am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> highest in <str<strong>on</strong>g>the</str<strong>on</strong>g> world (43 to 46%) have a higher fibre percentage<br />
per hectare. In order to generate pr<str<strong>on</strong>g>of</str<strong>on</strong>g>it, producti<strong>on</strong> must be ensured by<br />
making sure that all technical factors <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> have attained <str<strong>on</strong>g>the</str<strong>on</strong>g> required<br />
level, which must be used efficiently to reduce producti<strong>on</strong> costs. In this<br />
regard, hopes are high as far as research is c<strong>on</strong>cerned. The challenge is to<br />
shift from crass technologies to technologies adapted to agro-climatic<br />
c<strong>on</strong>diti<strong>on</strong>s and even socio-ec<strong>on</strong>omic c<strong>on</strong>diti<strong>on</strong>s that are targeted well with<br />
greater producti<strong>on</strong> expectati<strong>on</strong>s.<br />
The same thing applies to <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> products expected, especially yarn.<br />
Indeed, cott<strong>on</strong> is <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> rare products that is sold before it is sown. It is a<br />
known fact that commercial transacti<strong>on</strong>s between both parties (seller and<br />
buyer) are c<strong>on</strong>ducted <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> basis <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> features <str<strong>on</strong>g>of</str<strong>on</strong>g> varieties (length, grade<br />
etc). The features are mostly genetic despite a high probability <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
envir<strong>on</strong>mental effects. It is <str<strong>on</strong>g>the</str<strong>on</strong>g>refore very important that a fibre renowned for<br />
its c<strong>on</strong>stant technological features be placed in <str<strong>on</strong>g>the</str<strong>on</strong>g> market. In order to attain<br />
such an objective, a c<strong>on</strong>certed effort is necessary. Such a requirement is well<br />
understood in Mali. This is why, at a workshop organized <strong>on</strong> 3 and 4 October<br />
in Sikasso between all <str<strong>on</strong>g>the</str<strong>on</strong>g> partners <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> sectors, <str<strong>on</strong>g>the</str<strong>on</strong>g> main problems that<br />
impede quality were identified in all areas <str<strong>on</strong>g>of</str<strong>on</strong>g> activity. The workshop helped<br />
us to draw up a priority plan <str<strong>on</strong>g>of</str<strong>on</strong>g> acti<strong>on</strong> to improve <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> fibre<br />
produced. The need to acquire new equipment to c<strong>on</strong>trol quality arose. In this<br />
particular area, Mali, which is presently <str<strong>on</strong>g>the</str<strong>on</strong>g> largest producer <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> in<br />
Africa, has to make major efforts. Indeed, <str<strong>on</strong>g>the</str<strong>on</strong>g> country does not have any<br />
functi<strong>on</strong>al facilities to analyse cott<strong>on</strong> fibre. It depends entirely <strong>on</strong> external<br />
researchers for <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>duct <str<strong>on</strong>g>of</str<strong>on</strong>g> all analyses. This is at a time when <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a<br />
trend to generalize HVI measures in most cott<strong>on</strong> producing countries to<br />
enhance <str<strong>on</strong>g>the</str<strong>on</strong>g>ir cott<strong>on</strong>.<br />
With regard to <str<strong>on</strong>g>the</str<strong>on</strong>g> plan <str<strong>on</strong>g>of</str<strong>on</strong>g> acti<strong>on</strong> that has been drawn up, <str<strong>on</strong>g>the</str<strong>on</strong>g> major areas <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
acti<strong>on</strong> identified are:<br />
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• Produce seedlings, <strong>on</strong> which depends <str<strong>on</strong>g>the</str<strong>on</strong>g> entire agricultural activity,<br />
by choosing a good variety, storing and managing at all levels <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
producti<strong>on</strong>.<br />
• Improve harvest techniques <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>-seed to avoid polluti<strong>on</strong>.<br />
• Enhance producti<strong>on</strong> and use organic matter that would help to<br />
improve <str<strong>on</strong>g>the</str<strong>on</strong>g> management <str<strong>on</strong>g>of</str<strong>on</strong>g> soil fertility.<br />
• Maintain roads so as to facilitate <str<strong>on</strong>g>the</str<strong>on</strong>g> transport <str<strong>on</strong>g>of</str<strong>on</strong>g> harvests and avert<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> adverse effects <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> sun and polluti<strong>on</strong> risks.<br />
• Transport <str<strong>on</strong>g>the</str<strong>on</strong>g> means <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> and harvest.<br />
• Cott<strong>on</strong> ginning by applying guidelines <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> smooth operati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
factories and compliance with <str<strong>on</strong>g>the</str<strong>on</strong>g> procedures to acquire <strong>on</strong> time<br />
spare parts <str<strong>on</strong>g>of</str<strong>on</strong>g> good quality.<br />
• Improve skills in order to increasingly involve <str<strong>on</strong>g>the</str<strong>on</strong>g> marketing<br />
department <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT in <str<strong>on</strong>g>the</str<strong>on</strong>g> transport and sale <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> fibre<br />
(until recently, <str<strong>on</strong>g>the</str<strong>on</strong>g> bulk <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT’s cott<strong>on</strong> fibre has been<br />
marketed by COPACO).<br />
At <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong>al level, UEMOA has felt <str<strong>on</strong>g>the</str<strong>on</strong>g> need to improve quality for greater<br />
competitiveness. Apart from <str<strong>on</strong>g>the</str<strong>on</strong>g> measures taken to increase <str<strong>on</strong>g>the</str<strong>on</strong>g> volume <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
processed cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> sub-regi<strong>on</strong>, it also aims to improve <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
African cott<strong>on</strong> to ensure greater competitiveness. In order to do so, a study <strong>on</strong><br />
working out a regi<strong>on</strong>al plan <str<strong>on</strong>g>of</str<strong>on</strong>g> acti<strong>on</strong> <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> produced in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> UEMOA regi<strong>on</strong> was initiated recently with <str<strong>on</strong>g>the</str<strong>on</strong>g> support <str<strong>on</strong>g>of</str<strong>on</strong>g> UNIDO. The<br />
study, which will be c<strong>on</strong>ducted in five countries i.e. Benin, Burkina Faso,<br />
Mali, Niger and Togo, will seek to :<br />
• Assess <str<strong>on</strong>g>the</str<strong>on</strong>g> rating and quality <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong><br />
• Ga<str<strong>on</strong>g>the</str<strong>on</strong>g>r and update data <strong>on</strong> producti<strong>on</strong> and sale<br />
• Listen to all <str<strong>on</strong>g>the</str<strong>on</strong>g> players involved in quality producti<strong>on</strong><br />
• Understand <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>vergence and divergence <str<strong>on</strong>g>of</str<strong>on</strong>g> positi<strong>on</strong>s between <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
players and <str<strong>on</strong>g>the</str<strong>on</strong>g> countries <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> objectives and c<strong>on</strong>diti<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> a better<br />
quality<br />
• Draw up a plan <str<strong>on</strong>g>of</str<strong>on</strong>g> acti<strong>on</strong><br />
3. Competitiveness Indicators<br />
Since <str<strong>on</strong>g>the</str<strong>on</strong>g> devaluati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> CFA francs, <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> improved<br />
because 98.67% <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> was rated first choice in 1995/96. It stood at<br />
97.13% in 1999/00 i.e. a drop <str<strong>on</strong>g>of</str<strong>on</strong>g> 1.65%. This rating, which is based <strong>on</strong> two<br />
major criteria: <str<strong>on</strong>g>the</str<strong>on</strong>g> purity <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> (absence <str<strong>on</strong>g>of</str<strong>on</strong>g> residue, st<strong>on</strong>es and dust in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong>) and <str<strong>on</strong>g>the</str<strong>on</strong>g> colour (degree <str<strong>on</strong>g>of</str<strong>on</strong>g> yellowness), seems to be efficient<br />
89
according to SOFRECO (December 2000, page 10). It should also be noted<br />
over recent years <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT indicated major differences between classes <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
choice <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> supplied by producers and <str<strong>on</strong>g>the</str<strong>on</strong>g> rating <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> fibre after it is<br />
processed. It is <str<strong>on</strong>g>the</str<strong>on</strong>g> producers <str<strong>on</strong>g>the</str<strong>on</strong>g>mselves who rate <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong>. This has to be<br />
m<strong>on</strong>itored closely in order to avert any trend that is harmful to <str<strong>on</strong>g>the</str<strong>on</strong>g> sector.<br />
Better quality <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> also depends <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> command <str<strong>on</strong>g>of</str<strong>on</strong>g> farming techniques<br />
by producers and <strong>on</strong> storing c<strong>on</strong>diti<strong>on</strong>s. Marketing value and <str<strong>on</strong>g>the</str<strong>on</strong>g> durability <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> sector also depend <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> type <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> seed bought.<br />
As for producti<strong>on</strong> cost, <str<strong>on</strong>g>the</str<strong>on</strong>g> structure is as follows: producer price, collecti<strong>on</strong><br />
cost, market cost, interest <strong>on</strong> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r loans, CFDT technique assistance,<br />
overheads, training expenses, research expenses, OHVN (Office <str<strong>on</strong>g>of</str<strong>on</strong>g> Upper<br />
River Niger) expenses and miscellaneous expenses. Since <str<strong>on</strong>g>the</str<strong>on</strong>g> real costs are<br />
close to <str<strong>on</strong>g>the</str<strong>on</strong>g> estimated producti<strong>on</strong> costs <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> fibre, a comparative analysis<br />
was c<strong>on</strong>ducted between <str<strong>on</strong>g>the</str<strong>on</strong>g> real costs and <str<strong>on</strong>g>the</str<strong>on</strong>g> estimated costs <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> fibre<br />
<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>e hand and between <str<strong>on</strong>g>the</str<strong>on</strong>g> real cost and <str<strong>on</strong>g>the</str<strong>on</strong>g> sale price <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> price<br />
<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r hand. This is illustrated in <str<strong>on</strong>g>the</str<strong>on</strong>g> following table over <str<strong>on</strong>g>the</str<strong>on</strong>g> two<br />
seas<strong>on</strong>s: 1996/1997 and 1997/1998.<br />
Table 5. Trend in Average Cost and Sale Price During Crop Seas<strong>on</strong><br />
ITEM Crop Seas<strong>on</strong> Crop Seas<strong>on</strong> Average<br />
1996/1997 1997/1998<br />
1- Cost/objective (plan) 632.0 634.0 633.0<br />
2- Estimated cost (fibre) 635.8 636.6 636.2<br />
3- Actual Cost price (C&F) 669.2 779.9 724.6<br />
4- Average sale price 877.1 922.0 899.5<br />
Gap (2)-(1) 3.8 2.6 3.2<br />
Gap (3)-(2) 33.4 146.3 88.4<br />
Gap (4)-(3) 207.9 252.8 119.6<br />
One can see that <str<strong>on</strong>g>the</str<strong>on</strong>g> gap between <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> cost and <str<strong>on</strong>g>the</str<strong>on</strong>g> estimated cost<br />
is increasing: from 33.4 to 146.3 per kilogramme. This indicates that certain<br />
costs <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT are increasing such as <str<strong>on</strong>g>the</str<strong>on</strong>g> purchase <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> seed,<br />
collecti<strong>on</strong> cost, training, road maintenance and ginning. The same thing<br />
applies to <str<strong>on</strong>g>the</str<strong>on</strong>g> gap between <str<strong>on</strong>g>the</str<strong>on</strong>g> average sale price and <str<strong>on</strong>g>the</str<strong>on</strong>g> real producti<strong>on</strong> cost<br />
but less than <str<strong>on</strong>g>the</str<strong>on</strong>g> previous <strong>on</strong>e.<br />
Nominal protecti<strong>on</strong> coefficient (producer price ratio/world price) indicates<br />
that during <str<strong>on</strong>g>the</str<strong>on</strong>g> periods 1989-93 and 1996-97 <str<strong>on</strong>g>the</str<strong>on</strong>g> Malian producer earned less<br />
than 50% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world price but a bit more than <str<strong>on</strong>g>the</str<strong>on</strong>g> African price. However,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> producers <str<strong>on</strong>g>of</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> sub-regi<strong>on</strong> such as Benin, Burkina<br />
Faso and Chad and for <str<strong>on</strong>g>the</str<strong>on</strong>g> qualities <str<strong>on</strong>g>of</str<strong>on</strong>g> similar cott<strong>on</strong> received 51 and 54% <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
90
<str<strong>on</strong>g>the</str<strong>on</strong>g> world price <strong>on</strong> average over <str<strong>on</strong>g>the</str<strong>on</strong>g> period 1989/1993 (see table). This<br />
indicates a high level <str<strong>on</strong>g>of</str<strong>on</strong>g> explicit taxati<strong>on</strong> <strong>on</strong> Malian producers compared to<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>ir peers <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> above countries. This is due (apart from Benin, a coastal<br />
country) to <str<strong>on</strong>g>the</str<strong>on</strong>g> high levy <strong>on</strong> cott<strong>on</strong>, which is a real tax resource, and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
unsatisfactory management <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> sector, especially by <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT.<br />
V. POLICIES DESIGNED TO SUPPORT THE COTTON INDUSTRY<br />
These are measures that are designed to support nati<strong>on</strong>al producti<strong>on</strong>. They are<br />
measures taken at <str<strong>on</strong>g>the</str<strong>on</strong>g> borders i.e. through customs duties and internal support<br />
measures. Like o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries, we have resorted to a combinati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> two<br />
types <str<strong>on</strong>g>of</str<strong>on</strong>g> measures in Mali.<br />
1. Internal Support: latest and expected developments<br />
i. Research, Training and Extensi<strong>on</strong><br />
The cott<strong>on</strong> research programme is governed by <str<strong>on</strong>g>the</str<strong>on</strong>g> IER-CMDT Protocol,<br />
which is in <str<strong>on</strong>g>the</str<strong>on</strong>g> annex <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>tract-plan. According to <str<strong>on</strong>g>the</str<strong>on</strong>g> provisi<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
protocol regarding cott<strong>on</strong>, research-development is c<strong>on</strong>ducted in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
following areas:<br />
• Selecti<strong>on</strong> and improvement <str<strong>on</strong>g>of</str<strong>on</strong>g> varieties<br />
• Agr<strong>on</strong>omy and farming techniques<br />
• Fight against pests and devising protecti<strong>on</strong> techniques related to it<br />
Pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>al training c<strong>on</strong>cerns target groups:<br />
• The village technical teams that undergo training each in a specific<br />
discipline<br />
• Farming: producers are trained <strong>on</strong> technical <str<strong>on</strong>g>the</str<strong>on</strong>g>mes <str<strong>on</strong>g>of</str<strong>on</strong>g> general<br />
importance<br />
• Resource pers<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers’ organizati<strong>on</strong>s i.e. <str<strong>on</strong>g>of</str<strong>on</strong>g>ficials <str<strong>on</strong>g>of</str<strong>on</strong>g> village<br />
associati<strong>on</strong>s, groupings, socio-pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>al associati<strong>on</strong>s managing<br />
women’s groupings<br />
• Rural craftsmen and partners nominated by <str<strong>on</strong>g>the</str<strong>on</strong>g> village for<br />
specializati<strong>on</strong> in a specific area.<br />
91
ii. Investment Policy<br />
The investment policy c<strong>on</strong>cerns research, training, extensi<strong>on</strong>, credit, real<br />
estate, processing, rural engineering and transport.<br />
iii. State Subsidies for <str<strong>on</strong>g>the</str<strong>on</strong>g> Sector<br />
In return for <str<strong>on</strong>g>the</str<strong>on</strong>g>se missi<strong>on</strong>s, <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT receives farming subsidies from<br />
government and aid agencies. In c<strong>on</strong>necti<strong>on</strong> with <str<strong>on</strong>g>the</str<strong>on</strong>g> reducti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> tax<br />
exempti<strong>on</strong>s outlined in <str<strong>on</strong>g>the</str<strong>on</strong>g> SAP (Structural Adjustment Programme), <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
current trend is <str<strong>on</strong>g>the</str<strong>on</strong>g> gradual return <str<strong>on</strong>g>of</str<strong>on</strong>g> certain links <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> sector to general law<br />
because <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> 1 st April 2000 reform <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> General Tax Code. They are<br />
mainly <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT and <str<strong>on</strong>g>the</str<strong>on</strong>g> BNDA, apart from <str<strong>on</strong>g>the</str<strong>on</strong>g> current grace period<br />
granted to <str<strong>on</strong>g>the</str<strong>on</strong>g> latter for some taxes because <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> crisis.<br />
As for <str<strong>on</strong>g>the</str<strong>on</strong>g> BNDA, which is ex<strong>on</strong>erated from Service Tax (TPS), <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
agricultural credit is charged because <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> new tax <strong>on</strong> financial activities<br />
(TAF) at a rate <str<strong>on</strong>g>of</str<strong>on</strong>g> 15%. Because <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> high indebtedness and <str<strong>on</strong>g>the</str<strong>on</strong>g> low income<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> producers, it is advisable to fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r reflect <strong>on</strong> ways and means <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
increasing <str<strong>on</strong>g>the</str<strong>on</strong>g> solvency <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers (rescheduling, settlement <str<strong>on</strong>g>of</str<strong>on</strong>g> arrears by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
government or all o<str<strong>on</strong>g>the</str<strong>on</strong>g>r partners, increase in producer prices, etc). The<br />
mechanism <str<strong>on</strong>g>of</str<strong>on</strong>g> fixing prices guaranteed for producers through <str<strong>on</strong>g>the</str<strong>on</strong>g> floor price<br />
system although it is problematic nowadays because <str<strong>on</strong>g>of</str<strong>on</strong>g> depleti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
stabilizati<strong>on</strong> fund (replaced with reserves because <str<strong>on</strong>g>of</str<strong>on</strong>g> price fluctuati<strong>on</strong>) would<br />
be an indicati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> a support measure <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> (orange type) not notified to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
WTO despite denial by <str<strong>on</strong>g>the</str<strong>on</strong>g> farmers.<br />
iv. Internal Taxati<strong>on</strong><br />
The excepti<strong>on</strong>al regime enjoyed by <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector is crumbling in <str<strong>on</strong>g>the</str<strong>on</strong>g> face<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> general law regime, which is making a come back because <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
<strong>on</strong>going ec<strong>on</strong>omic reforms. This trend is also noticeable in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> sub-regi<strong>on</strong> (Burkina Faso and Benin).<br />
CMDT is not entitled to Temporary Importati<strong>on</strong>; it is <str<strong>on</strong>g>the</str<strong>on</strong>g>refore at a<br />
disadvantage compared to o<str<strong>on</strong>g>the</str<strong>on</strong>g>r cott<strong>on</strong> producers. Fur<str<strong>on</strong>g>the</str<strong>on</strong>g>rmore, <str<strong>on</strong>g>the</str<strong>on</strong>g> special<br />
tax was a burden <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> agricultural account <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT until <str<strong>on</strong>g>the</str<strong>on</strong>g> 2001<br />
crisis. Add to this registrati<strong>on</strong> and service fees for taxes, which stands at 2<br />
billi<strong>on</strong> CFA francs. As for new investments <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT, <str<strong>on</strong>g>the</str<strong>on</strong>g>y are<br />
c<strong>on</strong>sidered extensi<strong>on</strong>s; <str<strong>on</strong>g>the</str<strong>on</strong>g>refore it does not enjoy <str<strong>on</strong>g>the</str<strong>on</strong>g> privileges <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Investment Code. However, <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT is granted a grace period for some<br />
taxes in a bid to help it overcome <str<strong>on</strong>g>the</str<strong>on</strong>g> crisis.<br />
92
2. Support at <str<strong>on</strong>g>the</str<strong>on</strong>g> Borders<br />
It is a special type <str<strong>on</strong>g>of</str<strong>on</strong>g> taxati<strong>on</strong> i.e. in Mali <str<strong>on</strong>g>the</str<strong>on</strong>g>re is no support mechanism such<br />
as export subsidies for <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector. With this type <str<strong>on</strong>g>of</str<strong>on</strong>g> taxati<strong>on</strong>, custom<br />
duty is levied <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> value <str<strong>on</strong>g>of</str<strong>on</strong>g> goods that come through land borders. Three<br />
types <str<strong>on</strong>g>of</str<strong>on</strong>g> duty were levied i.e. (DD) custom duty, (DFI) importati<strong>on</strong> tax, (PCS)<br />
community solidarity levy. When <str<strong>on</strong>g>the</str<strong>on</strong>g> (TEC) comm<strong>on</strong> external tariff came<br />
into force, <str<strong>on</strong>g>the</str<strong>on</strong>g> DD and <str<strong>on</strong>g>the</str<strong>on</strong>g> DFI rates were merged and goods were grouped in<br />
four categories: category 0 (medicines and school stati<strong>on</strong>ery), category 1 (raw<br />
materials and capital goods), category 2 (intermediary goods and inputs) and<br />
category 3 (c<strong>on</strong>sumer goods).<br />
On 1 st January 1999, merged rates were 0,5,10, and 25% respectively. They<br />
were later fixed at 0,5,10, and 20%. The c<strong>on</strong>tract-plan stipulates that <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
government shall handle taxati<strong>on</strong> regarding rural development and shall apply<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> general law <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> inputs sub-sector, which <str<strong>on</strong>g>the</str<strong>on</strong>g> government has<br />
undertaken to favour as far as taxati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> finished products, raw materials and<br />
spare parts is c<strong>on</strong>cerned. The fact that <str<strong>on</strong>g>the</str<strong>on</strong>g> reform maintains exempti<strong>on</strong> from<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> VAT granted <strong>on</strong> cott<strong>on</strong> seeds, fertilizers, agricultural insecticides,<br />
fungicides, herbicides and agricultural equipment is a testim<strong>on</strong>y to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
government’s commitment. The taxati<strong>on</strong> is neutral because <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly change is<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> replacement <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> CPS at <str<strong>on</strong>g>the</str<strong>on</strong>g> rate <str<strong>on</strong>g>of</str<strong>on</strong>g> 5% with <str<strong>on</strong>g>the</str<strong>on</strong>g> ISCP at <str<strong>on</strong>g>the</str<strong>on</strong>g> rate <str<strong>on</strong>g>of</str<strong>on</strong>g> 5%.<br />
The reform also had something to do with <str<strong>on</strong>g>the</str<strong>on</strong>g> 3% tax increase <strong>on</strong> cott<strong>on</strong><br />
seeds (except seedlings), oil products (oil, soap, fodder) and textile because<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> VAT rate rose from 15% to 18%. It should also be noted that <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
implementati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> TEC brought about greater tax pressure <strong>on</strong> inputs and<br />
category 1 equipment that come from n<strong>on</strong> UEMOA countries (rising from 6%<br />
to more than 11%).<br />
Table 6. Changes in VAT, CPS and ISCP<br />
Local sales – Imports (Percent)<br />
Products Before 1st April 1999 Since 1st April 2000<br />
TVA CPS TVA CPS<br />
Fertlizers Exo 5 Exo 5<br />
Insecticides, Pesticides, fungicides<br />
and o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs<br />
Exo 5 Exo 5<br />
Agricultural Equipment Exo 5 Exo 5<br />
Cott<strong>on</strong> seeds Exo n/a<br />
Crop seeds Exo Exo Exo 5<br />
Cott<strong>on</strong> seeds – o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs 15 5 18 n/a<br />
Cott<strong>on</strong> fibre 10 5 Exo n/a<br />
Oil Products 15 Exo 18 n/a<br />
Textiles Products 15 Exo 18 n/a<br />
Source: Fiscal potential <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> sector, Working paper (revised versi<strong>on</strong>), PAMORI, July 2000<br />
93
VI. INTERNATIONAL COMPETITIVENESS AND EFFECTS OF<br />
SUBSIDY POLICIES OF AFFLUENT COUNTRIES ON THE<br />
COTTON SECTORS OF AFRICA<br />
Dwindling cott<strong>on</strong> prices in <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market is reducing milli<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
African producers, whose major income is linked to this crop al<strong>on</strong>e, to<br />
increasing poverty. It is compounded by <str<strong>on</strong>g>the</str<strong>on</strong>g> adverse effects <str<strong>on</strong>g>of</str<strong>on</strong>g> dumping,<br />
which is practiced by affluent cott<strong>on</strong> producing countries, particularly <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
United States.<br />
Because <str<strong>on</strong>g>of</str<strong>on</strong>g> subsidies, producer prices in <str<strong>on</strong>g>the</str<strong>on</strong>g> United States and <str<strong>on</strong>g>the</str<strong>on</strong>g> European<br />
Uni<strong>on</strong> were respectively higher by 90% and 154% than <str<strong>on</strong>g>the</str<strong>on</strong>g> world price in<br />
2001/2000. This has a direct impact <strong>on</strong> cott<strong>on</strong> producti<strong>on</strong> in such countries.<br />
Owing to <str<strong>on</strong>g>the</str<strong>on</strong>g> subsidy and <str<strong>on</strong>g>the</str<strong>on</strong>g> price <str<strong>on</strong>g>of</str<strong>on</strong>g>fered for cott<strong>on</strong>, cott<strong>on</strong> producti<strong>on</strong> has<br />
increased in <str<strong>on</strong>g>the</str<strong>on</strong>g> United States, thus cott<strong>on</strong> became more pr<str<strong>on</strong>g>of</str<strong>on</strong>g>itable than soya,<br />
corn or sorghum. Equally in Europe, because <str<strong>on</strong>g>of</str<strong>on</strong>g> US$ 700 milli<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> subsidies<br />
granted as part <str<strong>on</strong>g>of</str<strong>on</strong>g> PAC, <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> seed in Greece and Spain<br />
increased sharply (OXFAM, 204, No.58).<br />
Because <str<strong>on</strong>g>of</str<strong>on</strong>g> this policy <str<strong>on</strong>g>of</str<strong>on</strong>g> affluent countries, losses incurred by African<br />
countries are estimated at US$ 250 milli<strong>on</strong>. In <str<strong>on</strong>g>the</str<strong>on</strong>g> face <str<strong>on</strong>g>of</str<strong>on</strong>g> such an alarming<br />
situati<strong>on</strong> for <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omies <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir countries, <str<strong>on</strong>g>the</str<strong>on</strong>g> governments <str<strong>on</strong>g>of</str<strong>on</strong>g> Benin,<br />
Burkina Faso, Mali and Chad subscribed, with <str<strong>on</strong>g>the</str<strong>on</strong>g> support <str<strong>on</strong>g>of</str<strong>on</strong>g> some NGOs<br />
(OXFAM), to <str<strong>on</strong>g>the</str<strong>on</strong>g> noti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> removing subsidies during <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO ministerial<br />
c<strong>on</strong>ference in Cancun in September 2003. They also demanded reparati<strong>on</strong>s<br />
for <str<strong>on</strong>g>the</str<strong>on</strong>g> harm caused <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir ec<strong>on</strong>omies. These c<strong>on</strong>cerns were not shared by<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> United States, which suggested African countries diversify <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
producti<strong>on</strong>. However, <str<strong>on</strong>g>the</str<strong>on</strong>g>y are very good at cott<strong>on</strong> cultivati<strong>on</strong>, whose prices<br />
could have been very competitive had it not been for <str<strong>on</strong>g>the</str<strong>on</strong>g> subsidies. Despite<br />
all this, <str<strong>on</strong>g>the</str<strong>on</strong>g>y provide for milli<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> people who are <str<strong>on</strong>g>the</str<strong>on</strong>g> poorest am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
poor.<br />
The Europeans do not share <str<strong>on</strong>g>the</str<strong>on</strong>g> view <str<strong>on</strong>g>of</str<strong>on</strong>g> removing subsidies. They believe<br />
that, unlike <str<strong>on</strong>g>the</str<strong>on</strong>g> United States, <str<strong>on</strong>g>the</str<strong>on</strong>g> EU is a minor player in terms <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
producti<strong>on</strong>, which accounts for <strong>on</strong>ly 2% <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong>. C<strong>on</strong>sequently,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> EU’s influence <strong>on</strong> price formati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market is marginal.<br />
However, in terms <str<strong>on</strong>g>of</str<strong>on</strong>g> volume, <str<strong>on</strong>g>the</str<strong>on</strong>g> EU’s producti<strong>on</strong> accounts for 70% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
exports <str<strong>on</strong>g>of</str<strong>on</strong>g> West and Central Africa. Since it acknowledges that <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong><br />
issue is vital for African countries, <str<strong>on</strong>g>the</str<strong>on</strong>g> European Uni<strong>on</strong> supports ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
idea <str<strong>on</strong>g>of</str<strong>on</strong>g> a partnership with Africa, which would seek to provide full, structural<br />
and sustainable support for <str<strong>on</strong>g>the</str<strong>on</strong>g> development <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector.<br />
94
The proposed partnership has two objectives:<br />
• Secure fairer trade c<strong>on</strong>diti<strong>on</strong>s in <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market for cott<strong>on</strong><br />
• Support for cott<strong>on</strong> producing regi<strong>on</strong>s and countries <str<strong>on</strong>g>of</str<strong>on</strong>g> Africa<br />
VII. PROSPECTS OF MAINTAINING AND ENHANCING COTTON<br />
SECTORS IN AFRICA<br />
The importance <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> for both <str<strong>on</strong>g>the</str<strong>on</strong>g> people and <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omies<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> West and Central Africa cannot be overemphasized. The producti<strong>on</strong>,<br />
however, depends <strong>on</strong> many envir<strong>on</strong>mental factors, various resources and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
commitment <str<strong>on</strong>g>of</str<strong>on</strong>g> all <str<strong>on</strong>g>the</str<strong>on</strong>g> players, who should arrive at a c<strong>on</strong>sensus because <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>ir divergent interests. In order to render <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> sustainable, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
following acti<strong>on</strong>s should be streng<str<strong>on</strong>g>the</str<strong>on</strong>g>ned and/or envisaged:<br />
• Maintain and enhance <str<strong>on</strong>g>the</str<strong>on</strong>g> productive potential<br />
• Pursue technical innovati<strong>on</strong>s that would help sustain producti<strong>on</strong> in<br />
viable ec<strong>on</strong>omic c<strong>on</strong>diti<strong>on</strong>s. This requires that researchers be<br />
provided with greater and adequate resources<br />
• Permanent c<strong>on</strong>sultati<strong>on</strong> between all <str<strong>on</strong>g>the</str<strong>on</strong>g> players <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> sector so as to<br />
share informati<strong>on</strong> and harm<strong>on</strong>ise interests, which are <str<strong>on</strong>g>of</str<strong>on</strong>g>ten divergent<br />
• Reverse <str<strong>on</strong>g>the</str<strong>on</strong>g> recent decline in farm yield in several countries and<br />
abridge <str<strong>on</strong>g>the</str<strong>on</strong>g> productivity gaps in <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong>. This requires greater<br />
investment incentives in improved technologies and efficient inputs<br />
distributi<strong>on</strong> systems<br />
• Increase <str<strong>on</strong>g>the</str<strong>on</strong>g> efficiency <str<strong>on</strong>g>of</str<strong>on</strong>g> ginning sectors by bringing in new players<br />
into <str<strong>on</strong>g>the</str<strong>on</strong>g> sector so as to make good use <str<strong>on</strong>g>of</str<strong>on</strong>g> this activity. The objective<br />
in so doing is to scale down <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> fibre<br />
• Process a greater part <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> local produce by developing <str<strong>on</strong>g>the</str<strong>on</strong>g> textile<br />
industry and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r sub-sectors<br />
• Refocus <strong>on</strong> major activities <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> sector<br />
• Build <str<strong>on</strong>g>the</str<strong>on</strong>g> capacity <str<strong>on</strong>g>of</str<strong>on</strong>g> players, particularly producers, who should<br />
fully participate in <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> process<br />
• Pursue <str<strong>on</strong>g>the</str<strong>on</strong>g> transfer <str<strong>on</strong>g>of</str<strong>on</strong>g> skills in c<strong>on</strong>necti<strong>on</strong> with <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>going<br />
restructuring and privatizati<strong>on</strong> exercises in <str<strong>on</strong>g>the</str<strong>on</strong>g> various countries<br />
All this should be d<strong>on</strong>e without any adverse effect <strong>on</strong> producti<strong>on</strong> and in<br />
harm<strong>on</strong>y, as so<strong>on</strong> as possible, with <str<strong>on</strong>g>the</str<strong>on</strong>g> instituti<strong>on</strong>al development <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
existing cott<strong>on</strong> sectors. The form <str<strong>on</strong>g>of</str<strong>on</strong>g> organizati<strong>on</strong> to promote and <str<strong>on</strong>g>the</str<strong>on</strong>g> type <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
reform to introduce in <str<strong>on</strong>g>the</str<strong>on</strong>g> sectors can be assessed through <str<strong>on</strong>g>the</str<strong>on</strong>g> Regi<strong>on</strong>al<br />
95
M<strong>on</strong>itoring Mechanism for Cott<strong>on</strong> Sectors in Sub-Saharan Africa (Resocot),<br />
whose pilot phase ended in July 2003. Indeed, it helped to develop a method<br />
and tools that shaped modes <str<strong>on</strong>g>of</str<strong>on</strong>g> organizati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector. This tool<br />
was devised and applied in line with a comm<strong>on</strong> grid <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sectors <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
six countries (Mali, Benin, Burkina Faso, Cote d’Ivoire, Camero<strong>on</strong> and<br />
Ghana). It has helped to assess performance and <str<strong>on</strong>g>the</str<strong>on</strong>g> progress made.<br />
The relati<strong>on</strong> between forms <str<strong>on</strong>g>of</str<strong>on</strong>g> organizati<strong>on</strong> and performance has so far<br />
depended <strong>on</strong> a basis <str<strong>on</strong>g>of</str<strong>on</strong>g> informati<strong>on</strong> that is extremely weak. Comparis<strong>on</strong> was<br />
limited mainly to <str<strong>on</strong>g>the</str<strong>on</strong>g> FOB price percentage (free <strong>on</strong> board) received by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
producers in various countries.<br />
At <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al level, <str<strong>on</strong>g>the</str<strong>on</strong>g> collective acti<strong>on</strong> initiated by West and Central<br />
African countries in Cancun should be pursued. The support and vigilance <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
NGOs and civil societies will be most welcome so that <str<strong>on</strong>g>the</str<strong>on</strong>g> United States<br />
would not compel governments <str<strong>on</strong>g>of</str<strong>on</strong>g> West and Central Africa to aband<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
claims for an urgent reform <str<strong>on</strong>g>of</str<strong>on</strong>g> agricultural subsidies. This would help <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
United States to leave <str<strong>on</strong>g>the</str<strong>on</strong>g>ir subsidies intact, and would help <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO water<br />
down an embarrassing and apparently unsolvable issue <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> negotiati<strong>on</strong>s<br />
<strong>on</strong> agriculture. (OXFAM, 58).<br />
96
Appendix 2<br />
ENHANCING PRODUCTION EFFICIENCY AND INTERNATIONAL<br />
COMPETITIVENESS In IDB COTTON PRODUCING MEMBER<br />
COUNRIES FROM THE ASIA REGION<br />
Zahoor Ahmad<br />
I. INTRODUCTION<br />
Cott<strong>on</strong> is <str<strong>on</strong>g>the</str<strong>on</strong>g> most important cash crop <str<strong>on</strong>g>of</str<strong>on</strong>g> many <strong>Islamic</strong> <strong>Development</strong> Bank<br />
(IDB) member countries in Asia particularly Pakistan, Uzbekistan and Syria.<br />
The Asian member countries <str<strong>on</strong>g>of</str<strong>on</strong>g> IDB share about 18 percent <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world total<br />
area and producti<strong>on</strong>.(Table-1). Cott<strong>on</strong> is a major part <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> GDB growth rate.<br />
Cott<strong>on</strong> producti<strong>on</strong> not <strong>on</strong>ly affects <str<strong>on</strong>g>the</str<strong>on</strong>g> GDB growth rate but it also influences<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> countries balance <str<strong>on</strong>g>of</str<strong>on</strong>g> payments. The cott<strong>on</strong> crop is also <str<strong>on</strong>g>the</str<strong>on</strong>g> major<br />
employer <str<strong>on</strong>g>of</str<strong>on</strong>g> industrial and rural labour in <str<strong>on</strong>g>the</str<strong>on</strong>g>se countries. Major cott<strong>on</strong><br />
producing countries like Pakistan have been affected in textile trade through<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> imposing <str<strong>on</strong>g>of</str<strong>on</strong>g> a quota system. Where as n<strong>on</strong>-cott<strong>on</strong> producing countries<br />
like Bangladesh have been exempted from such restricti<strong>on</strong>s and have made<br />
tremendous growth in textile exports. Cott<strong>on</strong> has become <str<strong>on</strong>g>the</str<strong>on</strong>g> major foreign<br />
exchange earner. With <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO agreement <str<strong>on</strong>g>the</str<strong>on</strong>g>se restricti<strong>on</strong>s will be lifted in<br />
January, 2005 and countries like Pakistan benefit because <str<strong>on</strong>g>the</str<strong>on</strong>g>y are not <strong>on</strong>ly<br />
cott<strong>on</strong> producers but also major cott<strong>on</strong> c<strong>on</strong>sumers and fabric producers.<br />
With <str<strong>on</strong>g>the</str<strong>on</strong>g> enactment <str<strong>on</strong>g>of</str<strong>on</strong>g> WTO quality will be a big problem for many countries<br />
where c<strong>on</strong>taminati<strong>on</strong> has discounted <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al prices. These countries<br />
have to produce quality cott<strong>on</strong> to compete in <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al trade. The<br />
ginning industry has to be improved in countries like Pakistan, Uzbekistan<br />
and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r central Asian countries to produce quality cott<strong>on</strong>. The enactment <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
WTO will be a blessing for <str<strong>on</strong>g>the</str<strong>on</strong>g>se countries because <str<strong>on</strong>g>the</str<strong>on</strong>g>ir cott<strong>on</strong> quality will<br />
improve and <str<strong>on</strong>g>the</str<strong>on</strong>g>y will be able to compete in <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market in<br />
January, 2005. IDB member countries have a good opportunity to improve<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>ir producti<strong>on</strong>. The yield per hectare can be increased in countries like<br />
Pakistan by following proper producti<strong>on</strong> practices, implementing an<br />
Integrated Pest Management (IPM) programme and producing c<strong>on</strong>taminati<strong>on</strong><br />
free cott<strong>on</strong>. Pakistan probably can improve yield per hectare to almost 50<br />
percent because in 1990 and 1991 <str<strong>on</strong>g>the</str<strong>on</strong>g> yield per hectare was 615 and 768 kg<br />
per hectare respectively, whereas in Punjab province <str<strong>on</strong>g>the</str<strong>on</strong>g> achievement was<br />
97
848 kg per hectare from 2.5 milli<strong>on</strong> hectares. The judicious use <str<strong>on</strong>g>of</str<strong>on</strong>g> water,<br />
fertilizers and pesticides will help to increase yield per hectare.<br />
Recently a break through has been made in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> breeding programme<br />
by developing Bt-cott<strong>on</strong> resistant to a boll worm attack. Bt-cott<strong>on</strong> is sold in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market as Bollgard and Ingard having resistant genes. This<br />
will reduce <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> and will increase <str<strong>on</strong>g>the</str<strong>on</strong>g> income <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers. In<br />
major developed countries like <str<strong>on</strong>g>the</str<strong>on</strong>g> USA, China, Australia, South Africa,<br />
Brazil and India, <str<strong>on</strong>g>the</str<strong>on</strong>g> area under Bt cott<strong>on</strong> cultivati<strong>on</strong> is increasing. This<br />
programme is far behind in IDB member countries in Asian regi<strong>on</strong>. With an<br />
increase in populati<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> pressure to develop more <str<strong>on</strong>g>the</str<strong>on</strong>g> food crops is<br />
growing because markets are in favour <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>se crops. The competiti<strong>on</strong> for<br />
land, labour o<str<strong>on</strong>g>the</str<strong>on</strong>g>r inputs and <str<strong>on</strong>g>the</str<strong>on</strong>g> rising producti<strong>on</strong> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> have not<br />
been matched by increased prices. Cott<strong>on</strong> producti<strong>on</strong> will depend largely <strong>on</strong><br />
developing appropriate technology that encompasses biological envir<strong>on</strong>ment,<br />
and social ec<strong>on</strong>omic dimensi<strong>on</strong>s to ensure sustainable producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> fibre that<br />
is competitive in quality and price with alternatives. Achievements <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>se<br />
objectives will depend <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> development and distributi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> varieties with a<br />
satisfactory yield potential and fibre characteristics that meet <str<strong>on</strong>g>the</str<strong>on</strong>g> needs <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
new developments in <str<strong>on</strong>g>the</str<strong>on</strong>g> textile industry.<br />
II. MAJOR CHALLENGES TO IDB COTTON PRODUCING<br />
COUNTRIES FORM THE ASIAN REGION<br />
The importance <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al ec<strong>on</strong>omy will remain at a priority<br />
level because it involves a major labour force at both <str<strong>on</strong>g>the</str<strong>on</strong>g> industrial and rural<br />
levels, a major part <str<strong>on</strong>g>of</str<strong>on</strong>g> export earning and it’s <str<strong>on</strong>g>the</str<strong>on</strong>g> main source <str<strong>on</strong>g>of</str<strong>on</strong>g> raw material<br />
for textile, edible oil and animal feed. Hence <str<strong>on</strong>g>the</str<strong>on</strong>g> governments <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>se<br />
countries are trying to improve cott<strong>on</strong> producti<strong>on</strong>. The cott<strong>on</strong> crop has been<br />
affected by <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> leaf curl virus in Pakistan and out breaks <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong><br />
pests in many countries. Pesticide resistance in pests is increasing adding to<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong>. The quality <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> and its marketing needs special<br />
attenti<strong>on</strong>. All <str<strong>on</strong>g>the</str<strong>on</strong>g>se factors are discussed below:<br />
1. Cott<strong>on</strong> Producti<strong>on</strong><br />
i. Cott<strong>on</strong> Leaf Curl Disease<br />
Cott<strong>on</strong> Leaf Curl Disease is caused by a Geminii group <str<strong>on</strong>g>of</str<strong>on</strong>g> viruses transmitted<br />
by <str<strong>on</strong>g>the</str<strong>on</strong>g> whitefly (Bemesia tabaci). Since 1988 cott<strong>on</strong> leaf curl virus has been<br />
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increasing and damaging c<strong>on</strong>siderable cott<strong>on</strong> crop areas in Pakistan. In <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
1992 crop seas<strong>on</strong> about 300,000 acres were completely damaged by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
cott<strong>on</strong> leaf curl virus. In <str<strong>on</strong>g>the</str<strong>on</strong>g> 1993 crop seas<strong>on</strong> it was estimated that more than<br />
500,000 acres were completely damaged by this disease whereas milli<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
acres were partially affected. At present, <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> leaf curl virus has become<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> key problem in cott<strong>on</strong> producti<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> present decline in producti<strong>on</strong> is<br />
highly related to <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> leaf curl virus. Since 1988, Pakistan has lost more<br />
than US $1.5 billi<strong>on</strong> <strong>on</strong> raw cott<strong>on</strong> al<strong>on</strong>e. The ultimate soluti<strong>on</strong> lies in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
evoluti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> resistant varieties to <str<strong>on</strong>g>the</str<strong>on</strong>g> virus and management <str<strong>on</strong>g>of</str<strong>on</strong>g> whitefly.<br />
ii. Genetic Engineering<br />
Latest techniques <str<strong>on</strong>g>of</str<strong>on</strong>g> genetic engineering to introduce new desirable<br />
characters in <str<strong>on</strong>g>the</str<strong>on</strong>g> cultivars are yet in <str<strong>on</strong>g>the</str<strong>on</strong>g> developmental stage in most IDB<br />
member countries in Asia and it has to be streng<str<strong>on</strong>g>the</str<strong>on</strong>g>ned. These are urgently<br />
required for introducing characters like Cott<strong>on</strong> Leaf Curl Virus resistance and<br />
o<str<strong>on</strong>g>the</str<strong>on</strong>g>r desirable traits which cannot be handled by traditi<strong>on</strong>al hybridizati<strong>on</strong><br />
programme. This development has to be taken as a challenge by <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong><br />
breeders/biotechnologists.<br />
iii. Management <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Insect Pests<br />
Management <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Insect Pests is a major challenge for <str<strong>on</strong>g>the</str<strong>on</strong>g> sustainability<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> crop. The following aspects will need emphasizes in this<br />
c<strong>on</strong>necti<strong>on</strong>.<br />
Selective use <str<strong>on</strong>g>of</str<strong>on</strong>g> pesticides - Chemical pesticides will remain <str<strong>on</strong>g>the</str<strong>on</strong>g> most useful<br />
and powerful tool for <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>trol <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> pests. However, many problems<br />
like insect resistance, flare ups <str<strong>on</strong>g>of</str<strong>on</strong>g> sec<strong>on</strong>dary pests and reducti<strong>on</strong> in natural<br />
enemies are <str<strong>on</strong>g>the</str<strong>on</strong>g> outcome <str<strong>on</strong>g>of</str<strong>on</strong>g> excessive or indiscriminate use <str<strong>on</strong>g>of</str<strong>on</strong>g> pesticides. It is<br />
extremely important that special attenti<strong>on</strong> should be given to <str<strong>on</strong>g>the</str<strong>on</strong>g> use <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
selective pesticides which are toxic to insect pests but safe to natural enemies.<br />
This will help not <strong>on</strong>ly to c<strong>on</strong>trol <str<strong>on</strong>g>the</str<strong>on</strong>g> target pests but will eliminate <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
chances <str<strong>on</strong>g>of</str<strong>on</strong>g> a resurgence <str<strong>on</strong>g>of</str<strong>on</strong>g> pests like whitefly, aphids, army worm, cott<strong>on</strong><br />
bollworms, etc.<br />
Pesticide resistance management - With <str<strong>on</strong>g>the</str<strong>on</strong>g> increased use <str<strong>on</strong>g>of</str<strong>on</strong>g> pesticides,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>re are indicati<strong>on</strong>s that whitefly and American bollworm have developed<br />
resistance to many insecticides. If necessary measures are not taken for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
management and use <str<strong>on</strong>g>of</str<strong>on</strong>g> pesticides, resistance will increase and it may<br />
become more difficult to c<strong>on</strong>trol pests.<br />
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Spray machinery - Most spray machinery has been designed and<br />
manufactured locally. The machinery is good but spray nozzles and pumps<br />
are defective. There is no c<strong>on</strong>cept <str<strong>on</strong>g>of</str<strong>on</strong>g> droplet size. The quality <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>se<br />
machines has to be improved to increase <str<strong>on</strong>g>the</str<strong>on</strong>g> efficiency <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> spray and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
c<strong>on</strong>trol <str<strong>on</strong>g>of</str<strong>on</strong>g> pest.<br />
Ultra low volume sprays - It has been found that under Pakistan’s hot<br />
c<strong>on</strong>diti<strong>on</strong>s ultra low volume sprays are not very effective and generally result<br />
in <str<strong>on</strong>g>the</str<strong>on</strong>g> flare up <str<strong>on</strong>g>of</str<strong>on</strong>g> whitefly and mites compared to high volume c<strong>on</strong>venti<strong>on</strong>al<br />
sprays. The improvement in applicati<strong>on</strong> technique is necessary to avoid<br />
sec<strong>on</strong>dary pest problems.<br />
iv. Improvement in Fibre Characters<br />
With <str<strong>on</strong>g>the</str<strong>on</strong>g> improvement <str<strong>on</strong>g>of</str<strong>on</strong>g> modern machinery in spinning, cott<strong>on</strong> fibres will<br />
need higher strength. Similarly, improvement has to be made in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
micr<strong>on</strong>aire and uniformity ratio. Strength <str<strong>on</strong>g>of</str<strong>on</strong>g> 100 tppsi and micr<strong>on</strong>aire <str<strong>on</strong>g>of</str<strong>on</strong>g> 4-4.5<br />
with over 50% uniformity ratio may be ideal for future requirements. The<br />
breeding programme will have to be directed to achieve this aim.<br />
v. Cott<strong>on</strong> Picking<br />
Cott<strong>on</strong> seed picking is an emerging problem al<strong>on</strong>g with scarce female labor.<br />
Immediate experiments with mechanical picking are necessary to discover a<br />
feasible alternate way to overcome this difficulty.<br />
vi. Sustainable Cost <str<strong>on</strong>g>of</str<strong>on</strong>g> Producti<strong>on</strong><br />
The high cost <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs is imposing ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r challenge. The soluti<strong>on</strong> will be<br />
mainly in working out <str<strong>on</strong>g>the</str<strong>on</strong>g> most optimum level <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs <str<strong>on</strong>g>of</str<strong>on</strong>g> mechanical<br />
power, fertilizer use, chemical insecticides, etc., to ensure ec<strong>on</strong>omic<br />
sustainability <str<strong>on</strong>g>of</str<strong>on</strong>g> crop producti<strong>on</strong>. Availability <str<strong>on</strong>g>of</str<strong>on</strong>g> easy credit should be a part<br />
and parcel <str<strong>on</strong>g>of</str<strong>on</strong>g> this package. The inputs should be provided at reas<strong>on</strong>able costs.<br />
2. Marketing<br />
i. Ginning<br />
The present ginning machinery, mostly a copy <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> imported centennial<br />
type should be reformed to preserve <str<strong>on</strong>g>the</str<strong>on</strong>g> original fibre characters and to<br />
prepare cott<strong>on</strong> with <str<strong>on</strong>g>the</str<strong>on</strong>g> proper grade suitable for spinners. There is a need to<br />
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undertake research <strong>on</strong> ginning from this stand point. The establishment <str<strong>on</strong>g>of</str<strong>on</strong>g> a<br />
Ginning Research Institute is very desirable to achieve this objective.<br />
ii. Grading<br />
To improve <str<strong>on</strong>g>the</str<strong>on</strong>g> grade <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> government must devise a system to<br />
introduce a grading system with attractive premiums for better grades.<br />
Pakistan Cott<strong>on</strong> Standards Institute at Karachi, established in 1987, has come<br />
up with a grading system that has been accepted by <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market.<br />
It is proposed that <str<strong>on</strong>g>the</str<strong>on</strong>g> government in collaborati<strong>on</strong> with textiles, ginners,<br />
traders and cott<strong>on</strong> growers would arrive at agreed premia and discounts<br />
permissible for various grades and fibre characteristics <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>. Purchases<br />
will be made <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>se grades <str<strong>on</strong>g>of</str<strong>on</strong>g> premia and discounts.<br />
iii. Internati<strong>on</strong>al Trade<br />
Research in marketing is absolutely essential for ensuring <str<strong>on</strong>g>the</str<strong>on</strong>g> proper<br />
marketing <str<strong>on</strong>g>of</str<strong>on</strong>g> produce. This should include items <str<strong>on</strong>g>of</str<strong>on</strong>g> quality demand in main<br />
importing markets, present world viability <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>se qualities, scope <str<strong>on</strong>g>of</str<strong>on</strong>g> valueadded<br />
products and <str<strong>on</strong>g>the</str<strong>on</strong>g>ir internati<strong>on</strong>al demand, diversificati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> market, etc.,<br />
etc. Most <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning is 20 count yarns whereas <str<strong>on</strong>g>the</str<strong>on</strong>g> exporters can get<br />
much higher price if <str<strong>on</strong>g>the</str<strong>on</strong>g> yarn is spun at 30 and 40 counts. Similarly, cott<strong>on</strong><br />
made products <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan are selling very cheaply in <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market<br />
whereas <str<strong>on</strong>g>the</str<strong>on</strong>g> same products made in Korea and China are selling at almost 10<br />
times <str<strong>on</strong>g>the</str<strong>on</strong>g> Pakistan price.<br />
iv. Taxati<strong>on</strong> Policies<br />
The regulati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> lint prices through <str<strong>on</strong>g>the</str<strong>on</strong>g> export duty <str<strong>on</strong>g>of</str<strong>on</strong>g> lint and yarn should<br />
be so designed that <str<strong>on</strong>g>the</str<strong>on</strong>g> Textile Sector does not earn at <str<strong>on</strong>g>the</str<strong>on</strong>g> same cost <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
grower or <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>. It should ensure equitable returns to <str<strong>on</strong>g>the</str<strong>on</strong>g> grower and<br />
should encourage <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> quality cott<strong>on</strong>.<br />
3. Challenges to Textile Industry<br />
Cott<strong>on</strong> prices are linked to supply al<strong>on</strong>e with no regard for quality and<br />
internati<strong>on</strong>al linkage. Hence <str<strong>on</strong>g>the</str<strong>on</strong>g> level <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> determines <str<strong>on</strong>g>the</str<strong>on</strong>g> price <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
cott<strong>on</strong>. Fluctuati<strong>on</strong>s in producti<strong>on</strong> (which are natural) create violent price<br />
fluctuati<strong>on</strong>s to <str<strong>on</strong>g>the</str<strong>on</strong>g> detriment <str<strong>on</strong>g>of</str<strong>on</strong>g> ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r <str<strong>on</strong>g>the</str<strong>on</strong>g> growers or <str<strong>on</strong>g>the</str<strong>on</strong>g> industry. Falling<br />
internati<strong>on</strong>al prices and poor quality in domestic cott<strong>on</strong>s make exports un-<br />
101
competitive. Local industry is geared for low quality cott<strong>on</strong> and cannot<br />
sustain quality premiums.<br />
• Cott<strong>on</strong> arrivals are c<strong>on</strong>centrated in three m<strong>on</strong>ths but c<strong>on</strong>sumpti<strong>on</strong> is year<br />
l<strong>on</strong>g. The absence <str<strong>on</strong>g>of</str<strong>on</strong>g> forward trading and hedge markets adds to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
volatility <str<strong>on</strong>g>of</str<strong>on</strong>g> prices, and makes markets susceptible to manipulati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
hands <str<strong>on</strong>g>of</str<strong>on</strong>g> those who have access to liquidity.<br />
• Middle markets are virtually n<strong>on</strong>-existent. Ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r <str<strong>on</strong>g>the</str<strong>on</strong>g> ginners or <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
spinners have to carry stocks, distracting <str<strong>on</strong>g>the</str<strong>on</strong>g>ir cash flows from <str<strong>on</strong>g>the</str<strong>on</strong>g>ir main<br />
line <str<strong>on</strong>g>of</str<strong>on</strong>g> business and increasing <str<strong>on</strong>g>the</str<strong>on</strong>g>ir inventory costs.<br />
• The majority <str<strong>on</strong>g>of</str<strong>on</strong>g> growers are small and cannot afford to market <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
cott<strong>on</strong> lint and seed separately after c<strong>on</strong>tract ginning. Ginners have to<br />
operate as processors and traders c<strong>on</strong>currently, giving <str<strong>on</strong>g>the</str<strong>on</strong>g>m a<br />
manipulative advantage <strong>on</strong> <strong>on</strong>e hand and a handicap <str<strong>on</strong>g>of</str<strong>on</strong>g> risk <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r,<br />
especially in <str<strong>on</strong>g>the</str<strong>on</strong>g> absence <str<strong>on</strong>g>of</str<strong>on</strong>g> a hedge market. With a large number <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
small, uneducated growers it is difficult to manage quality since many<br />
intermediary marketing agents are involved from <str<strong>on</strong>g>the</str<strong>on</strong>g> farm to <str<strong>on</strong>g>the</str<strong>on</strong>g> ginning<br />
factory. This factor exaggerates quality deteriorati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> absence <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
strict regulati<strong>on</strong>s and price sensitivity to quality.<br />
• Ginners have a limited capacity to hold cott<strong>on</strong> – 1.5 milli<strong>on</strong> bales at most<br />
at <strong>on</strong>e time. Arrivals far exceed uptake during <str<strong>on</strong>g>the</str<strong>on</strong>g> m<strong>on</strong>ths <str<strong>on</strong>g>of</str<strong>on</strong>g> November<br />
to January by at least <strong>on</strong>e milli<strong>on</strong> bales per m<strong>on</strong>th. Financing becomes a<br />
limiting factor in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir operati<strong>on</strong>s. Price fluctuati<strong>on</strong>s, especially<br />
downward shifts, fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r reduces <str<strong>on</strong>g>the</str<strong>on</strong>g>ir liquidity and holding capacity.<br />
Therefore <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a need for ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r public sector agency to carry stocks or<br />
private sector warehousing companies.<br />
4. Ginning<br />
• C<strong>on</strong>taminati<strong>on</strong> free, quality cott<strong>on</strong> with proper grading can <strong>on</strong>ly be<br />
achieved at <str<strong>on</strong>g>the</str<strong>on</strong>g> ginning level.<br />
• Liquidity problems <str<strong>on</strong>g>of</str<strong>on</strong>g> ginners must be resolved, specially in <str<strong>on</strong>g>the</str<strong>on</strong>g> years<br />
when <str<strong>on</strong>g>the</str<strong>on</strong>g>re is slow uptake due to low internati<strong>on</strong>al prices and ginners<br />
have to carry large inventories.<br />
• A ginning research institute needs to be setup that provides technological<br />
support to <str<strong>on</strong>g>the</str<strong>on</strong>g> industry to help improve <str<strong>on</strong>g>the</str<strong>on</strong>g>ir efficiency and reduce costs.<br />
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• The establishment <str<strong>on</strong>g>of</str<strong>on</strong>g> ginning standards through amended Provincial<br />
Cott<strong>on</strong> Acts and enforcing <str<strong>on</strong>g>the</str<strong>on</strong>g>m strictly will improve <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
ginned lint.<br />
5. Spinning<br />
Spinning is <str<strong>on</strong>g>the</str<strong>on</strong>g> first process in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> value chain that adds value to cott<strong>on</strong><br />
by c<strong>on</strong>verting it into a new product i.e. c<strong>on</strong>versi<strong>on</strong> from ginned cott<strong>on</strong> into<br />
cott<strong>on</strong> yarn. Since spinning is in <str<strong>on</strong>g>the</str<strong>on</strong>g> beginning <str<strong>on</strong>g>of</str<strong>on</strong>g> value chain, all <str<strong>on</strong>g>the</str<strong>on</strong>g> later<br />
value added processes <str<strong>on</strong>g>of</str<strong>on</strong>g> weaving, knitting, processing, garments and madeups<br />
are dependent up<strong>on</strong> this process. The effect <str<strong>on</strong>g>of</str<strong>on</strong>g> a sub-standard yarn<br />
producti<strong>on</strong> by spinning goes right across <str<strong>on</strong>g>the</str<strong>on</strong>g> entire value chain.<br />
i. Low Unit Price Realizati<strong>on</strong><br />
The average unit price realizati<strong>on</strong> for Pakistani cott<strong>on</strong> yarn in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
internati<strong>on</strong>al market is very low compared to that <str<strong>on</strong>g>of</str<strong>on</strong>g> its competitors. There<br />
are two major reas<strong>on</strong>s for this. First is cott<strong>on</strong> quality. Cott<strong>on</strong> provided by<br />
ginning is c<strong>on</strong>taminated with n<strong>on</strong>-lint comp<strong>on</strong>ents. This results in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>taminated yarn that sells at a lower price. The sec<strong>on</strong>d reas<strong>on</strong><br />
for low unit value realizati<strong>on</strong> is <str<strong>on</strong>g>the</str<strong>on</strong>g> product mix <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistani cott<strong>on</strong> yarn.<br />
More than 70% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> total yarn producti<strong>on</strong> is <str<strong>on</strong>g>of</str<strong>on</strong>g> coarse and medium count<br />
yarns. In yarn exports, this percentage is about 99%. Coarse and medium<br />
counts fetch a lower price compared to fine and super fine counts that<br />
ultimately manifests in low unit value realizati<strong>on</strong>. Moreover, <str<strong>on</strong>g>the</str<strong>on</strong>g> share <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
o<str<strong>on</strong>g>the</str<strong>on</strong>g>r high value added yarns like dyed yarns is also very small in total<br />
exports. There is a need for interventi<strong>on</strong> in this sector by providing incentives<br />
to <str<strong>on</strong>g>the</str<strong>on</strong>g> exporters <str<strong>on</strong>g>of</str<strong>on</strong>g> high value added yarns. These incentives can be in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
form <str<strong>on</strong>g>of</str<strong>on</strong>g> providing export refinancing <strong>on</strong>ly to exporters <str<strong>on</strong>g>of</str<strong>on</strong>g> high value added<br />
yarns.<br />
ii. Lack <str<strong>on</strong>g>of</str<strong>on</strong>g> BMR<br />
The Pakistani Spinning industry showed a high rate <str<strong>on</strong>g>of</str<strong>on</strong>g> growth till 1994 when<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> total number <str<strong>on</strong>g>of</str<strong>on</strong>g> installed spindles reached 8.4 milli<strong>on</strong>. After this period,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>re were successive cott<strong>on</strong> crop failures in <str<strong>on</strong>g>the</str<strong>on</strong>g> country that resulted in an<br />
over-capacity situati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> industry. Many units were closed and <str<strong>on</strong>g>the</str<strong>on</strong>g> total<br />
number <str<strong>on</strong>g>of</str<strong>on</strong>g> spindles in 1999 decreased to 8.3 milli<strong>on</strong>. This situati<strong>on</strong> resulted in<br />
inhibiting <str<strong>on</strong>g>the</str<strong>on</strong>g> flow <str<strong>on</strong>g>of</str<strong>on</strong>g> investment in this sector. This decrease was not limited<br />
to new investment <strong>on</strong>ly but also for BMR investment. Currently a major<br />
porti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning industry requires investment for BMR. The<br />
government should facilitate provisi<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> credit for BMR and <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning<br />
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industry at easy terms. Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r facilitati<strong>on</strong> can be created by providing relief<br />
from import duties <strong>on</strong> machinery for BMR purposes.<br />
iii. Low Capacity Utilizati<strong>on</strong><br />
Currently, <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> 8.3 milli<strong>on</strong> installed spindles, <strong>on</strong>ly 6.6 milli<strong>on</strong> are working<br />
which translates into a capacity utilizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> 79%. The rest <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> spindles<br />
are closed due to variety <str<strong>on</strong>g>of</str<strong>on</strong>g> reas<strong>on</strong>s. There is a need to revive this dead<br />
investment. According to an estimate, <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> total 1.7 milli<strong>on</strong> closed spindles,<br />
about 0.5 milli<strong>on</strong> can be revived.<br />
iv. Low Share <str<strong>on</strong>g>of</str<strong>on</strong>g> Man-made Fibers<br />
In today’s textile world, <str<strong>on</strong>g>the</str<strong>on</strong>g> incremental demand created each year due to<br />
populati<strong>on</strong> growth is being met through manmade fibers, since cott<strong>on</strong><br />
producti<strong>on</strong> is finite. Although <str<strong>on</strong>g>the</str<strong>on</strong>g> Pakistani spinning industry is also moving<br />
in this directi<strong>on</strong>, it is heavily dependent <strong>on</strong> local cott<strong>on</strong>. However, it needs to<br />
increase <str<strong>on</strong>g>the</str<strong>on</strong>g> share <str<strong>on</strong>g>of</str<strong>on</strong>g> manmade fiber yarns in its total producti<strong>on</strong>. Currently,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> spindle utilizati<strong>on</strong> for man-made fibers is 18%, which is much lower than<br />
those <str<strong>on</strong>g>of</str<strong>on</strong>g> its competitors. Moving to manmade fibers will decrease <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
dependence <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning industry <strong>on</strong> cott<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>reby reducing its threat due<br />
to bad cott<strong>on</strong> crop.<br />
One <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> major reas<strong>on</strong>s for <str<strong>on</strong>g>the</str<strong>on</strong>g> low share <str<strong>on</strong>g>of</str<strong>on</strong>g> man-made fiber yarns is <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
protecti<strong>on</strong> given to <str<strong>on</strong>g>the</str<strong>on</strong>g> polyester industry in <str<strong>on</strong>g>the</str<strong>on</strong>g> shape <str<strong>on</strong>g>of</str<strong>on</strong>g> import duties. There<br />
is a need to rati<strong>on</strong>alize this duty structure. Al<strong>on</strong>g with polyester, <str<strong>on</strong>g>the</str<strong>on</strong>g>re are<br />
many fibers that are not produced in Pakistan. Availability <str<strong>on</strong>g>of</str<strong>on</strong>g> such yarns<br />
should also be made easier for <str<strong>on</strong>g>the</str<strong>on</strong>g> industry. Al<strong>on</strong>g with <str<strong>on</strong>g>the</str<strong>on</strong>g> spun blended<br />
yarns, <str<strong>on</strong>g>the</str<strong>on</strong>g> share <str<strong>on</strong>g>of</str<strong>on</strong>g> filament yarn needs to be increased. Globally, cott<strong>on</strong> yarn<br />
exports is <strong>on</strong>ly <strong>on</strong>e fourth <str<strong>on</strong>g>of</str<strong>on</strong>g> total yarn exports, whereas its share in<br />
Pakistan’s total yarn exports is more than 90%. There is a need to diversify<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> product mix <str<strong>on</strong>g>of</str<strong>on</strong>g> yarn exported from Pakistan and increase <str<strong>on</strong>g>the</str<strong>on</strong>g> share <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
yarns o<str<strong>on</strong>g>the</str<strong>on</strong>g>r than cott<strong>on</strong> yarn in total yarn exports. Not <strong>on</strong>ly in exports, but<br />
from <str<strong>on</strong>g>the</str<strong>on</strong>g> domestic garment industry’s point <str<strong>on</strong>g>of</str<strong>on</strong>g> view, filament yarn is very<br />
important for uplifting <str<strong>on</strong>g>the</str<strong>on</strong>g> women’s apparel sector.<br />
v. Woven Fabric and Weaving Industry<br />
Global trade in woven fabric can be classified into two broad categories,<br />
cott<strong>on</strong> and blended fabrics and syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic and artificial fabric, comm<strong>on</strong>ly<br />
referred to as man-made fabric. World trade <str<strong>on</strong>g>of</str<strong>on</strong>g> woven fabric is around US $<br />
43 billi<strong>on</strong>, <str<strong>on</strong>g>of</str<strong>on</strong>g> which <str<strong>on</strong>g>the</str<strong>on</strong>g> man-made fabrics c<strong>on</strong>stitute 57% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> overall<br />
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export value. The Asian regi<strong>on</strong> enjoys a significant positi<strong>on</strong> with regards to<br />
woven fabric, as almost 50% <str<strong>on</strong>g>of</str<strong>on</strong>g> world cott<strong>on</strong> and blended fabric exports are<br />
originated from this regi<strong>on</strong>. The shift <str<strong>on</strong>g>of</str<strong>on</strong>g> man-made fiber producti<strong>on</strong> over <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
past few years from Europe and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r developed regi<strong>on</strong>s towards Asia has<br />
also resulted in <str<strong>on</strong>g>the</str<strong>on</strong>g> healthy growth <str<strong>on</strong>g>of</str<strong>on</strong>g> syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic and artificial fabric exports<br />
from <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong>. Asia currently accounts for almost 48% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> global exports<br />
in <str<strong>on</strong>g>the</str<strong>on</strong>g> man-made fabric category.<br />
vi. Pakistan and Woven Fabric Exports<br />
The textile industry <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan has traditi<strong>on</strong>ally relied <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> manufacturing<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> pure cott<strong>on</strong> fabric. Whereas global mill c<strong>on</strong>sumpti<strong>on</strong> is rapidly moving<br />
towards <str<strong>on</strong>g>the</str<strong>on</strong>g> usage <str<strong>on</strong>g>of</str<strong>on</strong>g> a diverse range <str<strong>on</strong>g>of</str<strong>on</strong>g> staple fibers artificial and syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic<br />
filaments. This is also reflected in Pakistan's export <str<strong>on</strong>g>of</str<strong>on</strong>g> woven fabric, where<br />
Pakistan accounts for almost 7% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world exports in cott<strong>on</strong> and blended<br />
fabrics. On <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r hand its share in manmade fabric exports is limited to<br />
2% <strong>on</strong>ly.<br />
vii. Product and Market Mix<br />
Processing is <str<strong>on</strong>g>the</str<strong>on</strong>g> weakest link in Pakistan's textile value chain, which leads to<br />
high exports <str<strong>on</strong>g>of</str<strong>on</strong>g> unprocessed fabric. Greige fabric dominates <str<strong>on</strong>g>the</str<strong>on</strong>g> export<br />
product mix, accounting for almost 40% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> total fabric exports from<br />
Pakistan. Lack <str<strong>on</strong>g>of</str<strong>on</strong>g> proper dyeing and processing facilities can also be<br />
c<strong>on</strong>sidered to have a negative impact <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> development and growth <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
down stream industry. H<strong>on</strong>g K<strong>on</strong>g, a major player in world apparel trade, is<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> largest importer <str<strong>on</strong>g>of</str<strong>on</strong>g> woven fabric from Pakistan. An important feature <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Pakistan's fabric exports is <str<strong>on</strong>g>the</str<strong>on</strong>g> Bangladeshi market which imports more than<br />
US $ 50 billi<strong>on</strong> worth <str<strong>on</strong>g>of</str<strong>on</strong>g> fabric from Pakistan. By being a major c<strong>on</strong>verter <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
fabric into high value added garments, Bangladesh has streng<str<strong>on</strong>g>the</str<strong>on</strong>g>ned its<br />
positi<strong>on</strong> in internati<strong>on</strong>al apparel markets. In <str<strong>on</strong>g>the</str<strong>on</strong>g> global fabric markets<br />
Pakistan is perceived as a low quality fabric supplier, this translates into a<br />
low unit price realizati<strong>on</strong> when compared with competitors.<br />
viii. Domestic Weaving Industry<br />
The inducti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> shuttle-less weaving machines in <str<strong>on</strong>g>the</str<strong>on</strong>g> recent years has<br />
resulted in a higher growth in fabric producti<strong>on</strong>. Currently <str<strong>on</strong>g>the</str<strong>on</strong>g> shuttle-less<br />
weaving sector is believed to be <str<strong>on</strong>g>the</str<strong>on</strong>g> largest c<strong>on</strong>sumer <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> yarn in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
country. The power loom weaving sector, although quite large in number,<br />
c<strong>on</strong>tributes to export earnings through <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> low quality sheeting<br />
fabric. Quality improvement in fabric producti<strong>on</strong> is directly related to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
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upgrading <str<strong>on</strong>g>of</str<strong>on</strong>g> technology in <str<strong>on</strong>g>the</str<strong>on</strong>g> weaving sector. Future success in <str<strong>on</strong>g>the</str<strong>on</strong>g> weaving<br />
industry is highly dependant up<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> flexibility <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry to cater to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
diverse range <str<strong>on</strong>g>of</str<strong>on</strong>g> fabrics required by <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al as well as local markets.<br />
ix. Issues in Weaving Industry <strong>Development</strong><br />
The growth in world producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> fabrics has been stagnant for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
last ten years. Success <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> weaving industry in Pakistan is associated with<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> diversified usage <str<strong>on</strong>g>of</str<strong>on</strong>g> blends in fabric al<strong>on</strong>g with <str<strong>on</strong>g>the</str<strong>on</strong>g> enhanced c<strong>on</strong>sumpti<strong>on</strong><br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> numerous man-made textile fibers. A move in this directi<strong>on</strong> is also likely<br />
to pave <str<strong>on</strong>g>the</str<strong>on</strong>g> path <str<strong>on</strong>g>of</str<strong>on</strong>g> success for <str<strong>on</strong>g>the</str<strong>on</strong>g> domestic apparel industry by eliminating<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> imbalances in <str<strong>on</strong>g>the</str<strong>on</strong>g> export product mix. Reducti<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> level <str<strong>on</strong>g>of</str<strong>on</strong>g> protecti<strong>on</strong><br />
<str<strong>on</strong>g>of</str<strong>on</strong>g>fered to <str<strong>on</strong>g>the</str<strong>on</strong>g> domestic man-made fibers and filaments. Producers can play an<br />
instrumental role in facilitating this shift to blended and syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fabrics.<br />
Improvement in export product mix and unit price realisati<strong>on</strong> is possible<br />
through technology improved in <str<strong>on</strong>g>the</str<strong>on</strong>g> sector, particularly <str<strong>on</strong>g>the</str<strong>on</strong>g> power loom<br />
sector is in dire need <str<strong>on</strong>g>of</str<strong>on</strong>g> upgrading its equipment. For this purpose mark-up<br />
rates <strong>on</strong> credit facilities, both l<strong>on</strong>g and short-term, including export refinance<br />
should be manipulated in favour <str<strong>on</strong>g>of</str<strong>on</strong>g> high value added products. A cascaded<br />
system <str<strong>on</strong>g>of</str<strong>on</strong>g> credit allocati<strong>on</strong> can act as a catalyst in bringing <str<strong>on</strong>g>the</str<strong>on</strong>g> desired change<br />
through product diversificati<strong>on</strong> and product mix optimizati<strong>on</strong>. Sustainable<br />
growth <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> weaving sector can <strong>on</strong>ly be ensured through aggressive<br />
development <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> domestic apparel industry.<br />
6. Processing<br />
Fabric processing is <str<strong>on</strong>g>the</str<strong>on</strong>g> most critical stage <str<strong>on</strong>g>of</str<strong>on</strong>g> value additi<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> entire<br />
value chain. The processing sector took <str<strong>on</strong>g>of</str<strong>on</strong>g>f in early eighties and investments<br />
were made in <str<strong>on</strong>g>the</str<strong>on</strong>g> sector during that period. But despite this, it remains <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
weakest link <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> entire textile value chain. Woven or knit fabric can ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
be dyed or printed depending up<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> requirements <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> customer who is<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> garment or made-ups manufacturer. About 40% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> fabric exported<br />
from Pakistan is unprocessed. Dyed fabric is <strong>on</strong>ly 14% <str<strong>on</strong>g>of</str<strong>on</strong>g> total fabric exports.<br />
Exports <str<strong>on</strong>g>of</str<strong>on</strong>g> unprocessed fabric results in low unit value realizati<strong>on</strong>.<br />
i. Scarcity <str<strong>on</strong>g>of</str<strong>on</strong>g> Trained Manpower<br />
Availability <str<strong>on</strong>g>of</str<strong>on</strong>g> trained manpower is a very acute problem in <str<strong>on</strong>g>the</str<strong>on</strong>g> processing<br />
industry. The industry is heavily dependent <strong>on</strong> manpower that does not have<br />
proper training, such manpower is not capable enough to produce quality<br />
fabric, resulting in a low unit value realizati<strong>on</strong>. The processing industry<br />
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equires a dedicated modern training institute in order to align itself according<br />
to <str<strong>on</strong>g>the</str<strong>on</strong>g> demand <str<strong>on</strong>g>of</str<strong>on</strong>g> internati<strong>on</strong>al markets.<br />
ii. Technology<br />
Currently, <str<strong>on</strong>g>the</str<strong>on</strong>g>re are about 600 processing units <str<strong>on</strong>g>of</str<strong>on</strong>g> which <strong>on</strong>ly 5% are in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
integrated mill sector. The rest are independent commercial dyeing and<br />
printing units. Current levels <str<strong>on</strong>g>of</str<strong>on</strong>g> technology in <str<strong>on</strong>g>the</str<strong>on</strong>g> processing industry is low<br />
and most <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> machinery is old.<br />
iii. Dyes and Chemicals<br />
Dyes and chemicals form <str<strong>on</strong>g>the</str<strong>on</strong>g> most important input for <str<strong>on</strong>g>the</str<strong>on</strong>g> processing<br />
industry. Duty structure <strong>on</strong> dyes and chemicals and <str<strong>on</strong>g>the</str<strong>on</strong>g> raw materials for<br />
manufacturing dyes needs to be rati<strong>on</strong>alized.<br />
7. Made-ups<br />
After garments, made-ups is <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d highest value-added sub-sector <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Textile sector. It includes items like bedwear, table sheets, towels, curtains,<br />
tents, bags, etc. Bedwear and towels are <str<strong>on</strong>g>the</str<strong>on</strong>g> two larger product categories in<br />
terms <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> and exports. Made-ups manufacturing involves many<br />
processes including weaving, knitting, processing and stitching. The type <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
skills required for manufacturing made-ups are much more diversified<br />
compared to o<str<strong>on</strong>g>the</str<strong>on</strong>g>r sectors.<br />
i. Bedwear<br />
Bedwear is an important value-added sub-sector <str<strong>on</strong>g>of</str<strong>on</strong>g> Textile sector. The<br />
products include bed sheets, pillow covers, quilts etc. Am<strong>on</strong>gst all <str<strong>on</strong>g>the</str<strong>on</strong>g> made<br />
ups, bedwear is <str<strong>on</strong>g>the</str<strong>on</strong>g> largest sector in terms <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> and exports. Total<br />
global exports <str<strong>on</strong>g>of</str<strong>on</strong>g> bed linen was $2.9 billi<strong>on</strong> in 1997. Pakistan’s exports were<br />
$487 milli<strong>on</strong> translating into 16.7% global market share. Pakistan is sec<strong>on</strong>d<br />
<strong>on</strong>ly to China in <str<strong>on</strong>g>the</str<strong>on</strong>g> row <str<strong>on</strong>g>of</str<strong>on</strong>g> bedwear exporters. A major chunk <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Pakistani bedwear industry is in <str<strong>on</strong>g>the</str<strong>on</strong>g> informal sector. There are 150 units in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> organized sector and <str<strong>on</strong>g>the</str<strong>on</strong>g> rest in <str<strong>on</strong>g>the</str<strong>on</strong>g> unorganized sector. Pakistani<br />
manufacturers need to manufacture products for <str<strong>on</strong>g>the</str<strong>on</strong>g> upper market segment.<br />
This is <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly way to survive in an envir<strong>on</strong>ment in which <str<strong>on</strong>g>the</str<strong>on</strong>g> margins in<br />
traditi<strong>on</strong>al bedwear products are shrinking very rapidly. Higher value added<br />
products will increase <str<strong>on</strong>g>the</str<strong>on</strong>g> pr<str<strong>on</strong>g>of</str<strong>on</strong>g>itability <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> manufacturer.<br />
107
ii. Towels<br />
The total global market <str<strong>on</strong>g>of</str<strong>on</strong>g> towels was $3.8 billi<strong>on</strong> in 1997. Pakistan held<br />
sec<strong>on</strong>d positi<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> global export <str<strong>on</strong>g>of</str<strong>on</strong>g> towels with exports <str<strong>on</strong>g>of</str<strong>on</strong>g> $305 milli<strong>on</strong> an<br />
8% market share in 1997. There are no major technology issues in this<br />
operati<strong>on</strong>.<br />
8. Apparel<br />
The apparel segment is <str<strong>on</strong>g>the</str<strong>on</strong>g> highest value added link in <str<strong>on</strong>g>the</str<strong>on</strong>g> entire textile value<br />
chain. Trade in this sector accounts for 53% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> total value <str<strong>on</strong>g>of</str<strong>on</strong>g> global textile<br />
trade and has c<strong>on</strong>sistently grown over <str<strong>on</strong>g>the</str<strong>on</strong>g> last two decades. According to<br />
WTO estimates with <str<strong>on</strong>g>the</str<strong>on</strong>g> eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> quotas in <str<strong>on</strong>g>the</str<strong>on</strong>g> year 2005, total trade <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
textiles and clothing will exceed <str<strong>on</strong>g>the</str<strong>on</strong>g> US $ 500 billi<strong>on</strong> mark. This growth will<br />
be driven primarily by <str<strong>on</strong>g>the</str<strong>on</strong>g> clothing sector, which will c<strong>on</strong>stitute almost 70%<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> total trade. Pakistan has been a major Asian player in <str<strong>on</strong>g>the</str<strong>on</strong>g> garment<br />
export market especially during <str<strong>on</strong>g>the</str<strong>on</strong>g> 1980s and early 90s. Total apparel<br />
exports from Pakistan were to <str<strong>on</strong>g>the</str<strong>on</strong>g> tune <str<strong>on</strong>g>of</str<strong>on</strong>g> US$ 1.24 billi<strong>on</strong> in 1998. The<br />
importance <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> apparel sector in <str<strong>on</strong>g>the</str<strong>on</strong>g> overall ec<strong>on</strong>omic perspective is two<br />
fold. On <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>e hand <str<strong>on</strong>g>the</str<strong>on</strong>g> sector has <str<strong>on</strong>g>the</str<strong>on</strong>g> potential to be <str<strong>on</strong>g>the</str<strong>on</strong>g> engine <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistani<br />
textile export growth, while <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r <str<strong>on</strong>g>the</str<strong>on</strong>g> sector is <str<strong>on</strong>g>the</str<strong>on</strong>g> largest source <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
creating low cost employment in <str<strong>on</strong>g>the</str<strong>on</strong>g> country at all levels. According to our<br />
estimates <str<strong>on</strong>g>the</str<strong>on</strong>g>re are currently seven hundred thousand people, both skilled and<br />
unskilled, employed <strong>on</strong>ly in this sub-sector and <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a potential <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
increasing this employment by more than <strong>on</strong>e hundred percent over <str<strong>on</strong>g>the</str<strong>on</strong>g> next<br />
five years given <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>ducive business envir<strong>on</strong>ment for export growth.<br />
i. Emerging Global Trade Patterns<br />
Global textile trade has witnessed certain shifts in <str<strong>on</strong>g>the</str<strong>on</strong>g> recent times. It is<br />
noteworthy that over <str<strong>on</strong>g>the</str<strong>on</strong>g> past decade, clothing trade has advanced at a faster<br />
rate as compared to textile trade. The textile trade increased at an overall<br />
growth rate <str<strong>on</strong>g>of</str<strong>on</strong>g> 3.2%, whereas clothing trade increased by almost 82% from<br />
1990 through 1998. O<str<strong>on</strong>g>the</str<strong>on</strong>g>r revealing developments are <str<strong>on</strong>g>the</str<strong>on</strong>g> changing world<br />
trading patterns and preferences that can have serious impacts <strong>on</strong> those<br />
countries which fail to align <str<strong>on</strong>g>the</str<strong>on</strong>g>mselves quickly with <str<strong>on</strong>g>the</str<strong>on</strong>g>se evolving market<br />
c<strong>on</strong>diti<strong>on</strong>s.<br />
While <str<strong>on</strong>g>the</str<strong>on</strong>g> USA and <str<strong>on</strong>g>the</str<strong>on</strong>g> European Uni<strong>on</strong> remain to be <str<strong>on</strong>g>the</str<strong>on</strong>g> largest markets for<br />
garments and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r apparel products with a combined share <str<strong>on</strong>g>of</str<strong>on</strong>g> 73% in total<br />
global clothing trade, apparel producti<strong>on</strong> centres are shifting, particularly<br />
favoring countries with lower producti<strong>on</strong> cost or strategic geographic<br />
108
locati<strong>on</strong>s. Asian countries have <str<strong>on</strong>g>the</str<strong>on</strong>g> advantage especially in <str<strong>on</strong>g>the</str<strong>on</strong>g> first case with<br />
lower wage rates and indigenous producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> some <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> raw materials. In<br />
1997, over 59% <str<strong>on</strong>g>of</str<strong>on</strong>g> textile exports and 70% <str<strong>on</strong>g>of</str<strong>on</strong>g> clothing export originated from<br />
Asia. However this competitive advantage in Asia is vulnerable to two basic<br />
developments; <strong>on</strong>e is <str<strong>on</strong>g>the</str<strong>on</strong>g> emerging regi<strong>on</strong>al trade blocks that allow for<br />
preferential trade treatments and <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r is <str<strong>on</strong>g>the</str<strong>on</strong>g> threat from countries that are<br />
located <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> borders <str<strong>on</strong>g>of</str<strong>on</strong>g> major markets. Apparel is a rapidly changing<br />
business with very short product life cycles, c<strong>on</strong>sumer preference depends not<br />
<strong>on</strong>ly <strong>on</strong> seas<strong>on</strong>s but also <strong>on</strong> numerous o<str<strong>on</strong>g>the</str<strong>on</strong>g>r factors. Resp<strong>on</strong>ding quickly to<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>se changing demands is vital for <str<strong>on</strong>g>the</str<strong>on</strong>g> success <str<strong>on</strong>g>of</str<strong>on</strong>g> garment exports. Countries<br />
like Mexico and Turkey have <str<strong>on</strong>g>the</str<strong>on</strong>g> advantage <str<strong>on</strong>g>of</str<strong>on</strong>g> minimal lead times and are<br />
expected to give tough competiti<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> exporters from Asia. On <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
demand side syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tics and garments made <str<strong>on</strong>g>of</str<strong>on</strong>g> specialized fabrics are taking<br />
away <str<strong>on</strong>g>the</str<strong>on</strong>g> larger share <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> market. Women and men's garments are<br />
gradually giving way to garments made for special usage.<br />
Sportswear, industrial wear and fashi<strong>on</strong> garments for women are some <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
products that <str<strong>on</strong>g>of</str<strong>on</strong>g>fer increasing opportunities to export countries like Pakistan<br />
specially in terms <str<strong>on</strong>g>of</str<strong>on</strong>g> high values. Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r major factor, which garment<br />
manufacturers and exporters from developing countries like Pakistan will<br />
have to guard for, is <str<strong>on</strong>g>the</str<strong>on</strong>g> introducti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> n<strong>on</strong>-tariff trade barriers. While <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
free trade regime is increasingly gaining foothold in <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al export<br />
arena, developed countries are becoming increasingly selective in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
import preferences. Issues like compliance to envir<strong>on</strong>mental standards and a<br />
self-defined working envir<strong>on</strong>ment can severely restrict exports from <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
developing countries. These changing global trade patterns <str<strong>on</strong>g>of</str<strong>on</strong>g>fer more<br />
opportunities than it poses threats. The need now is to gear garment<br />
manufacturers and exporters from Pakistan to exploit <str<strong>on</strong>g>the</str<strong>on</strong>g> tremendous<br />
opportunities that <str<strong>on</strong>g>the</str<strong>on</strong>g> global apparel market <str<strong>on</strong>g>of</str<strong>on</strong>g>fers.<br />
III. CURRENT COTTON POLICY IN RICH COUNTRIES AND ITS<br />
AFFECTS ON COTTON PRODUCING COUNTRIES FROM THE<br />
ASIA REGION<br />
Government measures in many countries prevented a drop in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> area<br />
commensurate with <str<strong>on</strong>g>the</str<strong>on</strong>g> collapse in internati<strong>on</strong>al prices in 2001. Prices at <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
time <str<strong>on</strong>g>of</str<strong>on</strong>g> planting were at <str<strong>on</strong>g>the</str<strong>on</strong>g>ir lowest level, in nominal terms, at that period <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> year since 1973. Fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r, prices were c<strong>on</strong>siderably below <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
producti<strong>on</strong> for most producers. Never<str<strong>on</strong>g>the</str<strong>on</strong>g>less, <str<strong>on</strong>g>the</str<strong>on</strong>g> world cott<strong>on</strong> area declined<br />
by <strong>on</strong>ly 11 percent in 2002/03 to just below 30 milli<strong>on</strong> hectares <str<strong>on</strong>g>the</str<strong>on</strong>g> lowest<br />
since 1986/87. The governments <str<strong>on</strong>g>of</str<strong>on</strong>g> most cott<strong>on</strong> producing countries are<br />
109
heavily involved in cott<strong>on</strong> producti<strong>on</strong> and marketing. Government policies<br />
and programs affect <str<strong>on</strong>g>the</str<strong>on</strong>g> locati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong>, c<strong>on</strong>sumpti<strong>on</strong>, and<br />
prices. These policies can be grouped into four broad categories (ICAC<br />
1993c):<br />
• Policies designed to boost farm income while interfering as little as<br />
possible with <str<strong>on</strong>g>the</str<strong>on</strong>g> level <str<strong>on</strong>g>of</str<strong>on</strong>g> market prices;<br />
• Policies designed to c<strong>on</strong>trol <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector through extensive state<br />
regulati<strong>on</strong>;<br />
• Policies designed to manage domestic cott<strong>on</strong> prices so as to boost<br />
exports <str<strong>on</strong>g>of</str<strong>on</strong>g> textiles and apparel; and<br />
• Free market policies.<br />
Hence, cott<strong>on</strong> producti<strong>on</strong> is directly or indirectly affected by <str<strong>on</strong>g>the</str<strong>on</strong>g> policies <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
supply c<strong>on</strong>trol, price and income stabilizati<strong>on</strong> in many countries, by some<br />
form <str<strong>on</strong>g>of</str<strong>on</strong>g> subsidy in all countries and by effective price minimums in most<br />
countries. In all countries, farmers receive some form <str<strong>on</strong>g>of</str<strong>on</strong>g> subsidized assistance<br />
or preferential allocati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> inputs such as planting seed,<br />
fertilizers, pesticides, and irrigati<strong>on</strong> water, including Australia and <str<strong>on</strong>g>the</str<strong>on</strong>g> United<br />
States, where water is indirectly subsidized. According to <str<strong>on</strong>g>the</str<strong>on</strong>g> estimates <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee, direct income and price support<br />
provided to <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry was $5.8 billi<strong>on</strong> world wide in 2001/02 and is<br />
estimated to have declined in 2002/03 to $3.8 billi<strong>on</strong>. Lower levels <str<strong>on</strong>g>of</str<strong>on</strong>g> support<br />
are <str<strong>on</strong>g>the</str<strong>on</strong>g> result <str<strong>on</strong>g>of</str<strong>on</strong>g> lower producti<strong>on</strong> and higher market prices. Eight countries<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g>fered direct income and price support in 2003/04, ranging from $2 billi<strong>on</strong> in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> USA to $7 milli<strong>on</strong> in Mexico. Government support given to farmers in<br />
different countries is given in table 2 and discussed below:<br />
USA<br />
Total expenditures by <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. government in support <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry<br />
amounted to $3.3 billi<strong>on</strong> in 2001/02, <str<strong>on</strong>g>of</str<strong>on</strong>g> which direct income and price<br />
support was $3 billi<strong>on</strong>. U.S government support is estimated to have declined<br />
to $3.2 billi<strong>on</strong> in 2002/03. New legislati<strong>on</strong> came into effect last year, and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
2002 farm bill now determines support for <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry in 2002/03 and<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> following 5 years. The 2002 farm bill replaced <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> flexibility<br />
c<strong>on</strong>tract payments (PFC) with a direct payment (DP) and a counter-cyclical<br />
payment (CP). Both payments are based <strong>on</strong> historical planted area and yield,<br />
ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than actual producti<strong>on</strong>. DPs are independent <str<strong>on</strong>g>of</str<strong>on</strong>g> market prices and are<br />
set at 6.67 U.S. cents per pound for 2002/03. CPs are issued when <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
effective price is below <str<strong>on</strong>g>the</str<strong>on</strong>g> target price. The effective price is <str<strong>on</strong>g>the</str<strong>on</strong>g> DP plus <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
higher <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al average market price paid to producers or <str<strong>on</strong>g>the</str<strong>on</strong>g> loan rate.<br />
110
In 2002/03, <str<strong>on</strong>g>the</str<strong>on</strong>g> loan rate is set at 52 U.S cents and <str<strong>on</strong>g>the</str<strong>on</strong>g> target price is 72.4<br />
U.S. cents. The loan deficiency payment (LDP)-issued when world prices<br />
adjusted by quality and locati<strong>on</strong> are below <str<strong>on</strong>g>the</str<strong>on</strong>g> loan rate--c<strong>on</strong>tinues to be<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g>fered in <str<strong>on</strong>g>the</str<strong>on</strong>g> 2002 farm bill. It is estimated that total direct income and price<br />
support in <str<strong>on</strong>g>the</str<strong>on</strong>g> USA amounted to $ 2 billi<strong>on</strong> in 2002/03. The US government<br />
announced an export subsidy <str<strong>on</strong>g>of</str<strong>on</strong>g> 22 US cent per pound <strong>on</strong> 5th April,2004.<br />
China (Mainland)<br />
The stock-reducti<strong>on</strong> policy <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> government <str<strong>on</strong>g>of</str<strong>on</strong>g> China (Mainland) resulted<br />
in local prices declining more rapidly than internati<strong>on</strong>al prices, and<br />
government expenditures to assist cott<strong>on</strong> growers are estimated to have<br />
declined by 37% to $1.2 billi<strong>on</strong> in 2001/02. A fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r reducti<strong>on</strong> in stocks, and<br />
reduced producti<strong>on</strong>, resulted in an estimated $750 milli<strong>on</strong> spent by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Chinese government in support <str<strong>on</strong>g>of</str<strong>on</strong>g> growers in 2003/03.<br />
European Uni<strong>on</strong><br />
Cott<strong>on</strong> growers in Spain and Greece are <str<strong>on</strong>g>of</str<strong>on</strong>g>fered assistance through <str<strong>on</strong>g>the</str<strong>on</strong>g> EU<br />
Comm<strong>on</strong> Agricultural Policy (CAP). Payments under <str<strong>on</strong>g>the</str<strong>on</strong>g> CAP are based <strong>on</strong><br />
estimated seed cott<strong>on</strong> producti<strong>on</strong>. The CAP <str<strong>on</strong>g>of</str<strong>on</strong>g>fers assistance for a maximum<br />
producti<strong>on</strong> (782,000 t<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> seed cott<strong>on</strong> for Greece and 249,000 t<strong>on</strong>s for<br />
Spain) and includes penalties for excess producti<strong>on</strong>. The cott<strong>on</strong> growing<br />
regi<strong>on</strong>s in Spain and Greece are am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> lowest-income regi<strong>on</strong>s in <str<strong>on</strong>g>the</str<strong>on</strong>g> EU,<br />
and income support is viewed as a form <str<strong>on</strong>g>of</str<strong>on</strong>g> ec<strong>on</strong>omic assistance. Income<br />
support in <str<strong>on</strong>g>the</str<strong>on</strong>g> EU amounted to $979 milli<strong>on</strong> in 2001/02 and is estimated at<br />
$957 milli<strong>on</strong> in 2002/03. The streng<str<strong>on</strong>g>the</str<strong>on</strong>g>ning <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Euro over <str<strong>on</strong>g>the</str<strong>on</strong>g> last two<br />
years has affected EU support expressed in U.S. dollars, and while estimated<br />
support for 2002/03 represents a 2% decline in dollars, in Euros support<br />
represents a 5.7 % decline.<br />
Egypt<br />
As prices declined during 2000 and 2001, <str<strong>on</strong>g>the</str<strong>on</strong>g> government <str<strong>on</strong>g>of</str<strong>on</strong>g> Egypt provided<br />
$2.3 milli<strong>on</strong> a year during <str<strong>on</strong>g>the</str<strong>on</strong>g> last two seas<strong>on</strong>s. In 2002/03, <str<strong>on</strong>g>the</str<strong>on</strong>g> government<br />
budgeted $33 milli<strong>on</strong> to help finance <str<strong>on</strong>g>the</str<strong>on</strong>g> difference between market prices<br />
and prices paid to producers.<br />
Turkey<br />
Lower prices moved <str<strong>on</strong>g>the</str<strong>on</strong>g> Turkish government to <str<strong>on</strong>g>of</str<strong>on</strong>g>fer a premium <str<strong>on</strong>g>of</str<strong>on</strong>g> 3 U.S.<br />
cents per pound <str<strong>on</strong>g>of</str<strong>on</strong>g> lint to cott<strong>on</strong> growers in 2001/02, equivalent to $59<br />
111
milli<strong>on</strong>. The premium resulted in $57 milli<strong>on</strong> in support <str<strong>on</strong>g>of</str<strong>on</strong>g> growers in<br />
2002/03.<br />
Brazil<br />
In 2001/02, Brazilian domestic prices fell below <str<strong>on</strong>g>the</str<strong>on</strong>g> minimum guaranteed<br />
prices, which were 36.6 U.S. cents per pound and <str<strong>on</strong>g>the</str<strong>on</strong>g> government spent<br />
US$9.6 milli<strong>on</strong> to cover <str<strong>on</strong>g>the</str<strong>on</strong>g> difference. Brazilian growers sold cott<strong>on</strong> at <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
minimum guaranteed price and <str<strong>on</strong>g>the</str<strong>on</strong>g> government reimbursed buyers for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
difference between <str<strong>on</strong>g>the</str<strong>on</strong>g> minimum price and market prices. For 2002/03,<br />
market prices were well above <str<strong>on</strong>g>the</str<strong>on</strong>g> minimum guaranteed price, set at 35 U.S.<br />
cents per pound <str<strong>on</strong>g>of</str<strong>on</strong>g> lint and no assistance was <str<strong>on</strong>g>of</str<strong>on</strong>g>fered. The Brazilian<br />
government <str<strong>on</strong>g>of</str<strong>on</strong>g>fered assistance in recent seas<strong>on</strong>s with a program designed to<br />
secure prices above minimum prices through opti<strong>on</strong>s exercised by farmers.<br />
Funding for this program is approved each seas<strong>on</strong> as needed. In 2001/02 and<br />
2002/03 no expenses were reported through this program.<br />
Mexico<br />
In 2001/02, assistance to cott<strong>on</strong> growers was provided by <str<strong>on</strong>g>the</str<strong>on</strong>g> government <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Mexico at a rate <str<strong>on</strong>g>of</str<strong>on</strong>g> $194 per hectare, equivalent to $ 18 milli<strong>on</strong>. For 2002/03,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> government approved legislati<strong>on</strong> to <str<strong>on</strong>g>of</str<strong>on</strong>g>fer a support price mechanism with<br />
a target price <str<strong>on</strong>g>of</str<strong>on</strong>g> 64 U.S. cents per pound, which results in an estimated<br />
payment <str<strong>on</strong>g>of</str<strong>on</strong>g> 8 U.S. cents per pound, or $ 7 milli<strong>on</strong>.<br />
Cote d’Ivoire<br />
In Cote d Ivoire, <str<strong>on</strong>g>the</str<strong>on</strong>g> government provided US $ 8 milli<strong>on</strong> in emergency<br />
assistance to cott<strong>on</strong> growers in 2001/02, equivalent to 2 U.S. cents per pound.<br />
In 2002/03, given that political unrest in <str<strong>on</strong>g>the</str<strong>on</strong>g> country greatly affected <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
cott<strong>on</strong> growing regi<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> north, <str<strong>on</strong>g>the</str<strong>on</strong>g> government increased assistance to<br />
US$ 14 milli<strong>on</strong>, or 4 U.S. cents per pound.<br />
Pakistan<br />
In Pakistan, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is no subsidy <strong>on</strong> cott<strong>on</strong> and textile. However <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
government announces every year a minimum support price to encourage<br />
farmers to plant cott<strong>on</strong>. The Trading Corporati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan (TCP) may be<br />
asked buy <str<strong>on</strong>g>the</str<strong>on</strong>g> government to by cott<strong>on</strong> if prices fall below <str<strong>on</strong>g>the</str<strong>on</strong>g> minimum<br />
support price. So far, TCP has not come to <str<strong>on</strong>g>the</str<strong>on</strong>g> rescue <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers, even when<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> prices were below minimum support price. So in effect, at present <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
cott<strong>on</strong> trade is free from producti<strong>on</strong> to vale additi<strong>on</strong>. During <str<strong>on</strong>g>the</str<strong>on</strong>g> 80s, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
112
percentage <str<strong>on</strong>g>of</str<strong>on</strong>g> quality seed used increased by four to five percent per annum,<br />
reaching 82 percent in 1985/86, and plant protecti<strong>on</strong> coverage has also<br />
increased. These two factors account for most <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> increase in yield.<br />
Producti<strong>on</strong> has also been influenced <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> input side, by subsidies<br />
amounting to about three US cents per pound <str<strong>on</strong>g>of</str<strong>on</strong>g> lint. The major subsidized<br />
input has been credit, in <str<strong>on</strong>g>the</str<strong>on</strong>g> form <str<strong>on</strong>g>of</str<strong>on</strong>g> interest free loans <str<strong>on</strong>g>of</str<strong>on</strong>g> up to 10,000<br />
Pakistani Rupees, which are made available to small farmers by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Agricultural <strong>Development</strong> Bank <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan and by <str<strong>on</strong>g>the</str<strong>on</strong>g> commercial banks.<br />
Ginners also provide credit facilities to permanent customers. Private<br />
agencies and dealers supply fertilizers and pesticides. Ginneries are owned by<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> private sector.<br />
It is necessary to review <str<strong>on</strong>g>the</str<strong>on</strong>g> old Pakistani cott<strong>on</strong> export policy in order to<br />
understand <str<strong>on</strong>g>the</str<strong>on</strong>g> current policy. The government m<strong>on</strong>opoly <strong>on</strong> exports<br />
terminated in 1988 when <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Export Corporati<strong>on</strong> (CEC) was<br />
abolished. With this change, two important prices were introduced to c<strong>on</strong>trol<br />
exports and establish a cott<strong>on</strong> price for Pakistani spinners. The Minimum<br />
Export Price (MEP) represents <str<strong>on</strong>g>the</str<strong>on</strong>g> cheapest level at which Pakistani cott<strong>on</strong><br />
can be bought, and is <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly value that affects <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al cott<strong>on</strong><br />
market, and <str<strong>on</strong>g>the</str<strong>on</strong>g> Benchmark (BM), which is <str<strong>on</strong>g>the</str<strong>on</strong>g> maximum internal price paid<br />
for cott<strong>on</strong>. The MEP is set daily (in a manner similar to <str<strong>on</strong>g>the</str<strong>on</strong>g> AWP in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
United States), while <str<strong>on</strong>g>the</str<strong>on</strong>g> BM is generally set for each seas<strong>on</strong>, but can be<br />
altered. The export duty is calculated as a percentage <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> difference<br />
between <str<strong>on</strong>g>the</str<strong>on</strong>g> BM and MEP. However, this percentage is variable, as<br />
dem<strong>on</strong>strated by <str<strong>on</strong>g>the</str<strong>on</strong>g> rates for Oct 91 <str<strong>on</strong>g>of</str<strong>on</strong>g> 100 percent, Nov 91-90 percent, Dec<br />
91-75 percent, and Jan 92-60 percent, a rate that applied through <str<strong>on</strong>g>the</str<strong>on</strong>g> change<br />
in policies. The new crop MEP is typically not announced until December,<br />
hence, exporters cannot forward sell new crop cott<strong>on</strong> without using <str<strong>on</strong>g>the</str<strong>on</strong>g> New<br />
York Futures Market, and domestic buyers have first opti<strong>on</strong> <strong>on</strong> new crop<br />
purchases. The new crop MEP is normally set relative to <str<strong>on</strong>g>the</str<strong>on</strong>g> old crop MEP to<br />
move old crop cott<strong>on</strong> first.<br />
In August 1992, Pakistan’s Ec<strong>on</strong>omic Coordinati<strong>on</strong> Committee approved a<br />
major change in <str<strong>on</strong>g>the</str<strong>on</strong>g> 1992/93 cott<strong>on</strong> policy. The benchmark system for<br />
calculating export duty was abolished and a duty was levied <strong>on</strong> MEP above<br />
45.00 cents per pound, with increments <str<strong>on</strong>g>of</str<strong>on</strong>g> two cents for each cent above that<br />
level. The old export duty was essentially replaced by an export tax that is set<br />
as a progressive benchmark, which is applied to a rising export price above a<br />
benchmark MEP, with a c<strong>on</strong>stant gin yard cost subtracted. The gin-yard price<br />
can be increased to keep farmers happy and <str<strong>on</strong>g>the</str<strong>on</strong>g> new variable can be set at 100<br />
percent. The benchmark MEP under this regime was 45.00 cents per pound, a<br />
three cent increase from <str<strong>on</strong>g>the</str<strong>on</strong>g> previous BM, which was 42.00 cents per pound.<br />
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The new structure stabilized <str<strong>on</strong>g>the</str<strong>on</strong>g> internal cost <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> in Pakistan and in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
case <str<strong>on</strong>g>of</str<strong>on</strong>g> rising prices, <str<strong>on</strong>g>the</str<strong>on</strong>g> duty kept cott<strong>on</strong> in Pakistan for domestic<br />
c<strong>on</strong>sumpti<strong>on</strong>. The new policy does not define <str<strong>on</strong>g>the</str<strong>on</strong>g> impact in a depressed<br />
market, i.e. when <str<strong>on</strong>g>the</str<strong>on</strong>g> MEP is lower than <str<strong>on</strong>g>the</str<strong>on</strong>g> benchmark MEP, in which case<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> tax rate would be zero and no duty would apply to exports. However, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
duty is still a variable levy which can be changed, if need be to help move<br />
cott<strong>on</strong> or keep it in <str<strong>on</strong>g>the</str<strong>on</strong>g> country.<br />
Obviously, <str<strong>on</strong>g>the</str<strong>on</strong>g> subsidizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Pakistani textile industry gives Pakistan a<br />
large comparative advantage over o<str<strong>on</strong>g>the</str<strong>on</strong>g>r spinners since abut 50 percent <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
yarn cost is accounted for by cott<strong>on</strong>. This is reflected in <str<strong>on</strong>g>the</str<strong>on</strong>g> explosi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> yarn<br />
exports from Pakistan, which increased from 292,253,000kgs in 1988/89 to<br />
502,672,000 kgs in 1990/91. In 1995-96, cott<strong>on</strong> policy was changed and free<br />
exports and free imports was allowed. The bench mark and MEP were<br />
waived. In 1996-97 <str<strong>on</strong>g>the</str<strong>on</strong>g> government imposed a general sales tax, at <str<strong>on</strong>g>the</str<strong>on</strong>g> rate <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
15% <strong>on</strong> cott<strong>on</strong>. This 15% GST is refundable if <str<strong>on</strong>g>the</str<strong>on</strong>g> product has been sold for<br />
spinning or weaving. Exports were exempted form GST. In 2001 <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
government imposed GST <strong>on</strong> fertilizers and pesticides. So truly, speaking<br />
Pakistani cott<strong>on</strong> has no subsidy at any stage.<br />
India<br />
India manages domestic cott<strong>on</strong> prices to increase textile producti<strong>on</strong> and<br />
employs a support price for farmers. The support prices for major varieties<br />
are fixed <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> recommendati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> commissi<strong>on</strong> for agriculture costs and<br />
prices. Some subsidies are given for <str<strong>on</strong>g>the</str<strong>on</strong>g> various comp<strong>on</strong>ent schemes <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
centrally sp<strong>on</strong>sored Intensive Cott<strong>on</strong> <strong>Development</strong> Program. The cost <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
major inputs for dem<strong>on</strong>strati<strong>on</strong>s and cultivati<strong>on</strong> expenses for <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong><br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> Breeders and Foundati<strong>on</strong> Seed are met by <str<strong>on</strong>g>the</str<strong>on</strong>g> scheme. At <str<strong>on</strong>g>the</str<strong>on</strong>g> farm level,<br />
Cooperative Credit Societies, Cooperative Commercial Banks, and State<br />
Agricultural Departments generally provide financing, although in some area<br />
private traders may finance <str<strong>on</strong>g>the</str<strong>on</strong>g> crop. Cooperative Credit Societies obtain<br />
funds from States Cooperative Banks, which, in turn, obtain funds from <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Nati<strong>on</strong>al Bank for Agricultural and Rural <strong>Development</strong>.<br />
Most <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> ginneries are individually owned, although a few are textile mill<br />
owned. In some areas, Gujarat, Maharashtra, Tamil Nadu, Punjab, and<br />
Karnataka, ginneries are cooperative farmer entities. India employs a mixed<br />
cott<strong>on</strong> procurement system. In Maharashtra, <str<strong>on</strong>g>the</str<strong>on</strong>g> Maharashtra State<br />
Cooperative Marketing Federati<strong>on</strong>, a public sector entity, purchases all <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
cott<strong>on</strong> while ginning companies generally purchase <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
states. In a few instances, textile mills and private traders may purchase <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
114
cott<strong>on</strong>. The Cott<strong>on</strong> Corporati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> India (CCI), a public sector entity,<br />
provides price support in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r states and purchases cott<strong>on</strong> for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Nati<strong>on</strong>alized Textile Industry. Until recently, private traders were <strong>on</strong>ly<br />
involved in <str<strong>on</strong>g>the</str<strong>on</strong>g> export <str<strong>on</strong>g>of</str<strong>on</strong>g> Assam Comilla, yellow pickings, and Zoda. All<br />
o<str<strong>on</strong>g>the</str<strong>on</strong>g>r export activity was handled by CCI, <str<strong>on</strong>g>the</str<strong>on</strong>g> Maharashtra cooperative, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Gujarat State Marketing Federati<strong>on</strong>, and <str<strong>on</strong>g>the</str<strong>on</strong>g> state marketing federati<strong>on</strong>s.<br />
Export quotas and Minimum Export Prices are set by <str<strong>on</strong>g>the</str<strong>on</strong>g> government and<br />
sales are by tender. Forward sales are permitted in all <str<strong>on</strong>g>of</str<strong>on</strong>g> India except Punjab<br />
and <str<strong>on</strong>g>the</str<strong>on</strong>g> Uni<strong>on</strong> Territories <str<strong>on</strong>g>of</str<strong>on</strong>g> Delhi and Chandigarh. C<strong>on</strong>tracts are generally<br />
between <str<strong>on</strong>g>the</str<strong>on</strong>g> farmer and ginner or a private merchant. They are n<strong>on</strong>transferable<br />
and are governed by <str<strong>on</strong>g>the</str<strong>on</strong>g> forward C<strong>on</strong>tract (Regulati<strong>on</strong>) Act,<br />
1952.<br />
Central Asia (Uzbekistan)<br />
Cott<strong>on</strong> is <str<strong>on</strong>g>the</str<strong>on</strong>g> most important crop in Uzbekistan, Turkmenistan and<br />
Tajikistan. It is also grown in Kazakhstan, Kyrgyzstan, Azerbaijan, and<br />
Kirghizia. However, civil wars are c<strong>on</strong>tributing to producti<strong>on</strong> declines in both<br />
Azerbaijan and Tajikistan. Since Uzbekistan produces around two-thirds <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
FSU cott<strong>on</strong> and Turkmenistan produces roughly <strong>on</strong>e-sixth <str<strong>on</strong>g>of</str<strong>on</strong>g> FSU cott<strong>on</strong> <strong>on</strong>ly<br />
cott<strong>on</strong> producti<strong>on</strong> policy in Uzbekistan is discussed in detail in this secti<strong>on</strong>.<br />
The policies <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>se two states are very similar with <str<strong>on</strong>g>the</str<strong>on</strong>g> major excepti<strong>on</strong><br />
being that cott<strong>on</strong> export marketing in Turkmenistan is handled by a single<br />
state agency.<br />
Uzbekistan<br />
Price increases as incentives to promote producti<strong>on</strong> and /or increase<br />
efficiency have been n<strong>on</strong>-existent. State producti<strong>on</strong> orders, highly subsidized<br />
fixed input prices, and fixed output prices determine artificial pr<str<strong>on</strong>g>of</str<strong>on</strong>g>it. The<br />
producti<strong>on</strong> order is in <str<strong>on</strong>g>the</str<strong>on</strong>g> form <str<strong>on</strong>g>of</str<strong>on</strong>g> a producti<strong>on</strong> quota in a specified area,<br />
variety and input level furnished by <str<strong>on</strong>g>the</str<strong>on</strong>g> state. Water is supplied free. The<br />
government is attempting to introduce market incentives into <str<strong>on</strong>g>the</str<strong>on</strong>g> system in a<br />
limited fashi<strong>on</strong>. The amount <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> that can be marketed by <str<strong>on</strong>g>the</str<strong>on</strong>g> collective<br />
farm subject to an export license has increased to 5, 15, and 20 percent<br />
respectively in <str<strong>on</strong>g>the</str<strong>on</strong>g> past three years. However, this <strong>on</strong>ly applies if <str<strong>on</strong>g>the</str<strong>on</strong>g> quota is<br />
met and exports are subject to a tax if proceeds are not used to purchase hard<br />
currency inputs.<br />
Cott<strong>on</strong> marketing in Uzbekistan is both for barter and cash, and “fragmented”<br />
and apparently not coordinated. Decisi<strong>on</strong>s <strong>on</strong> cott<strong>on</strong> marketing are made <strong>on</strong> a<br />
quarterly basis, quarterly shipment orders by ginnery, grade, and buyer are<br />
115
egarded as “State Secrets.” Pre-1991, marketing <str<strong>on</strong>g>of</str<strong>on</strong>g> Uzbekistan cott<strong>on</strong> was<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> resp<strong>on</strong>sibility <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> USSR State Agency, Nova Export. This agency<br />
established barter agreements with Eastern Europe, o<str<strong>on</strong>g>the</str<strong>on</strong>g>r socialist trading<br />
partners (Cuba, Vietnam and N. Korea) and USSR republics. Excess cott<strong>on</strong><br />
was sold in hard currency and amounted to around 200,000 mt annually. No<br />
payment was made for exports to Eastern Europe and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r socialist<br />
countries, Instead Uzbekistan and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r Central Asian cott<strong>on</strong> producing<br />
republics were allowed to accumulate n<strong>on</strong>-c<strong>on</strong>vertible currency credits for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
procurement <str<strong>on</strong>g>of</str<strong>on</strong>g> items from a list <str<strong>on</strong>g>of</str<strong>on</strong>g> selected goods which were rarely<br />
available. Since all goods flowed between USSR Republics, it is difficult to<br />
ascertain whe<str<strong>on</strong>g>the</str<strong>on</strong>g>r or not <str<strong>on</strong>g>the</str<strong>on</strong>g> trade flow was positive or negative for<br />
Uzbekistan. However, Uzbekistan received 60 percent <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> proceeds from<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>se sales in hard currency if <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> shipped to <str<strong>on</strong>g>the</str<strong>on</strong>g> ports was inferior to<br />
selected specificati<strong>on</strong>s. The probably resulted in ginneries being able to<br />
produce a specific fibre grade from variable seedcott<strong>on</strong> lots, a process that<br />
c<strong>on</strong>tinues today. Generally speaking, <str<strong>on</strong>g>the</str<strong>on</strong>g> grades exported to o<str<strong>on</strong>g>the</str<strong>on</strong>g>r Republics<br />
or to s<str<strong>on</strong>g>of</str<strong>on</strong>g>t currency markets were inferior to those exported to hard currency<br />
markets. Selected countries, in particular Hungary and to a more limited<br />
degree East Germany, developed <str<strong>on</strong>g>the</str<strong>on</strong>g> ability to receive cott<strong>on</strong> in excess <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
spinning needs and to sell <str<strong>on</strong>g>the</str<strong>on</strong>g> top grades for hard currency; a process known<br />
as creaming.<br />
The current marketing system involves barter and cash, barter agreement with<br />
former USSR Republics reportedly involving primarily grains, oil and<br />
fertilizers, and barters with internati<strong>on</strong>al cott<strong>on</strong> merchants involving grain in<br />
additi<strong>on</strong> to barters for steel with a Korean firm. Since <str<strong>on</strong>g>the</str<strong>on</strong>g> value <str<strong>on</strong>g>of</str<strong>on</strong>g> grain is<br />
fairly well established in internati<strong>on</strong>al markets price discovery (whe<str<strong>on</strong>g>the</str<strong>on</strong>g>r or<br />
not hard currency denominated) is probably fairly efficient. Barters with <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
former USSR republics are ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r matter entirely. Obviously, this exchange<br />
is mutually beneficial from <str<strong>on</strong>g>the</str<strong>on</strong>g> viewpoint <str<strong>on</strong>g>of</str<strong>on</strong>g> cost due to <str<strong>on</strong>g>the</str<strong>on</strong>g> low<br />
transportati<strong>on</strong> cost that is fixed in terms <str<strong>on</strong>g>of</str<strong>on</strong>g> rubles. The questi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> n<strong>on</strong>performance<br />
with trading partners is ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r questi<strong>on</strong> entirely.<br />
Cott<strong>on</strong> ginning in Uzbekistan comes under <str<strong>on</strong>g>the</str<strong>on</strong>g> Republic Producti<strong>on</strong><br />
Amalgamati<strong>on</strong> (UZKHLOPKOPROM), while cott<strong>on</strong> Standards and Classing<br />
(SIFHAT) comes under <str<strong>on</strong>g>the</str<strong>on</strong>g> Republic Scientific Enterprises (NPO) divisi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
UZKHLOPKOPROM. Seed cott<strong>on</strong> is delivered to collecti<strong>on</strong> centers, where it<br />
is identified by variety and divided into four grades based <strong>on</strong> trash and<br />
moisture. Payment is based <strong>on</strong> net weight adjusted for both. The cott<strong>on</strong> is<br />
transported from collecti<strong>on</strong> centers to ginneries where it is stored in single<br />
varieties <str<strong>on</strong>g>of</str<strong>on</strong>g> single grade stacks weight adjusted for both. The cott<strong>on</strong> is<br />
transported form collecti<strong>on</strong> centers to ginneries where it is stored in single<br />
116
variety; single grade stacks weighing up to 450 mt each. The stacks are<br />
covered with canvas and can be aerated through a tunnel in order to c<strong>on</strong>trol<br />
moisture. The ginning seas<strong>on</strong> extends for ten m<strong>on</strong>ths, but high moisture<br />
stacks are ginned first and seed cott<strong>on</strong> deteriorati<strong>on</strong> does not appear to be a<br />
significant problem. The large, single variety, single grade stacks ensure l<strong>on</strong>g<br />
runs <str<strong>on</strong>g>of</str<strong>on</strong>g> up to 750 bales <str<strong>on</strong>g>of</str<strong>on</strong>g> homogenous cott<strong>on</strong>.<br />
Uzbekistan’s textile industry is indeed str<strong>on</strong>g and displays enormous<br />
potential. The 40-percent increase in cott<strong>on</strong> c<strong>on</strong>sumpti<strong>on</strong> over <str<strong>on</strong>g>the</str<strong>on</strong>g> past five<br />
years in due primarily to export-oriented foreign investment, attracted by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
quality, reliability and low price <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs (cott<strong>on</strong>, labor and energy) and by<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> political and financial support <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> government. Major foreign partners<br />
have well-established internati<strong>on</strong>al marketing relati<strong>on</strong>ships that virtually<br />
assure c<strong>on</strong>tinued textile exports, and in at least <strong>on</strong>e important case, foreign<br />
partners have signed agreements that will require dramatic increases in textile<br />
output over <str<strong>on</strong>g>the</str<strong>on</strong>g> next few years. Surprisingly, nei<str<strong>on</strong>g>the</str<strong>on</strong>g>r investors nor <str<strong>on</strong>g>of</str<strong>on</strong>g>ficials<br />
are counting <strong>on</strong> fellow Comm<strong>on</strong>wealth <str<strong>on</strong>g>of</str<strong>on</strong>g> Independent States (CIS) markets<br />
for export growth in <str<strong>on</strong>g>the</str<strong>on</strong>g> near term, but are looking instead to <str<strong>on</strong>g>the</str<strong>on</strong>g> European<br />
Uni<strong>on</strong> and Asia.<br />
It is c<strong>on</strong>ceivable that Uzbekistan’s cott<strong>on</strong> producti<strong>on</strong> will drop as producers<br />
are granted more freedom, and resource c<strong>on</strong>straints, formerly obscured by<br />
government subsidies prove unsupportable in <str<strong>on</strong>g>the</str<strong>on</strong>g> marketplace. In that case,<br />
cott<strong>on</strong> imports may be necessary to keep <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning industry busy. The<br />
opposite outcome appears much more likely. There is enormous potential for<br />
increased cott<strong>on</strong> producti<strong>on</strong> in Uzbekistan with existing resources, and even<br />
limited liberalizati<strong>on</strong> will almost certainly lead to major advances in<br />
producti<strong>on</strong> and processing efficiency, with higher returns at all stages. In<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>ory, recent reforms make this possible, and <str<strong>on</strong>g>the</str<strong>on</strong>g> strategies, ambiti<strong>on</strong>s and<br />
influence <str<strong>on</strong>g>of</str<strong>on</strong>g> private investors already breaking into <str<strong>on</strong>g>the</str<strong>on</strong>g> market make it likely.<br />
Uzbekistan will likely have a large exportable supply <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> for a l<strong>on</strong>g<br />
time, despite growth in domestic c<strong>on</strong>sumpti<strong>on</strong>. Fur<str<strong>on</strong>g>the</str<strong>on</strong>g>rmore, quality c<strong>on</strong>trol<br />
issues are being resolved by a new classing agency, and <str<strong>on</strong>g>the</str<strong>on</strong>g> growing use <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
aucti<strong>on</strong>s to export cott<strong>on</strong> is warmly received by internati<strong>on</strong>al traders. The<br />
competitiveness <str<strong>on</strong>g>of</str<strong>on</strong>g> Uzbek cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market is improving as a<br />
result. Uzbekistan produces large quantities <str<strong>on</strong>g>of</str<strong>on</strong>g> good cott<strong>on</strong>. Labor is<br />
abundant, well educated and inexpensive at about $30-35/m<strong>on</strong>th. Water and<br />
electricity are reliable and inexpensive. Communicati<strong>on</strong>s, banking and legal<br />
infrastructure is well developed. As a result <str<strong>on</strong>g>of</str<strong>on</strong>g> textile industry development in<br />
recent years, spare machinery parts are available in Uzbekistan. However,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>re is c<strong>on</strong>cern about <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> transport to export markets: The country is<br />
doubly landlocked, and neighboring countries can charge high transportati<strong>on</strong><br />
117
fees. Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r important factor c<strong>on</strong>tributing to Uzbekistan’s competitiveness<br />
is solid government support, political as well as financial. Higher value-added<br />
exports are seen as <str<strong>on</strong>g>the</str<strong>on</strong>g> way to increase <str<strong>on</strong>g>the</str<strong>on</strong>g> inflow <str<strong>on</strong>g>of</str<strong>on</strong>g> foreign currency and<br />
resolve many ec<strong>on</strong>omic and social issues, so cott<strong>on</strong> processing has become a<br />
top ec<strong>on</strong>omic priority. Textile producti<strong>on</strong> provides <strong>on</strong>e-fifth <str<strong>on</strong>g>of</str<strong>on</strong>g> GNP and<br />
employs <strong>on</strong>e-third <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> workforce.<br />
Incentives for foreign investors include pr<str<strong>on</strong>g>of</str<strong>on</strong>g>it tax and property tax<br />
exempti<strong>on</strong>s, as well as deep discounts <strong>on</strong> local cott<strong>on</strong>. Direct investments are<br />
exempted from income and value added taxes, and investors may use<br />
combined forms <str<strong>on</strong>g>of</str<strong>on</strong>g> payment to purchase existing plants from <str<strong>on</strong>g>the</str<strong>on</strong>g> government:<br />
hard currency, local currency and technology transfers. The government is<br />
eager to address even minor cott<strong>on</strong> quality problems experienced by foreign<br />
investors. Since Kabul textile first came to Uzbekistan 7 yeas ago, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
discounts <strong>on</strong> cott<strong>on</strong> have fallen slightly, but o<str<strong>on</strong>g>the</str<strong>on</strong>g>r support is as good as ever.<br />
The company has assurances from <str<strong>on</strong>g>the</str<strong>on</strong>g> government that cott<strong>on</strong> discounts and<br />
o<str<strong>on</strong>g>the</str<strong>on</strong>g>r support will c<strong>on</strong>tinue for many years. Uzbek cott<strong>on</strong> farmers use<br />
relatively high rates <str<strong>on</strong>g>of</str<strong>on</strong>g> seed-some 60 to 80 kg/ha versus 15 kg/ha in Australia<br />
and <str<strong>on</strong>g>the</str<strong>on</strong>g> United States. They face a relatively short planting seas<strong>on</strong>, have linty<br />
seeds that stick toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r during handling and planting, salty land in many<br />
areas, and lack efficient planting equipment, all <str<strong>on</strong>g>of</str<strong>on</strong>g> which makes planting<br />
risky.<br />
There are also problems with <str<strong>on</strong>g>the</str<strong>on</strong>g> seed distributi<strong>on</strong> system. The Ministry <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Agriculture and Water Resources coordinates how much and what variety <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
seed is needed in which regi<strong>on</strong>s, and seed is distributed accordingly to<br />
regi<strong>on</strong>al authorities. Unfortunately, <str<strong>on</strong>g>the</str<strong>on</strong>g>re have been problems with mixed<br />
seed and availability. The Central Asian Seed Company (CASC) was<br />
established in Uzbekistan in 1998, as part <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> World Bank project to<br />
improve <str<strong>on</strong>g>the</str<strong>on</strong>g> local cott<strong>on</strong> seed market. With acid de-linted cott<strong>on</strong> seed and<br />
precisi<strong>on</strong> planters, CASC farms have reduced <str<strong>on</strong>g>the</str<strong>on</strong>g>ir seeding rates to about 20<br />
kg/ha. Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r important recent development that will lead to lower seeding<br />
rates is planting under plastid cover. This allows for earlier crop<br />
establishment and protecti<strong>on</strong> from wea<str<strong>on</strong>g>the</str<strong>on</strong>g>r during <str<strong>on</strong>g>the</str<strong>on</strong>g> initial growth phase.<br />
The practice has raised returns by 25 to 30 percent and over <str<strong>on</strong>g>the</str<strong>on</strong>g> past two<br />
years, <str<strong>on</strong>g>the</str<strong>on</strong>g> area cultivated under plastic has increased by 144 percent. Fertilize<br />
and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r inputs intended for cott<strong>on</strong> fields are being diverted to o<str<strong>on</strong>g>the</str<strong>on</strong>g>r, more<br />
pr<str<strong>on</strong>g>of</str<strong>on</strong>g>itable uses, including smuggling across <str<strong>on</strong>g>the</str<strong>on</strong>g> border. Uzbekistan does not<br />
currently plant biotech cott<strong>on</strong>, but is studying <str<strong>on</strong>g>the</str<strong>on</strong>g> technology very closely.<br />
Typically, Uzbek gins have a relatively low outturn ratio (about 32 percent,<br />
compared to 35-.36 percent in <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. and about 40 percent in West Africa),<br />
118
and gin approximately six bales/hour <strong>on</strong> old soviet equipment (versus 25-35<br />
bales/hour in <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S.). Presently more than 80 percent <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> ginning<br />
equipment dates to Soviet times. Cott<strong>on</strong> is transported five t<strong>on</strong>s at a time in<br />
tractor-pulled buggies. Storage areas may be up to 15 km from <str<strong>on</strong>g>the</str<strong>on</strong>g> farm, and<br />
gins may be 10 km from <str<strong>on</strong>g>the</str<strong>on</strong>g> storage area. Huge hills <str<strong>on</strong>g>of</str<strong>on</strong>g> approximately 300<br />
t<strong>on</strong>s are c<strong>on</strong>structed in storage areas. Because ginning equipment is <str<strong>on</strong>g>of</str<strong>on</strong>g> poor<br />
quality, <str<strong>on</strong>g>the</str<strong>on</strong>g> hills are necessary to allow <str<strong>on</strong>g>the</str<strong>on</strong>g> seed to harden. After maturing,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> is transported to a gin where new hills are c<strong>on</strong>structed. Because <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
handling is so slow, gins could not operate any faster even if <str<strong>on</strong>g>the</str<strong>on</strong>g>y were better<br />
equipped. By c<strong>on</strong>trast, <str<strong>on</strong>g>the</str<strong>on</strong>g> CASC hauls 15 t<strong>on</strong>s at a time in <str<strong>on</strong>g>the</str<strong>on</strong>g> form <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
modules and gins 22bales/hour <strong>on</strong> modern American equipment. Clearly,<br />
adopti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> module building and hauling technology (CASC currently has <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
<strong>on</strong>ly such equipment in Uzbekistan) accompanied with gin modernizati<strong>on</strong><br />
will lead to faster, cheaper cott<strong>on</strong> producti<strong>on</strong> and will greatly increase<br />
processing capacity.<br />
In <str<strong>on</strong>g>the</str<strong>on</strong>g> past, Uzbekistan’s classing system was very different from that <str<strong>on</strong>g>of</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
major exporting countries. The old method s was labor intensive and <strong>on</strong>ly 10<br />
percent <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> was classed. Too many fiber characteristics resulted in<br />
unnecessary discounts, and traders made a fortune re-classing and selling at<br />
higher prices. In a 1993 trial using USDA standards, cott<strong>on</strong> got $ 150 more<br />
per t<strong>on</strong>. By 1995, new standards were widely adopted similar to U.S.<br />
standards. As in <str<strong>on</strong>g>the</str<strong>on</strong>g> United States, <str<strong>on</strong>g>the</str<strong>on</strong>g>re are five color grades, and trash<br />
grades with each color grade. SIFAT (<str<strong>on</strong>g>the</str<strong>on</strong>g> certificati<strong>on</strong> agency) was<br />
established in 1999 as part <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> World Bank project, and runs an operati<strong>on</strong><br />
very much like <str<strong>on</strong>g>the</str<strong>on</strong>g> USDA system. Classers are trained in both USDA and<br />
Uzbek standards, which are easily comparable. They work in pair to reduce<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> likelihood <str<strong>on</strong>g>of</str<strong>on</strong>g> unintenti<strong>on</strong>al and intenti<strong>on</strong>al errors. Five percent <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong><br />
classed using HVI equipment in 13 labs across <str<strong>on</strong>g>the</str<strong>on</strong>g> country is rechecked in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
central lab; samples are kept for three m<strong>on</strong>ths, and a central database is<br />
accessible for a fee. Until this year, technical data was not very c<strong>on</strong>cise;<br />
sometimes, buyers would reject <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> at <str<strong>on</strong>g>the</str<strong>on</strong>g> ports, and prices would have<br />
to be reduced in order to move <str<strong>on</strong>g>the</str<strong>on</strong>g> lots. SIFAT has solved this problem by<br />
obtaining a government requirement for 100 percent classing, which means<br />
that customs cannot let cott<strong>on</strong> leave <str<strong>on</strong>g>the</str<strong>on</strong>g> country unless it has a SIFAT tag.<br />
Today, almost no cott<strong>on</strong> is rejected at <str<strong>on</strong>g>the</str<strong>on</strong>g> ports, which has resulted in higher<br />
prices. Solving this problem was worth $80 milli<strong>on</strong> according to SIFAT.<br />
In c<strong>on</strong>clusi<strong>on</strong>, we should not doubt Uzbekistan’s competitiveness in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
internati<strong>on</strong>al textile market, nor should we underestimate <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s<br />
potential to increase cott<strong>on</strong> producti<strong>on</strong> and improve <str<strong>on</strong>g>the</str<strong>on</strong>g> competitiveness <str<strong>on</strong>g>of</str<strong>on</strong>g> its<br />
raw cott<strong>on</strong> exports. At present, no <strong>on</strong>e knows exactly how <str<strong>on</strong>g>the</str<strong>on</strong>g> recent reform<br />
119
policies-especially <str<strong>on</strong>g>the</str<strong>on</strong>g> “farmers” 50 percent” rule and <str<strong>on</strong>g>the</str<strong>on</strong>g> “independence” <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> state cott<strong>on</strong> export companies-will work in practice. However, it appears<br />
that <str<strong>on</strong>g>the</str<strong>on</strong>g> government <str<strong>on</strong>g>of</str<strong>on</strong>g> Uzbekistan has finally committed to real steps towards<br />
liberalizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry. Over <str<strong>on</strong>g>the</str<strong>on</strong>g> next few years, developments in<br />
Uzbekistan will be closely followed.<br />
O<str<strong>on</strong>g>the</str<strong>on</strong>g>r Countries<br />
Countries that <str<strong>on</strong>g>of</str<strong>on</strong>g>fered emergency assistance due to lower prices in 2001/02<br />
are not providing direct income or price support this seas<strong>on</strong>. Notably, in India<br />
and Colombia, countries that have a minimum support price mechanism in<br />
place, market prices were above minimum support prices in 2002/03 and no<br />
assistance was <str<strong>on</strong>g>of</str<strong>on</strong>g>fered.<br />
Direct Assistance to Exports<br />
China (Mainland) and <str<strong>on</strong>g>the</str<strong>on</strong>g> USA provide subsidies to exports <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>.<br />
Overall assistance provided by <str<strong>on</strong>g>the</str<strong>on</strong>g>se two countries amounted to US$121<br />
milli<strong>on</strong> in 2001/02, and is estimated at US$ 317 milli<strong>on</strong> in 2002/03. Exports<br />
are subsidized in China (Mainland) through direct payments made by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
central government to exporting agencies. The direct payments are designed<br />
to bridge <str<strong>on</strong>g>the</str<strong>on</strong>g> difference between internati<strong>on</strong>al market prices and <str<strong>on</strong>g>the</str<strong>on</strong>g> internal<br />
cost <str<strong>on</strong>g>of</str<strong>on</strong>g> buying, ginning and transporting cott<strong>on</strong> to an export locati<strong>on</strong>.<br />
Assistance in <str<strong>on</strong>g>the</str<strong>on</strong>g> USA averaged 2 U S. cents per pound in 2001/02. Between<br />
August 2002 and 21 March 2003, <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. government disbursed US$65<br />
milli<strong>on</strong> to exporters under <str<strong>on</strong>g>the</str<strong>on</strong>g> Step 2 program, and <str<strong>on</strong>g>the</str<strong>on</strong>g> total disbursement for<br />
2002/03 is estimated at US$267 milli<strong>on</strong>, for an average assistance <str<strong>on</strong>g>of</str<strong>on</strong>g> U.S.<br />
cents per pound exported. In 2003-04 <str<strong>on</strong>g>the</str<strong>on</strong>g> average assistance was around 2<br />
cent per pound for milli<strong>on</strong> staple cott<strong>on</strong>. For PIMA variety <str<strong>on</strong>g>the</str<strong>on</strong>g> subsidy varied<br />
from 4 to 28 cents per pound and under <str<strong>on</strong>g>the</str<strong>on</strong>g> step 2 programme every Thursday<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>se subsidies are announced. On 8 th April <str<strong>on</strong>g>the</str<strong>on</strong>g> subsidy was 22.39 cents per<br />
pound <strong>on</strong> PIMA exports.<br />
IV. ENHANCING EFFICIENCY AND PRODUCTIVITY IN THE<br />
COTTON SECTOR IN ASIA<br />
The major cott<strong>on</strong> producing countries are Pakistan, Uzbekistan, Tajikistan<br />
and Syria in IDB member countries. Cott<strong>on</strong> is generally planted after<br />
harvesting <str<strong>on</strong>g>the</str<strong>on</strong>g> wheat crop. The planting time <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> is affected if wheat<br />
harvesting is delayed. Recently sunflower, soybean and canola are also being<br />
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used in cott<strong>on</strong> rotati<strong>on</strong>. The cott<strong>on</strong> plant is indeterminate in nature and thus<br />
has a huge potential to produce a higher yield. Higher yields achieved in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
world have come from agr<strong>on</strong>omic and protecti<strong>on</strong> improvements and not from<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> ability <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> plant to produce a higher yield. The indeterminate nature <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> plant enables this plant to produce at much higher yields than<br />
before. Cott<strong>on</strong> yields have undoubtedly increased in <str<strong>on</strong>g>the</str<strong>on</strong>g> world particularly<br />
since 1952-1991. During this period, <str<strong>on</strong>g>the</str<strong>on</strong>g> average increase in yield is<br />
estimated at 2 % or 8kgs per hectare per year. Most <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> crop is<br />
planted after wheat in Pakistan.<br />
1. Breeding<br />
C<strong>on</strong>venti<strong>on</strong>al breeding is generally based <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> art <str<strong>on</strong>g>of</str<strong>on</strong>g> selecting <str<strong>on</strong>g>the</str<strong>on</strong>g> most<br />
suitable plant after making cross breeding. More recently genetic engineering<br />
is becoming <str<strong>on</strong>g>the</str<strong>on</strong>g> major source <str<strong>on</strong>g>of</str<strong>on</strong>g> plant breeding. Breeders will have to share<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> credit for <str<strong>on</strong>g>the</str<strong>on</strong>g> so called development <str<strong>on</strong>g>of</str<strong>on</strong>g> higher yielding varieties with<br />
biotechnologist. C<strong>on</strong>tributi<strong>on</strong>s from genetic engineering will be undeniable.<br />
C<strong>on</strong>venti<strong>on</strong>al breeding will c<strong>on</strong>tinue to play <str<strong>on</strong>g>the</str<strong>on</strong>g> dominant role but specific<br />
changes through inserti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> specific genes will be prominent. The science <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
genetic engineering is going to play a major role in developing a cott<strong>on</strong> plant<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> desired characteristics.<br />
Countries like <str<strong>on</strong>g>the</str<strong>on</strong>g> USA, India, China, Australia, Brazil and South Africa have<br />
already introduced genetically modified Bt cott<strong>on</strong> <strong>on</strong> a larger scale. At<br />
present, about 11 milli<strong>on</strong> hectors are under Bt cott<strong>on</strong> all over <str<strong>on</strong>g>the</str<strong>on</strong>g> world. This<br />
has reduced <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> and increased <str<strong>on</strong>g>the</str<strong>on</strong>g> yield and pr<str<strong>on</strong>g>of</str<strong>on</strong>g>it <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
farmers. The uses <str<strong>on</strong>g>of</str<strong>on</strong>g> insecticides in <str<strong>on</strong>g>the</str<strong>on</strong>g>se countries have been reduced. This<br />
field has not received due importance in <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB member countries in Asia<br />
compared to developed countries. The pace <str<strong>on</strong>g>of</str<strong>on</strong>g> progress in <str<strong>on</strong>g>the</str<strong>on</strong>g> development <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Bt cott<strong>on</strong> in Pakistan is very slow. The private sector in Pakistan has not<br />
taken any interest in <str<strong>on</strong>g>the</str<strong>on</strong>g> development <str<strong>on</strong>g>of</str<strong>on</strong>g> varieties resistance to insecticides.<br />
These countries must invest in genetic engineering because <str<strong>on</strong>g>of</str<strong>on</strong>g> its bright<br />
future.<br />
2. Insect C<strong>on</strong>trol<br />
Insecticides have become an integral part <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> systems in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> world. One cannot think <str<strong>on</strong>g>of</str<strong>on</strong>g> having a successful cott<strong>on</strong> crop without <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
extensive use <str<strong>on</strong>g>of</str<strong>on</strong>g> insecticides. Insecticides are quick in acti<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g>y kill<br />
insects as <str<strong>on</strong>g>the</str<strong>on</strong>g> crop develops. Insecticides are cost affected. Cott<strong>on</strong> producti<strong>on</strong><br />
systems cannot afford c<strong>on</strong>tinued increases in <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> insecticides. Insects<br />
are developing resistance and adding to <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> spraying in countries like<br />
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Pakistan whose efficiency in <str<strong>on</strong>g>the</str<strong>on</strong>g> use <str<strong>on</strong>g>of</str<strong>on</strong>g> pesticides is just 50% because <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
defective applicati<strong>on</strong>, lack <str<strong>on</strong>g>of</str<strong>on</strong>g> calibrati<strong>on</strong>, wr<strong>on</strong>g pesticides, untimely<br />
applicati<strong>on</strong> etc., Moreover pressure is building up against <str<strong>on</strong>g>the</str<strong>on</strong>g> residue <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
pesticides <strong>on</strong> cott<strong>on</strong> and c<strong>on</strong>sumers from developed countries are reluctant to<br />
use lint c<strong>on</strong>taminated with pesticides.<br />
3. Applicati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Fertilizer<br />
The efficiency <str<strong>on</strong>g>of</str<strong>on</strong>g> availability <str<strong>on</strong>g>of</str<strong>on</strong>g> fertilizer can be enhanced by placing <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
fertilizer near <str<strong>on</strong>g>the</str<strong>on</strong>g> root system. The practice <str<strong>on</strong>g>of</str<strong>on</strong>g> applying fertilizer with<br />
irrigati<strong>on</strong> water has shown that majority <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> fertilizers is not availed by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
plant because <str<strong>on</strong>g>of</str<strong>on</strong>g> misplacement. The best way to apply <str<strong>on</strong>g>the</str<strong>on</strong>g> fertilizer is after<br />
irrigati<strong>on</strong> in moist soil and placing <str<strong>on</strong>g>the</str<strong>on</strong>g> fertilizer near to <str<strong>on</strong>g>the</str<strong>on</strong>g> roots <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> plants.<br />
This will help to increase <str<strong>on</strong>g>the</str<strong>on</strong>g> yield <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>.<br />
4. C<strong>on</strong>taminati<strong>on</strong> Free Cott<strong>on</strong><br />
At present Pakistani cott<strong>on</strong> is graded as <str<strong>on</strong>g>the</str<strong>on</strong>g> most c<strong>on</strong>taminated and hence<br />
discounted. The c<strong>on</strong>taminati<strong>on</strong> includes poly-propylene, plastic sheets,<br />
human hair, biscuits raps, jute strings etc., etc. The government is now giving<br />
encompasses <strong>on</strong> c<strong>on</strong>taminati<strong>on</strong> free cott<strong>on</strong> by <str<strong>on</strong>g>the</str<strong>on</strong>g> promulgati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> ordinance.<br />
C<strong>on</strong>taminati<strong>on</strong> free cott<strong>on</strong> will fetch a high price and more pr<str<strong>on</strong>g>of</str<strong>on</strong>g>it to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
farmers.<br />
5. Irrigati<strong>on</strong><br />
Due to a shortage <str<strong>on</strong>g>of</str<strong>on</strong>g> water in <str<strong>on</strong>g>the</str<strong>on</strong>g> future, <str<strong>on</strong>g>the</str<strong>on</strong>g> agr<strong>on</strong>omy <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> plant has to be<br />
restructured by manipulating planting methods, plant type, resistance to insect<br />
c<strong>on</strong>trol etc. During <str<strong>on</strong>g>the</str<strong>on</strong>g> year, <str<strong>on</strong>g>the</str<strong>on</strong>g>re are certain periods when water is abundant<br />
and can be stored to meet urgent needs <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> plant. The cott<strong>on</strong> plant<br />
uses a minimum amount <str<strong>on</strong>g>of</str<strong>on</strong>g> water am<strong>on</strong>g all <str<strong>on</strong>g>the</str<strong>on</strong>g> cash crops and hence is<br />
extremely suitable in water deficient areas. The government is encouraging<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> planting <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> <strong>on</strong> beds to maximize irrigati<strong>on</strong> efficiency.<br />
6. Yields<br />
There is a large scope for <str<strong>on</strong>g>the</str<strong>on</strong>g> improvement <str<strong>on</strong>g>of</str<strong>on</strong>g> yields in countries like Pakistan<br />
and Uzbekistan. The yield can be increased by adopting proper agr<strong>on</strong>omic<br />
practices, judicious use <str<strong>on</strong>g>of</str<strong>on</strong>g> agro chemicals and str<strong>on</strong>g pest scouting servos to<br />
make a timely decisi<strong>on</strong> <strong>on</strong> pest c<strong>on</strong>trol and its evaluati<strong>on</strong>.<br />
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V. ENHANCING COMPETITIVENESS IN COTTON SECTOR IN<br />
ASIA<br />
1. Competiti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> with O<str<strong>on</strong>g>the</str<strong>on</strong>g>r Crops.<br />
Cott<strong>on</strong> crops face competiti<strong>on</strong> for labor and time from sugarcane, rice and<br />
maize. This competiti<strong>on</strong> is acute during <str<strong>on</strong>g>the</str<strong>on</strong>g> m<strong>on</strong>ths <str<strong>on</strong>g>of</str<strong>on</strong>g> August and September<br />
when plant protecti<strong>on</strong> and fertilizer applicati<strong>on</strong>s are made. On <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r hand,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> demand for labor during <str<strong>on</strong>g>the</str<strong>on</strong>g>se m<strong>on</strong>ths for rice and maize is also at a<br />
maximum, as transplanting <str<strong>on</strong>g>of</str<strong>on</strong>g> rice, fertilizer applicati<strong>on</strong>, granule applicati<strong>on</strong><br />
and thinning <str<strong>on</strong>g>of</str<strong>on</strong>g> maize are d<strong>on</strong>e during <str<strong>on</strong>g>the</str<strong>on</strong>g> m<strong>on</strong>ths <str<strong>on</strong>g>of</str<strong>on</strong>g> August and September.<br />
If we can mechanize <str<strong>on</strong>g>the</str<strong>on</strong>g> competing labor intensive operati<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> maize and<br />
rice, this will result in more availability <str<strong>on</strong>g>of</str<strong>on</strong>g> labor for plant protecti<strong>on</strong>, fertilizer<br />
applicati<strong>on</strong>s and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r crucial cott<strong>on</strong> operati<strong>on</strong>s during <str<strong>on</strong>g>the</str<strong>on</strong>g> m<strong>on</strong>ths <str<strong>on</strong>g>of</str<strong>on</strong>g> August<br />
and September. Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r severe competiti<strong>on</strong> is during <str<strong>on</strong>g>the</str<strong>on</strong>g> m<strong>on</strong>th <str<strong>on</strong>g>of</str<strong>on</strong>g> May when<br />
harvesting <str<strong>on</strong>g>of</str<strong>on</strong>g> spring maize, hoeing, <str<strong>on</strong>g>the</str<strong>on</strong>g> applicati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> fertilizers and<br />
pesticides to <str<strong>on</strong>g>the</str<strong>on</strong>g> sugarcane crop give serious competiti<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> labor required<br />
for seed bed preparati<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> sowing <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>. Wheat harvesting and<br />
threshing during <str<strong>on</strong>g>the</str<strong>on</strong>g> m<strong>on</strong>ths <str<strong>on</strong>g>of</str<strong>on</strong>g> April and May adds serious competiti<strong>on</strong> to<br />
cott<strong>on</strong> labor, during this period <str<strong>on</strong>g>the</str<strong>on</strong>g> seed bed preparati<strong>on</strong> and sowing<br />
operati<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> are in progress. Weed c<strong>on</strong>trol during <str<strong>on</strong>g>the</str<strong>on</strong>g> m<strong>on</strong>th <str<strong>on</strong>g>of</str<strong>on</strong>g> July<br />
faces competiti<strong>on</strong> from o<str<strong>on</strong>g>the</str<strong>on</strong>g>r cott<strong>on</strong> operati<strong>on</strong>s like gap filling, fertilizer<br />
applicati<strong>on</strong> and thinning. Competiti<strong>on</strong> from rice and maize is acute where<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>se two crops are grown in larger areas. Competiti<strong>on</strong> from sugarcane is<br />
str<strong>on</strong>g where sugar mills are located and where, sugarcane is <str<strong>on</strong>g>the</str<strong>on</strong>g> main crop.<br />
Competiti<strong>on</strong> for wheat is throughout <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> belt because it is grown<br />
throughout <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> producing area. In <str<strong>on</strong>g>the</str<strong>on</strong>g> central cott<strong>on</strong> z<strong>on</strong>e, where<br />
wheat-cott<strong>on</strong> is <str<strong>on</strong>g>the</str<strong>on</strong>g> main rotati<strong>on</strong> crop, competiti<strong>on</strong> from wheat for labor, etc.,<br />
becomes more prominent during <str<strong>on</strong>g>the</str<strong>on</strong>g> planting time <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> when tractor<br />
power is needed for tillage and sowing bed preparati<strong>on</strong>.<br />
In Pakistan, market outlets for cott<strong>on</strong> and alternate crops do not vary with <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
types <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> units (small or large scale holder). The entire cott<strong>on</strong><br />
produce goes to <str<strong>on</strong>g>the</str<strong>on</strong>g> ginning factory for marketing and <str<strong>on</strong>g>the</str<strong>on</strong>g> alternate crop goes<br />
to markets directed by <str<strong>on</strong>g>the</str<strong>on</strong>g> government where <str<strong>on</strong>g>the</str<strong>on</strong>g>y are sold <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> open<br />
market. Rice is generally grown in high rainfall areas not suitable for cott<strong>on</strong>.<br />
In <str<strong>on</strong>g>the</str<strong>on</strong>g> main cott<strong>on</strong> area, <strong>on</strong>ly sugarcane is <str<strong>on</strong>g>the</str<strong>on</strong>g> real competing crop where<br />
sugar mills have been installed and <str<strong>on</strong>g>the</str<strong>on</strong>g>re is no marketing problem for<br />
sugarcane. Cott<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g>ten replaces it due to less water requirements and<br />
because sugarcane is more labor and input intensive and is being supported<br />
artificially by a levying import duty <strong>on</strong> sugar. A tendency to grow sugarcane<br />
increases if cott<strong>on</strong> yields become low in certain areas due to disease/insect<br />
123
attack, etc. If <str<strong>on</strong>g>the</str<strong>on</strong>g> present water rate system is shifted from an area to a volume<br />
basis, farmers will prefer growing cott<strong>on</strong> as <str<strong>on</strong>g>the</str<strong>on</strong>g> delta <str<strong>on</strong>g>of</str<strong>on</strong>g> water for cott<strong>on</strong> is 2-<br />
3 times less than that <str<strong>on</strong>g>of</str<strong>on</strong>g> sugarcane.<br />
2. Competiti<strong>on</strong> within Cott<strong>on</strong> Sector<br />
Government measures that insulate producers form variati<strong>on</strong> in market prices<br />
are c<strong>on</strong>tributing to <str<strong>on</strong>g>the</str<strong>on</strong>g> current imbalance between <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> supply and<br />
demand in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. The level <str<strong>on</strong>g>of</str<strong>on</strong>g> direct assistance to cott<strong>on</strong> producti<strong>on</strong><br />
provided by different countries rose from US$ 3.8 billi<strong>on</strong> in 2000/01 to $5<br />
billi<strong>on</strong> in 2001/02. An estimated 73% <str<strong>on</strong>g>of</str<strong>on</strong>g> world cott<strong>on</strong> producti<strong>on</strong> benefited in<br />
2001 from a direct income or price support program. Many countries provide<br />
support in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector, and many countries provide support to an<br />
estimated 160 agricultural commodities besides cott<strong>on</strong>. The issue <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
agricultural support is complicated by <str<strong>on</strong>g>the</str<strong>on</strong>g> existence <str<strong>on</strong>g>of</str<strong>on</strong>g> state trading<br />
organizati<strong>on</strong>s, <str<strong>on</strong>g>the</str<strong>on</strong>g> use <str<strong>on</strong>g>of</str<strong>on</strong>g> export credits and credit guarantees, tariffs and tariff<br />
rate quotas <strong>on</strong> agricultural products, food aid and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r agricultural issues.<br />
Fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r, many countries impose tariffs <strong>on</strong> textile and apparel products, and<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> quotas under <str<strong>on</strong>g>the</str<strong>on</strong>g> Multi Fiber Arrangement (MFA) are still being phased<br />
out. Therefore, negotiati<strong>on</strong>s to reduce government measures in cott<strong>on</strong> involve<br />
complex trade<str<strong>on</strong>g>of</str<strong>on</strong>g>fs, and <str<strong>on</strong>g>the</str<strong>on</strong>g> mechanism to achieve reducti<strong>on</strong>s in trade<br />
distorting subsidies and tariffs is <str<strong>on</strong>g>the</str<strong>on</strong>g> discussi<strong>on</strong> <strong>on</strong> agriculture in <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO.<br />
The WTO is <str<strong>on</strong>g>the</str<strong>on</strong>g> sum <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> countries that participate in it. In order to advance<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> interests <str<strong>on</strong>g>of</str<strong>on</strong>g> agricultural trade liberalizati<strong>on</strong>, countries must unify and work<br />
effectively to articulate a positive program <str<strong>on</strong>g>of</str<strong>on</strong>g> mutual benefit during <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
agriculture talks being c<strong>on</strong>ducted under <str<strong>on</strong>g>the</str<strong>on</strong>g> auspices <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO. Cott<strong>on</strong> is<br />
an important agricultural commodity, and <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>cerns <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> merit<br />
attenti<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO. The decline in cott<strong>on</strong> prices during 2001/02 led to<br />
direct losses <str<strong>on</strong>g>of</str<strong>on</strong>g> $14 billi<strong>on</strong> in income to <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector. Income from cott<strong>on</strong><br />
provides m<strong>on</strong>ey for school fees, rural transportati<strong>on</strong> and health care for farm<br />
families in many developing countries. More than 100 milli<strong>on</strong> farming units<br />
are engaged directly in cott<strong>on</strong> producti<strong>on</strong>, and when family labor, hired farm<br />
labor, and workers in auxiliary services such as transportati<strong>on</strong> and ginning are<br />
c<strong>on</strong>sidered, total involvement in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector reaches <strong>on</strong>e billi<strong>on</strong> people.<br />
Cott<strong>on</strong> cultivati<strong>on</strong> c<strong>on</strong>tributes to food security and improved life expectancy<br />
in rural areas <str<strong>on</strong>g>of</str<strong>on</strong>g> developing countries.<br />
In January 2005, cott<strong>on</strong> will be in traded freely because <str<strong>on</strong>g>of</str<strong>on</strong>g> WTO. Pakistan<br />
will gain in all textile products because most <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> competing countries are<br />
subsidizing <str<strong>on</strong>g>the</str<strong>on</strong>g>ir industry and Pakistan has already removed all subsidies<br />
since 1996. Pakistan will see a boom in exports and will become <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
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top foreign exchange earners in cott<strong>on</strong> trade. The potential <str<strong>on</strong>g>of</str<strong>on</strong>g> value additi<strong>on</strong><br />
in Pakistan for <str<strong>on</strong>g>the</str<strong>on</strong>g> year 2008 is given in table 4. The top ten Asian countries<br />
in cott<strong>on</strong> trade are given in table 6. Due to free trade from January 2005, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
most subsidized country will not lead. Cott<strong>on</strong> producers like Pakistan will<br />
also become a main foreign exchange earner. The success factor will be free<br />
trade, higher technological orbit, human resource development, a shifting<br />
focus to value added products, development <str<strong>on</strong>g>of</str<strong>on</strong>g> internati<strong>on</strong>al standard cott<strong>on</strong>,<br />
no subsidies and emphasis <strong>on</strong> man made fibres.<br />
VI. ROLE OF PRIVATE SECTOR IN COTTON SECTOR IN ASIA<br />
The role <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> ec<strong>on</strong>omy is extremely important<br />
because <str<strong>on</strong>g>the</str<strong>on</strong>g> public sector can not compete in <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market<br />
efficiently. The private sector is now becoming more resp<strong>on</strong>sible and mature<br />
and has <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>fidence to make fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r investments. Even in 100 % public<br />
sector countries like Syria and Uzbekistan, <str<strong>on</strong>g>the</str<strong>on</strong>g> policies are now changing in<br />
favour <str<strong>on</strong>g>of</str<strong>on</strong>g> privatizati<strong>on</strong>. To encourage <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector, <str<strong>on</strong>g>the</str<strong>on</strong>g> government<br />
should issue guidelines <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> minimum export price <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> products so that<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> mall practices in <str<strong>on</strong>g>the</str<strong>on</strong>g> trade are minimized. The cott<strong>on</strong> grading system and<br />
its applicati<strong>on</strong> in export can eliminate mall practices in cott<strong>on</strong> trade. The<br />
government should also try to facilitate <str<strong>on</strong>g>the</str<strong>on</strong>g> investment in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector by<br />
eliminating red tape and making it a <strong>on</strong>e window operati<strong>on</strong>. For example, in<br />
Pakistan <str<strong>on</strong>g>the</str<strong>on</strong>g>re are 22 departments dealing with <str<strong>on</strong>g>the</str<strong>on</strong>g> textile industry and trade<br />
every department has a different price. This discourages <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector to<br />
invest and competiti<strong>on</strong> to produce quality. The recent steps taken by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
government to reduce <str<strong>on</strong>g>the</str<strong>on</strong>g> mark up <str<strong>on</strong>g>of</str<strong>on</strong>g> banks will definitely encourage <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
private sector to invest in cott<strong>on</strong>.<br />
VII. FRAMEWORK FOR ENHANCING COOPERATION AMONG<br />
IDB COTTON PRODUCING COUNTRIES FROM THE ASIAN<br />
REGION<br />
There is a good opportunity for cooperati<strong>on</strong> am<strong>on</strong>g IDB cott<strong>on</strong> producing<br />
countries from Asian regi<strong>on</strong>. These countries scan share <str<strong>on</strong>g>the</str<strong>on</strong>g> knowledge <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
crop producti<strong>on</strong>, pest management, textiles and marketing. Cott<strong>on</strong> is grown in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>se countries in varied climates and hence can be helpful in providing<br />
training to o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries. Similarly, <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omic cooperative organizati<strong>on</strong><br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> CIS countries will benefit Pakistan, Iran and Turkey and is a good<br />
beginning <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>se lines. Some <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> suggesti<strong>on</strong>s to enhance cooperati<strong>on</strong> are:<br />
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1. Trading House<br />
A cott<strong>on</strong> trading house may be established at appropriate places to encourage<br />
cott<strong>on</strong> export. Recently, Pakistan has announced <str<strong>on</strong>g>the</str<strong>on</strong>g> establishment <str<strong>on</strong>g>of</str<strong>on</strong>g> textile<br />
cities in Karachi and Lahore to promote textile made ups in Internati<strong>on</strong>al<br />
trade. The trading house may be a step in this directi<strong>on</strong>.<br />
2. Ginning Research Institute<br />
There are no training facilities in Asia in <str<strong>on</strong>g>the</str<strong>on</strong>g> field <str<strong>on</strong>g>of</str<strong>on</strong>g> ginning. This needs<br />
improvement. Most <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> in Pakistan, Uzbekistan and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r states are<br />
discounted in <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market because <str<strong>on</strong>g>of</str<strong>on</strong>g> poor ginning. The<br />
establishment <str<strong>on</strong>g>of</str<strong>on</strong>g> a ginning research institute will provide training and<br />
improve ginning machinery. The problem <str<strong>on</strong>g>of</str<strong>on</strong>g> lint c<strong>on</strong>taminati<strong>on</strong> can also be<br />
over come through a ginning research institute.<br />
3. Cott<strong>on</strong> Grading Facilities<br />
There is no well established cott<strong>on</strong> grading training facility in <str<strong>on</strong>g>the</str<strong>on</strong>g> Asian<br />
regi<strong>on</strong>. N<strong>on</strong>- cott<strong>on</strong> producing countries like Germany and England are<br />
provided this training at a very high price. This facility can easily be<br />
established which will provide training in grading and act as an arbitrator in<br />
internati<strong>on</strong>al trade.<br />
4. Gene Pool Exchange<br />
Excellent material for cott<strong>on</strong> breeding is available in countries like<br />
Uzbekistan which some times becomes difficult to get for research purposes<br />
due to poor communicati<strong>on</strong>. If such a facility is established under an<br />
internati<strong>on</strong>al organizati<strong>on</strong>, than many o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries can benefit from this<br />
gene pool.<br />
5. Informati<strong>on</strong> Centre<br />
Informati<strong>on</strong> <strong>on</strong> all aspects <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> research, producti<strong>on</strong> marketing and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
textile industry may be made available am<strong>on</strong>gst participating cott<strong>on</strong> growing<br />
countries in Asia. For this purpose, research journals and newletters may be<br />
published or <str<strong>on</strong>g>the</str<strong>on</strong>g> informati<strong>on</strong> for <str<strong>on</strong>g>the</str<strong>on</strong>g>ir research workers and people involved<br />
in business. Australian cott<strong>on</strong> growers are a good example <str<strong>on</strong>g>of</str<strong>on</strong>g> serving <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
cott<strong>on</strong> industry in that country.<br />
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Table 1. Cott<strong>on</strong> Area, Producti<strong>on</strong> and Yield in <strong>Islamic</strong> Countries in Asia<br />
Countries<br />
Source: ICAC<br />
Area (1000 hectares) Producti<strong>on</strong> (1000 t<strong>on</strong>s) Yield (kg/ha)<br />
2002 2003 2002 2003 2002 2003<br />
Pakistan 2718 3037 1700 1615 625 532<br />
Uzbekistan 1421 1393 1033 915 727 657<br />
Syria 186 203 245 277 1318 1364<br />
Turkmenistan 500 500 148 200 296 400<br />
Tajikistan 269 285 165 172 613 604<br />
Kazakhstan 165 185 114 120 691 649<br />
Iran 160 145 90 100 562 690<br />
Azerbaijan 62 55 31 37 500 673<br />
Kyrgystan 28 32 25 29 900 906<br />
Bangladesh 48 50 15 15 317 300<br />
Iraq 55 20 19 7 519 350<br />
Afghanistan 20 20 7 7 367 367<br />
Ind<strong>on</strong>esia 9 10 5 5 534 537<br />
Total 5141 5935 3607 3499 639 589<br />
World 30020 32542 19142 20112 638 618<br />
% <str<strong>on</strong>g>of</str<strong>on</strong>g> world 18.8 18.2 18.8 17.4 100 95.3<br />
́<br />
Table 2. Level <str<strong>on</strong>g>of</str<strong>on</strong>g> Direct Assistance Provided by Governments<br />
to The Cott<strong>on</strong> Sector Through Producti<strong>on</strong> Programs *<br />
Country<br />
2001/02<br />
2002/03*<br />
Exports Average Assistance to Exports Average Assistance<br />
(1000 t<strong>on</strong>s) Assistance Export (1000 t<strong>on</strong>s) Assistance Export (US<br />
per Pound (US$ Milli<strong>on</strong>s)<br />
per Pound Milli<strong>on</strong>s)<br />
Exported<br />
Exported<br />
(US cents)<br />
(US cents)<br />
USA 4,420 31 3,001 3,747 24 1,996<br />
China<br />
(Mainland)<br />
5,320 10 1,196 4,920 7 750<br />
Greece 435 77 735 370 88 718<br />
Spain 107 104 245 100 108 239<br />
Turkey 922 3 59 900 3 57<br />
Egypt 317 3 23 291 5 33<br />
Côte<br />
d́ ‘Ivoire<br />
173 2 8 150 4 14<br />
Mexico 92 9 18 41 8 7<br />
India 2,686 8 500<br />
Benin 172 5 20<br />
Mali 240 3 14<br />
Brazil 766 1 10<br />
Colombia 26 16 9<br />
Argentina 65 5 7<br />
All<br />
Countries<br />
15,741 17 5,844 10,519 16 3,814<br />
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Table 3. Potential <str<strong>on</strong>g>of</str<strong>on</strong>g> Value Additi<strong>on</strong> in Pakistan Target up to Year 2008<br />
Textile Sectors Projected for year-<br />
2004 (US $)<br />
Percentage<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> Export<br />
128<br />
Projected Export<br />
Potential (US$)<br />
Total Export<br />
(US $)<br />
Cott<strong>on</strong> Yarn 931.82 12.25 931.82<br />
Cott<strong>on</strong> Fabric 1,467.46 19.29 1,467.46<br />
Knitwear (Hosiery) 1,407.26 18.50 2,703.21 4,110.47<br />
Bed wear 1,355.18 17.81 2,603.17 3,958.35<br />
Towels 364.70 4.79 700.56 1,065.26<br />
Ready Made Garments 1,037.57 13.64 1,993.06 3,030.63<br />
Art Silk and<br />
Syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic<br />
564.82 7.42 564.82<br />
Tents and Canvas 50.14 0.66 50.14<br />
Made-up Articles<br />
(Including o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
Textiles)<br />
429.34 5.64 429.34<br />
Total $7,608.29 $8,000.00 $15,608.29<br />
Source: SMEDA-cott<strong>on</strong> textile visi<strong>on</strong> 2005<br />
Rank Country Total<br />
1 China 39,485<br />
2 Korea 15,577<br />
3 H<strong>on</strong>g K<strong>on</strong>g 10,980<br />
4 Turkey 9,900<br />
5 India 9,275<br />
6 Japan 6,260<br />
7 Thailand 4,965<br />
8 Pakistan 4,897<br />
9 Ind<strong>on</strong>esia 4,862<br />
10 Bangladesh 3,571<br />
Source: SMEDA Textile visi<strong>on</strong><br />
Table 4. Top Ten Asian Countries<br />
1998 ($ Milli<strong>on</strong>)<br />
2005 ($ Milli<strong>on</strong>)<br />
Rank Country Total<br />
1 China 55,641<br />
2 India 21,533<br />
3 Korea 16,733<br />
4 Turkey 16,416<br />
5 Pakistan 13,815<br />
6 H<strong>on</strong>g K<strong>on</strong>g 10,611<br />
7 Bangladesh 6,581<br />
8 Thailand 5,083<br />
9 Japan 4,949<br />
10 Ind<strong>on</strong>esia 4,893
PART TWO<br />
COTTON PRODUCTION EFFICIENCY AND<br />
INTERNTIONAL COMPETITIVENESS<br />
129
130
COUNTRY EXPERIENCEES FROM THE<br />
AFRICAN REGION<br />
131
132
I. INTRODUCTION<br />
THE COTTON SECTOR IN BURKINA FASO<br />
Traore Seydou Naf<strong>on</strong>i<br />
The Burkinabe Textile Fibre Company<br />
133<br />
(Original in French)<br />
The ec<strong>on</strong>omy <str<strong>on</strong>g>of</str<strong>on</strong>g> Burkina Faso is mainly based <strong>on</strong> agriculture and animal<br />
husbandry, which toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r provide over 30% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> gross domestic product<br />
and account for 80% <str<strong>on</strong>g>of</str<strong>on</strong>g> exports. About 86% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> working populati<strong>on</strong> is<br />
employed in agriculture in animal husbandry and 5.8% in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r rural<br />
activities. Cott<strong>on</strong> occupies 5% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cultivated land area <str<strong>on</strong>g>of</str<strong>on</strong>g> Burkina Faso.<br />
Nearly 200,000 firms located in <str<strong>on</strong>g>the</str<strong>on</strong>g> west, centre and <str<strong>on</strong>g>the</str<strong>on</strong>g> east <str<strong>on</strong>g>of</str<strong>on</strong>g> country are<br />
used for cott<strong>on</strong> farming. Although <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> grain is affected<br />
by fluctuating rainfall and parasites, it rose from 100,000 t<strong>on</strong>s in 1985 to over<br />
500,000 in 2004. Cott<strong>on</strong> grain yield rose from 135 kgs per hectare <strong>on</strong><br />
average in 1960 to 1061 kilo grams per hectare in 2000. The fiber yield per<br />
hectare increased ten-fold during <str<strong>on</strong>g>the</str<strong>on</strong>g> same period. Thanks to greater farm<br />
productivity and a greater ginning rate. Cott<strong>on</strong> grain sales is <str<strong>on</strong>g>the</str<strong>on</strong>g> major source<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> revenue in rural areas. It is also <str<strong>on</strong>g>the</str<strong>on</strong>g> primary export <str<strong>on</strong>g>of</str<strong>on</strong>g> Burkina Faso i.e. it<br />
accounts for 50% to 60% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> country's hard currency.<br />
Figure 1. Share <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Exports in Burkina Faso Total Export
About 97% <str<strong>on</strong>g>of</str<strong>on</strong>g> fiber produced is exported to <str<strong>on</strong>g>the</str<strong>on</strong>g> following markets:<br />
• South East Asia (India, Thailand, Ind<strong>on</strong>esia, Vietnam, Taiwan): 66%,<br />
• Europe (Germany, Italy, Portugal, Switzerland): 21%,<br />
• Latin America (Colombia, Venezuela): 2%<br />
• The domestic market: 3%<br />
II. INTERNATIONAL SITUATION<br />
More than 50% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world's cott<strong>on</strong> comes from countries where its<br />
producti<strong>on</strong> is directly subsidized (USA, Greece, Brazil, Spain, Egypt, China,<br />
Turkey, Mexico). So market competiti<strong>on</strong> in cott<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> price adjustments<br />
between supply and demand are thwarted. Africa is <str<strong>on</strong>g>the</str<strong>on</strong>g>refore no l<strong>on</strong>ger rated<br />
am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> 5 cheapest sources <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> used to calculate <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Cotlook A index. This reflects <str<strong>on</strong>g>the</str<strong>on</strong>g> sale aggressiveness <str<strong>on</strong>g>of</str<strong>on</strong>g> competitors such as<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> Chinese, Uzbek, Greek Syrian and Spanish producers. Quality is more<br />
than ever before topical in such a very high competitive market. Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
important factor is <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>taminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> raw cott<strong>on</strong> by alien objects <str<strong>on</strong>g>the</str<strong>on</strong>g>reby<br />
prompting yarn and textile buyers to make claims. In order to stave <str<strong>on</strong>g>of</str<strong>on</strong>g>f such<br />
risks, weavers tend to prefer <str<strong>on</strong>g>the</str<strong>on</strong>g> sources <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> that are reputed to be<br />
unc<strong>on</strong>taminated, although very expensive. The Burkina cott<strong>on</strong> industry,<br />
which exports approximately 98% <str<strong>on</strong>g>of</str<strong>on</strong>g> its produce, has no o<str<strong>on</strong>g>the</str<strong>on</strong>g>r choice but to<br />
promote excellence because, despite <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> Burkina cott<strong>on</strong>, Burkina<br />
Faso has to meet <str<strong>on</strong>g>the</str<strong>on</strong>g> challenge in order to safeguard its porti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> market<br />
and face stiff competiti<strong>on</strong> <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market.<br />
III. COMPETITIVENESS AND VULNERABILITY<br />
The cott<strong>on</strong> industry <str<strong>on</strong>g>of</str<strong>on</strong>g> Burkina Faso is very competitive. However, its future<br />
in <str<strong>on</strong>g>the</str<strong>on</strong>g> medium term may be jeopardized by <str<strong>on</strong>g>the</str<strong>on</strong>g> subsidies granted to producers<br />
in industrialized countries. In 2001 and 2002, <str<strong>on</strong>g>the</str<strong>on</strong>g> Burkina cott<strong>on</strong> industry<br />
closed its accounts without receiving subsidies while, because <str<strong>on</strong>g>of</str<strong>on</strong>g> subsidies,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> producer prices <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> United States and <str<strong>on</strong>g>the</str<strong>on</strong>g> European Uni<strong>on</strong> were higher<br />
by 90% and 154% respectively than <str<strong>on</strong>g>the</str<strong>on</strong>g> world prices in 2001 and 2002.<br />
1. Trends <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Burkina Cott<strong>on</strong> Industry<br />
• Producers (UNPCB) are better organized, <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> company<br />
SOFITEX is efficient and <str<strong>on</strong>g>the</str<strong>on</strong>g>re is harm<strong>on</strong>y between <str<strong>on</strong>g>the</str<strong>on</strong>g> parties;<br />
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• C<strong>on</strong>trolled privatizati<strong>on</strong> toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r with relevant c<strong>on</strong>sultati<strong>on</strong><br />
mechanisms that involve <str<strong>on</strong>g>the</str<strong>on</strong>g> entire industry;<br />
• The banking system is involved because <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> sound financial<br />
management <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry; and<br />
• Increased producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> quality fiber.<br />
2. Weaknesses<br />
• Bad state <str<strong>on</strong>g>of</str<strong>on</strong>g> repair <str<strong>on</strong>g>of</str<strong>on</strong>g> rural roads;<br />
• High cost <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs and lack <str<strong>on</strong>g>of</str<strong>on</strong>g> equipment;<br />
• Inadequate counseling;<br />
• Stagnant yield since 1985/86 because <str<strong>on</strong>g>of</str<strong>on</strong>g> low fertility and <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
hand <str<strong>on</strong>g>the</str<strong>on</strong>g> resistance <str<strong>on</strong>g>of</str<strong>on</strong>g> pests to insecticides; and<br />
• Dependency <str<strong>on</strong>g>of</str<strong>on</strong>g> prices <strong>on</strong> exports because <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> low capacity <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
local weaving industry to use <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> produced (3% <strong>on</strong>ly <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
fiber produced).<br />
3. The Threats are:<br />
• Soil and envir<strong>on</strong>mental degradati<strong>on</strong>; and<br />
• Fall in export price and price volatility.<br />
4. The Opportunities are:<br />
• Improved producti<strong>on</strong> machinery;<br />
• Instituti<strong>on</strong>al innovati<strong>on</strong>; and<br />
• Stable microec<strong>on</strong>omic framework and fruitful partnership.<br />
5. Strategy <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Industry and <str<strong>on</strong>g>the</str<strong>on</strong>g> Fight Against Poverty<br />
90% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> poor live in <str<strong>on</strong>g>the</str<strong>on</strong>g> rural area and half <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>m live below <str<strong>on</strong>g>the</str<strong>on</strong>g> poverty<br />
line i.e. nearly 127 euros an adult a year. According to surveys c<strong>on</strong>ducted by<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> Nati<strong>on</strong>al Statistics and Populati<strong>on</strong> Institute (INSD), poverty in <str<strong>on</strong>g>the</str<strong>on</strong>g> rural<br />
area stood at 51% in 1994 and 1998 but rose to 52.3% in 2003. From 1994 to<br />
1998, increasing poverty in <str<strong>on</strong>g>the</str<strong>on</strong>g> rural areas that do not produce cott<strong>on</strong> (51.5%<br />
to 53.4%) was <str<strong>on</strong>g>of</str<strong>on</strong>g>fset by a sharp decline in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> areas (50.1%<br />
to 42.4%). The decline was due to <str<strong>on</strong>g>the</str<strong>on</strong>g> fact that <str<strong>on</strong>g>the</str<strong>on</strong>g> overall income <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong><br />
producers and <str<strong>on</strong>g>the</str<strong>on</strong>g> revenue per hectare increased respectively by 162% and<br />
65% from 1994/1995 to 1997/1998. However from 1997/1998 to 2002/2003,<br />
overall income increased by <strong>on</strong>ly 9%; revenue per hectare (whose increase is<br />
indicative <str<strong>on</strong>g>of</str<strong>on</strong>g> an increase in producer income) dropped by 21%, half <str<strong>on</strong>g>of</str<strong>on</strong>g> which<br />
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was due to a fall in prices. Since subsidies brought about depressi<strong>on</strong> in world<br />
prices, <str<strong>on</strong>g>the</str<strong>on</strong>g>y c<strong>on</strong>tributed to greater poverty in Burkina Faso.<br />
The expansi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> farming did not take place at <str<strong>on</strong>g>the</str<strong>on</strong>g> expense <str<strong>on</strong>g>of</str<strong>on</strong>g> food<br />
crops. Because <str<strong>on</strong>g>of</str<strong>on</strong>g> fertilizers acquired through loans, a good quantity <str<strong>on</strong>g>of</str<strong>on</strong>g> corn<br />
was produced and thus increased food security. Fur<str<strong>on</strong>g>the</str<strong>on</strong>g>rmore, <str<strong>on</strong>g>the</str<strong>on</strong>g> technical<br />
output <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producers and <str<strong>on</strong>g>the</str<strong>on</strong>g> food crop yield (2/3 <str<strong>on</strong>g>of</str<strong>on</strong>g> cultivated land)<br />
increased markedly <str<strong>on</strong>g>the</str<strong>on</strong>g> yield <str<strong>on</strong>g>of</str<strong>on</strong>g> this produce in cott<strong>on</strong> producti<strong>on</strong> areas. The<br />
flow <str<strong>on</strong>g>of</str<strong>on</strong>g> revenue from <str<strong>on</strong>g>the</str<strong>on</strong>g> sales <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> grain has been attractive in <str<strong>on</strong>g>the</str<strong>on</strong>g> entire<br />
cott<strong>on</strong> z<strong>on</strong>e. Physical and social infrastructure has improved (schools and<br />
health centers). It has also helped improve accessibility because <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
improvement <str<strong>on</strong>g>of</str<strong>on</strong>g> rural roads. Approximately 2 milli<strong>on</strong> individuals live directly<br />
or indirectly <strong>on</strong> cott<strong>on</strong> revenue which accounts for 60% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> export<br />
revenue <str<strong>on</strong>g>of</str<strong>on</strong>g> Burkina Faso. Cott<strong>on</strong> plays a key role in <str<strong>on</strong>g>the</str<strong>on</strong>g> fight against poverty<br />
and in <str<strong>on</strong>g>the</str<strong>on</strong>g> development strategy <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> country. However despite its rapid<br />
growth, <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry needs support. The measures necessary have been<br />
studied with all <str<strong>on</strong>g>the</str<strong>on</strong>g> parties c<strong>on</strong>cerned and <str<strong>on</strong>g>the</str<strong>on</strong>g> major objective <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> strategy<br />
can be summed up as follows:<br />
• organize producers better. The Burkina nati<strong>on</strong>al cott<strong>on</strong> producer<br />
uni<strong>on</strong> (UNPCB), established in 1998, bought 30% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> capital <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
SOFITEX in 1999 and obtained <str<strong>on</strong>g>the</str<strong>on</strong>g> majority <str<strong>on</strong>g>of</str<strong>on</strong>g> seats <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
management committee <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry setup within <str<strong>on</strong>g>the</str<strong>on</strong>g> framework<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Government-SOFITEX-UNPCB inter-pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>al agreement.<br />
The technical assistance that <str<strong>on</strong>g>the</str<strong>on</strong>g> UNPCB received enabled it to<br />
analyze issues better and to manage <str<strong>on</strong>g>the</str<strong>on</strong>g> industry efficiently.<br />
• liberalize by preserving <str<strong>on</strong>g>the</str<strong>on</strong>g> advantages <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> integrated industry.<br />
SOFITEX's m<strong>on</strong>opoly came to an end when two new companies<br />
were established in <str<strong>on</strong>g>the</str<strong>on</strong>g> eastern and central z<strong>on</strong>es. However, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
strength <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> integrated cott<strong>on</strong> industry has been safeguarded;<br />
supply <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs <str<strong>on</strong>g>of</str<strong>on</strong>g> good quality to GPCs at <str<strong>on</strong>g>the</str<strong>on</strong>g> village level, thanks<br />
to a credit guaranteed through <str<strong>on</strong>g>the</str<strong>on</strong>g> delivery <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> grain, remove<br />
from <str<strong>on</strong>g>the</str<strong>on</strong>g> villages <str<strong>on</strong>g>the</str<strong>on</strong>g> entire cott<strong>on</strong> produce at a flat price announced<br />
before <str<strong>on</strong>g>the</str<strong>on</strong>g> sowing and before fiber research and quality c<strong>on</strong>trol are<br />
financed.<br />
• increase productivity by advising <str<strong>on</strong>g>the</str<strong>on</strong>g> producers and providing loans<br />
for <str<strong>on</strong>g>the</str<strong>on</strong>g> purchase <str<strong>on</strong>g>of</str<strong>on</strong>g> equipment.<br />
• defend <str<strong>on</strong>g>the</str<strong>on</strong>g> interest <str<strong>on</strong>g>of</str<strong>on</strong>g> producers internati<strong>on</strong>ally, especially at <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
WTO.<br />
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IV. LIBERALIZATION OF THE INDUSTRY<br />
The creati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> two new areas requires <str<strong>on</strong>g>the</str<strong>on</strong>g> setting up <str<strong>on</strong>g>of</str<strong>on</strong>g> new instituti<strong>on</strong>s,<br />
specially <str<strong>on</strong>g>the</str<strong>on</strong>g> Inter-Pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>al Cott<strong>on</strong> Associati<strong>on</strong>, which will be assigned to<br />
manage some critical tasks <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry. As it is <str<strong>on</strong>g>the</str<strong>on</strong>g> case with SOFITEX,<br />
UNPCB will own part <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> authorized capital <str<strong>on</strong>g>of</str<strong>on</strong>g> each <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> two companies<br />
and shall be represented <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir boards <str<strong>on</strong>g>of</str<strong>on</strong>g> directors. The DAGRIS group<br />
established a company called SOCOMA based in <str<strong>on</strong>g>the</str<strong>on</strong>g> east <str<strong>on</strong>g>of</str<strong>on</strong>g> Burkina Faso.<br />
DAGRIS owns <str<strong>on</strong>g>the</str<strong>on</strong>g> majority <str<strong>on</strong>g>of</str<strong>on</strong>g> shares. The UNPCB is also a major<br />
shareholder <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> company's capital.<br />
The same thing applies to <str<strong>on</strong>g>the</str<strong>on</strong>g> PAUL REINHARTAGA/SOBA/AMEFERT<br />
group, whose head <str<strong>on</strong>g>of</str<strong>on</strong>g>fice is in Ouagadougou. The group c<strong>on</strong>trols <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong><br />
producti<strong>on</strong> z<strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> central regi<strong>on</strong>. It operates through a company called<br />
FASO COTTON. The UNPCB equity participati<strong>on</strong> in this company is similar<br />
to that <str<strong>on</strong>g>of</str<strong>on</strong>g> SOCOMA in <str<strong>on</strong>g>the</str<strong>on</strong>g> east. The liberalizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Burkina Faso will help not <strong>on</strong>ly to increase producti<strong>on</strong> but also to improve<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> marketing <str<strong>on</strong>g>of</str<strong>on</strong>g> Burkina cott<strong>on</strong>. Each <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> two companies has its own<br />
cott<strong>on</strong> fiber marketing network.<br />
V. ADVICE TO PRODUCERS<br />
SOFITEX provides support to producers through cott<strong>on</strong> corresp<strong>on</strong>dents (CC)<br />
and cott<strong>on</strong> technical agents ( ATC). However <str<strong>on</strong>g>the</str<strong>on</strong>g> support is inadequate (1 CC<br />
for more than 1,500 farmers and 1 ATC for more than 500 farmers). With <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
assistance <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> French <strong>Development</strong> Agency (AFD) and <str<strong>on</strong>g>the</str<strong>on</strong>g> European<br />
Uni<strong>on</strong> (EU), SOFITEX set up a team that has already trained 28 management<br />
advisors, who have carried out technical follow-up for 1450 producers. A<br />
team <str<strong>on</strong>g>of</str<strong>on</strong>g> financial management advisors has also been set up within <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
UNPCB and, it needs to be streng<str<strong>on</strong>g>the</str<strong>on</strong>g>ned.<br />
1. Infrastructure and Equipment<br />
Approximately 1000 kms <str<strong>on</strong>g>of</str<strong>on</strong>g> roads to be c<strong>on</strong>structed at <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> 15,000<br />
euros per km were identified in 2002. However since <str<strong>on</strong>g>the</str<strong>on</strong>g>n cultivated cott<strong>on</strong><br />
farms has increased by 35% i.e. currently <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a delay that should be<br />
compensated for. This would require major external assistance but <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
maintenance <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> roads will be an assignment <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> companies.<br />
Fur<str<strong>on</strong>g>the</str<strong>on</strong>g>rmore 150 stores for inputs toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r with 50 community centres have<br />
137
een built with EU assistance at a cost <str<strong>on</strong>g>of</str<strong>on</strong>g> 10,000 euros per unit. Half <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
investment was provided by <str<strong>on</strong>g>the</str<strong>on</strong>g> EU and <str<strong>on</strong>g>the</str<strong>on</strong>g> remainder by SOFITEX and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
UNPCB. Programmes have been set to provide equipment for cott<strong>on</strong><br />
producers. The programs entails loans granted by Banks with an interest rate<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> nearly 15% and an advance <str<strong>on</strong>g>of</str<strong>on</strong>g> 20% for <str<strong>on</strong>g>the</str<strong>on</strong>g> operati<strong>on</strong>. The candidates are<br />
shortlisted by an associati<strong>on</strong> composed <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir peers. The equipment is a<br />
plough, a cart and a pair <str<strong>on</strong>g>of</str<strong>on</strong>g> bulls.<br />
2. Research<br />
The cott<strong>on</strong> company pays to <str<strong>on</strong>g>the</str<strong>on</strong>g> INERA a c<strong>on</strong>tributi<strong>on</strong> to finance research<br />
designed to enhance technology that will enable <str<strong>on</strong>g>the</str<strong>on</strong>g> company to safeguard its<br />
share <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market and increase <str<strong>on</strong>g>the</str<strong>on</strong>g> productivity <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry<br />
for all <str<strong>on</strong>g>the</str<strong>on</strong>g> players. However, some aspects regarding <str<strong>on</strong>g>the</str<strong>on</strong>g> restorati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> soil<br />
fertility and envir<strong>on</strong>mental protecti<strong>on</strong> are not adequately addressed. The<br />
challenge for cott<strong>on</strong> cultivati<strong>on</strong> is more complex and more ambitious<br />
because:<br />
• Cott<strong>on</strong> is <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly cash crop that provides regular income for farmers,<br />
because <str<strong>on</strong>g>the</str<strong>on</strong>g> producer prices are fixed and <str<strong>on</strong>g>the</str<strong>on</strong>g> yield relatively stable;<br />
• The income derived from cott<strong>on</strong> helps <str<strong>on</strong>g>the</str<strong>on</strong>g> farmer not <strong>on</strong>ly to cover<br />
producti<strong>on</strong> costs and pers<strong>on</strong>al expenses but to accumulate capital in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> form <str<strong>on</strong>g>of</str<strong>on</strong>g> livestock, real estate and equipment;<br />
• The steady growth <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> has accelerated development<br />
through diversified and modernized agriculture (intensive farming <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
food crops through <str<strong>on</strong>g>the</str<strong>on</strong>g> use <str<strong>on</strong>g>of</str<strong>on</strong>g> oxen-drawn ploughs and motorized<br />
agriculture);<br />
• Organizing producti<strong>on</strong> in village groupings; boosting <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
sectors <str<strong>on</strong>g>of</str<strong>on</strong>g> activity (trade, crafts, agro industries etc) ; improving<br />
living c<strong>on</strong>diti<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> people through <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>structi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
infrastructure such as schools, dispensaries and water points.<br />
• These achievements are indicative <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> dynamism <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong><br />
industry, <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>e hand, and <str<strong>on</strong>g>the</str<strong>on</strong>g> performance <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> research <strong>on</strong><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r hand. The Cott<strong>on</strong> Programme <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Envir<strong>on</strong>ment and<br />
Agricultural Research Institute (INERA) has always received <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
financial support <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry and <str<strong>on</strong>g>the</str<strong>on</strong>g> government <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Burkina Faso. Thanks to such funding, cott<strong>on</strong> research has made<br />
available to producers between 1980 and 2000 a dozen <str<strong>on</strong>g>of</str<strong>on</strong>g> improved<br />
varieties and a huge technological improvement. Formulas <str<strong>on</strong>g>of</str<strong>on</strong>g> mineral<br />
and organic manure as well as technical methods have been<br />
developed.<br />
138
Programmes designed to ensure phytosanitary health have been introduced<br />
after <str<strong>on</strong>g>the</str<strong>on</strong>g> emergence <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> resistance <str<strong>on</strong>g>of</str<strong>on</strong>g> Helicoverpa armigera to <str<strong>on</strong>g>the</str<strong>on</strong>g> chemical<br />
family <str<strong>on</strong>g>of</str<strong>on</strong>g> pyrethrinoids. As a result, collective efforts were made in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
sou<str<strong>on</strong>g>the</str<strong>on</strong>g>rn regi<strong>on</strong> under a project called <str<strong>on</strong>g>the</str<strong>on</strong>g> Regi<strong>on</strong>al Management and<br />
Preventi<strong>on</strong> Project <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Resistance <str<strong>on</strong>g>of</str<strong>on</strong>g> Helicoverpa armigera to<br />
Pyrethrinoids in <str<strong>on</strong>g>the</str<strong>on</strong>g> West Africa (PRPRAO). The project helped to arrest <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
resistance and to increase cott<strong>on</strong> yield (grain and fiber) and thus enhanced<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> performance <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry as a whole.<br />
3. Quality Enhancement<br />
SOFITEX has built two new ginneries. It has just set up a sec<strong>on</strong>d lint removal<br />
unit and also distributes bags for harvest and tarpaulin to prevent <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong><br />
fiber from being c<strong>on</strong>taminated by o<str<strong>on</strong>g>the</str<strong>on</strong>g>r products. The African cott<strong>on</strong><br />
associati<strong>on</strong> is also seeking to promote an African label.<br />
4. Horiz<strong>on</strong>tal Diversificati<strong>on</strong><br />
The cott<strong>on</strong>/corn rotati<strong>on</strong> system has been efficient but it can be improved by<br />
introducing legumes (niebe), which provide nitrogen necessary for cott<strong>on</strong> as<br />
well as vegetable cover, which protects soil from erosi<strong>on</strong>. Fur<str<strong>on</strong>g>the</str<strong>on</strong>g>rmore,<br />
developing o<str<strong>on</strong>g>the</str<strong>on</strong>g>r promising sectors (niebe, fruits vegetables, vegetable oil and<br />
animal husbandry) must be encouraged in areas where agricultural and<br />
envir<strong>on</strong>mental c<strong>on</strong>diti<strong>on</strong>s are favorable.<br />
5. Vertical Diversificati<strong>on</strong><br />
Factories have been established to process cott<strong>on</strong> grains, which used to be<br />
treated as waste, into table oil, soap and apple cakes for <str<strong>on</strong>g>the</str<strong>on</strong>g> domestic market.<br />
Although <str<strong>on</strong>g>the</str<strong>on</strong>g>se products have increased rapidly, <str<strong>on</strong>g>the</str<strong>on</strong>g> demand for apple cakes<br />
as animal feed has outstripped supply. Thanks to greater producti<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
company's revenue from grain sales has tripled since 1995. However such<br />
experience has not been as good in <str<strong>on</strong>g>the</str<strong>on</strong>g> textile industry. FILSAH, <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly<br />
weaving company remaining after <str<strong>on</strong>g>the</str<strong>on</strong>g> closure <str<strong>on</strong>g>of</str<strong>on</strong>g> Faso-Fani, received a loan<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> 1 milli<strong>on</strong> US dollars from BEI in 1997. However, it is facing difficulties<br />
after it has lost its major outlet in Cote d'Ivoire.<br />
6. Risk Management<br />
By combining installment sale and back-up fund, Burkina Faso has been able<br />
to manage price risk up to a certain limit. But this practice showed its limits<br />
when prices fell to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir current level. In order to overcome this difficulty, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
139
ack up fund has to be restructured. Fur<str<strong>on</strong>g>the</str<strong>on</strong>g>rmore, <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al system should<br />
be supported at <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong>al level in <str<strong>on</strong>g>the</str<strong>on</strong>g> event <str<strong>on</strong>g>of</str<strong>on</strong>g> major fluctuati<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong><br />
fiber revenue denominated in euros.<br />
7. Multilateral Negotiati<strong>on</strong>s<br />
Burkina Faso, toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r with o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries c<strong>on</strong>cerned, is taking all measures<br />
possible at <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO to maintain <str<strong>on</strong>g>the</str<strong>on</strong>g> specific character <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> and ensure<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> rapid removal <str<strong>on</strong>g>of</str<strong>on</strong>g> subsidies, which has caused depressi<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> world<br />
price <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>. Burkina Faso loses 257 CFA francs per kilogram as a result<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> subsidies i.e. more than 50 billi<strong>on</strong> CFA francs in <str<strong>on</strong>g>the</str<strong>on</strong>g> company's mark up.<br />
A coordinati<strong>on</strong> and follow up unit implementing <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO agreement<br />
(CNCS/OMC) has been set up with <str<strong>on</strong>g>the</str<strong>on</strong>g> support <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> development partners.<br />
For a better follow up Burkina Faso has recently opened an embassy to this<br />
effect in Geneva.<br />
At <str<strong>on</strong>g>the</str<strong>on</strong>g> sub-regi<strong>on</strong>al level, UEMOA countries <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO presented at <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
extra-ordinary sessi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> agriculture committee <str<strong>on</strong>g>of</str<strong>on</strong>g> 26 September a<br />
summary <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir negotiati<strong>on</strong> positi<strong>on</strong>s (G/AG/NG/W/188). The initiative was<br />
in accordance with Chapter 5 <str<strong>on</strong>g>of</str<strong>on</strong>g> Additi<strong>on</strong>al Protocol II <strong>on</strong> sectoral policies <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> Uni<strong>on</strong>, which outlines <str<strong>on</strong>g>the</str<strong>on</strong>g> implementati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> a comm<strong>on</strong> agricultural<br />
policy designed to achieve food security within <str<strong>on</strong>g>the</str<strong>on</strong>g> Uni<strong>on</strong>, increase<br />
agricultural productivity, use optimally producti<strong>on</strong> factors, improve market<br />
c<strong>on</strong>diti<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> agricultural produce, livestock and fisheries. The comm<strong>on</strong><br />
negotiati<strong>on</strong> positi<strong>on</strong>s are based <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> fact that <str<strong>on</strong>g>the</str<strong>on</strong>g> implementati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
agreement <strong>on</strong> agriculture has not yielded <str<strong>on</strong>g>the</str<strong>on</strong>g> desired results i.e. greater<br />
demand for <str<strong>on</strong>g>the</str<strong>on</strong>g> liberalizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> agricultural policies by developed countries<br />
and more measures in favor <str<strong>on</strong>g>of</str<strong>on</strong>g> developing countries and least developed<br />
countries. The measures related to this c<strong>on</strong>cern market access policies,<br />
internal support measures and export subsidies.<br />
8. Prospects<br />
The two major objectives c<strong>on</strong>sist in increasing producer income by boosting<br />
productivity and in ensuring <str<strong>on</strong>g>the</str<strong>on</strong>g> sustainability <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry by managing<br />
soil degradati<strong>on</strong> and increasing yield. Therefore emphasis should be laid <strong>on</strong>:<br />
• Managing farm land<br />
• Improving infrastructure and equipment<br />
• Managing soil and envir<strong>on</strong>mental degradati<strong>on</strong><br />
• Managing risks and securing fair prices after <str<strong>on</strong>g>the</str<strong>on</strong>g> removal <str<strong>on</strong>g>of</str<strong>on</strong>g> subsidies<br />
• Exploring agricultural biotechnologies<br />
140
VI. CONCLUSION<br />
Developing countries faced many challenges in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir struggle for food<br />
security. For many <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>se countries, <str<strong>on</strong>g>the</str<strong>on</strong>g> objective <str<strong>on</strong>g>of</str<strong>on</strong>g> food self-reliance is<br />
jeopardized by a populati<strong>on</strong> growth rate higher than that <str<strong>on</strong>g>of</str<strong>on</strong>g> food producti<strong>on</strong>.<br />
Moreover resources are limited, lack <str<strong>on</strong>g>of</str<strong>on</strong>g> growth and development enhancing<br />
technology, poor biodiversity and envir<strong>on</strong>mental degradati<strong>on</strong>. According to<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> FAO, <strong>on</strong>e has to resort to all <str<strong>on</strong>g>the</str<strong>on</strong>g> soluti<strong>on</strong>s available such as using<br />
phytosanitary treatment, soil improvement, fertilizers, crop choice and<br />
rotati<strong>on</strong>, irrigati<strong>on</strong>, variety selecti<strong>on</strong> and resort to biotechnologies. Since <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
majority <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> people in developing countries leave in rural areas and depend<br />
directly <strong>on</strong> agriculture for livelihood, this sector is <str<strong>on</strong>g>the</str<strong>on</strong>g> most important sector<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir ec<strong>on</strong>omies. Using genetic engineering and trans-genesis,<br />
safeguarding biographical diversity and protecting a viable envir<strong>on</strong>ment seem<br />
to open new and interesting avenues. Burkina Faso, in its quest for<br />
productivity, has set up, since 2003, through its cott<strong>on</strong> industry and INERA,<br />
a regulatory framework in order to help introduce genetically modified cott<strong>on</strong><br />
varieties for experiment in research stati<strong>on</strong>s.<br />
141
142
REPORT ON THE BENIN COTTON INDUSTRY<br />
(Original in French)<br />
Blaise A. Fadoegn<strong>on</strong><br />
Director, Cott<strong>on</strong> and Fibres Agricultural Research Centre<br />
I. COTTON CULTIVATION IN BENIN<br />
1. Importance <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Cultivati<strong>on</strong> in Benin<br />
The cott<strong>on</strong> plant is <str<strong>on</strong>g>of</str<strong>on</strong>g> utmost ec<strong>on</strong>omic importance in Benin. It is <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d<br />
major cash crop after palm oil. The cott<strong>on</strong> industry is <str<strong>on</strong>g>the</str<strong>on</strong>g> mainstay <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
rural and agro-industrial ec<strong>on</strong>omy in Benin. Its c<strong>on</strong>tributi<strong>on</strong> in terms <str<strong>on</strong>g>of</str<strong>on</strong>g> added<br />
value is estimated at 13% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> GDP. It accounts for 80% and 90% <str<strong>on</strong>g>of</str<strong>on</strong>g> export<br />
revenue and 35% <str<strong>on</strong>g>of</str<strong>on</strong>g> tax revenue (apart from customs duties). For <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
government, <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry is a strategic tool in <str<strong>on</strong>g>the</str<strong>on</strong>g> fight against poverty.<br />
70 billi<strong>on</strong> CFA francs worth <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> grain is bought annually and supplied<br />
to over 300,000 farmers. This indirectly provides 3 milli<strong>on</strong> individuals out <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Benin’s 6.5 milli<strong>on</strong> populati<strong>on</strong> with income.<br />
2. Growth <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Industry in Benin (Case 1)<br />
The Cott<strong>on</strong> Industry was insignificant during <str<strong>on</strong>g>the</str<strong>on</strong>g> col<strong>on</strong>ial period but gained<br />
momentum between 1960 and 1997. It underwent many fluctuati<strong>on</strong>s, mainly<br />
because <str<strong>on</strong>g>of</str<strong>on</strong>g> shifts in development strategies and <str<strong>on</strong>g>the</str<strong>on</strong>g> way <str<strong>on</strong>g>the</str<strong>on</strong>g> industry is<br />
organized. There have been five distinctive phases:<br />
• Phase I (1960–1972): Cott<strong>on</strong> cultivati<strong>on</strong> grew steadily toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r with<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> area <str<strong>on</strong>g>of</str<strong>on</strong>g> farmland and <str<strong>on</strong>g>the</str<strong>on</strong>g> correct use <str<strong>on</strong>g>of</str<strong>on</strong>g> phytosanitary treatments.<br />
• Phase II (1973 – 1980): The agricultural policy focused <strong>on</strong> food crop<br />
increase. So cott<strong>on</strong> producti<strong>on</strong> dropped from 50,000 t<strong>on</strong>s in 1972 to 16<br />
t<strong>on</strong>s in 1997.<br />
• Phase III (1981–1989): Cott<strong>on</strong> cultivati<strong>on</strong> was revived through major<br />
rural development projects. The yield increased from 15,000 t<strong>on</strong>s in<br />
1981 to a record level <str<strong>on</strong>g>of</str<strong>on</strong>g> 133,000 t<strong>on</strong> in 1986. It <str<strong>on</strong>g>the</str<strong>on</strong>g>n dropped to<br />
105,000 t<strong>on</strong>s in 1989 as a result <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> crisis <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> world<br />
market, <str<strong>on</strong>g>the</str<strong>on</strong>g> fall in cott<strong>on</strong> producer price, farmland reducti<strong>on</strong> policy and<br />
bad climate.<br />
143
• Phase IV (1990–1997): Record yields were broken each year except in<br />
1992 when bad climate and parasites led to a minor drop in yield. The<br />
most remarkable growth was that <str<strong>on</strong>g>of</str<strong>on</strong>g> 1993 when <str<strong>on</strong>g>the</str<strong>on</strong>g> yield exceeded by<br />
71% that <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> previous year and by 20% <str<strong>on</strong>g>the</str<strong>on</strong>g> industrial capacity. Such<br />
growth was mainly due to an increase in farmland area.<br />
• Phase V (1998 <strong>on</strong>ward to date): Because <str<strong>on</strong>g>of</str<strong>on</strong>g> resistance, <str<strong>on</strong>g>the</str<strong>on</strong>g> growth <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
cott<strong>on</strong> yield noticeable over two decades slowed down. The increase in<br />
yield that took place in 2001 is an indicati<strong>on</strong> that <str<strong>on</strong>g>the</str<strong>on</strong>g> programme to<br />
manage resistance initiated by <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al agricultural research was<br />
successful.<br />
Unfortunately, <str<strong>on</strong>g>the</str<strong>on</strong>g> 2001 success was followed by new crises in <str<strong>on</strong>g>the</str<strong>on</strong>g> industry,<br />
especially am<strong>on</strong>g pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>als. The cost <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs c<strong>on</strong>tinued to rise and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
market price <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> dropped sharply.<br />
Producti<strong>on</strong> ( T<strong>on</strong>s)<br />
450000<br />
400000<br />
350000<br />
300000<br />
250000<br />
200000<br />
150000<br />
100000<br />
50000<br />
0<br />
1961-1962<br />
1964-1965<br />
Figure 1. Cott<strong>on</strong> Producti<strong>on</strong> in Benin, 1961-2004<br />
II. PRODUCTION, EXPORT AND EMPLOYMENT IN THE<br />
INDUSTRY<br />
In Benin, cott<strong>on</strong> is produced <strong>on</strong> 300,000 small farms occupying a land area <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
380,000 hectares in 1997 It later shrunk to 314,096 hectares in 2003 with a<br />
144<br />
1967-1968<br />
1970-1971<br />
1973-1974<br />
1976-1977<br />
1979-1980<br />
1982-1983<br />
1985-1986<br />
1988-1989<br />
1991-1992<br />
1994-1995<br />
1997-1998<br />
2000-2001<br />
2003-2004
yield <str<strong>on</strong>g>of</str<strong>on</strong>g> 332,500 t<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> seed cott<strong>on</strong>. The yield <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> fibre and seed stood<br />
at 140,262 t<strong>on</strong>s and 177,266 t<strong>on</strong>s respectively <str<strong>on</strong>g>the</str<strong>on</strong>g> same year. The average<br />
yield <str<strong>on</strong>g>of</str<strong>on</strong>g> ginned cott<strong>on</strong> during <str<strong>on</strong>g>the</str<strong>on</strong>g> same year stood at 42.50% for <str<strong>on</strong>g>the</str<strong>on</strong>g> fibre and<br />
53.71% for seed. The major purchasers <str<strong>on</strong>g>of</str<strong>on</strong>g> Benin cott<strong>on</strong> are <str<strong>on</strong>g>the</str<strong>on</strong>g> following<br />
firms:<br />
- Dunavant : (Geneva, Switzerland)<br />
- L’aigl<strong>on</strong> : (Geneva, Switzerland)<br />
- Cott<strong>on</strong> Distributor Corporati<strong>on</strong> (CDI) : (Lausanne, Switzerland)<br />
- Paul Reinhart : Winterthour : (Switzerland)<br />
- Devcot : (Lilles, France)<br />
- COPACO : (Paris, Fance)<br />
- Louis Dreyfus : (Belgium)<br />
- Rally Bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs : (England)<br />
- Mambo Commodities : (France)<br />
- Well Bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs : (Paris, France)<br />
Out <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> entire seed cott<strong>on</strong> yield, <strong>on</strong>ly about 5% <str<strong>on</strong>g>of</str<strong>on</strong>g> ginned cott<strong>on</strong> is<br />
c<strong>on</strong>sumed by <str<strong>on</strong>g>the</str<strong>on</strong>g> textile industry and oil producing factories in Benin. So<br />
Benin does not have any cott<strong>on</strong> reserve. Jobs in <str<strong>on</strong>g>the</str<strong>on</strong>g> industry are occupied by<br />
cott<strong>on</strong> farmers, mainly composed <str<strong>on</strong>g>of</str<strong>on</strong>g> family members or labourers from towns<br />
or neighbouring countries and <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r hand input distributors and <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
staff, transporters and <str<strong>on</strong>g>the</str<strong>on</strong>g>ir apprentices, ginners and <str<strong>on</strong>g>the</str<strong>on</strong>g>ir staff, back-up staff<br />
recruited by <str<strong>on</strong>g>the</str<strong>on</strong>g> DPQC, <str<strong>on</strong>g>the</str<strong>on</strong>g> entire staff <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> three major farmers’<br />
associati<strong>on</strong>s (AIC, CSPR and CAGIA) and many staff members <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers’<br />
organizati<strong>on</strong>s. Fur<str<strong>on</strong>g>the</str<strong>on</strong>g>rmore, revenue from cott<strong>on</strong> is <str<strong>on</strong>g>the</str<strong>on</strong>g> driving force <str<strong>on</strong>g>of</str<strong>on</strong>g> entire<br />
rural micro-ec<strong>on</strong>omy (food, clothing, educati<strong>on</strong>, health, etc.)<br />
1. Major Cott<strong>on</strong> Facilities in Benin<br />
Most <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry, which was entirely state-run, has gradually<br />
moved into <str<strong>on</strong>g>the</str<strong>on</strong>g> hands <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector because <str<strong>on</strong>g>of</str<strong>on</strong>g> government divestiture.<br />
So <str<strong>on</strong>g>the</str<strong>on</strong>g> government and <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector are both involved in <str<strong>on</strong>g>the</str<strong>on</strong>g> industry in<br />
some cases. The following diagram illustrates <str<strong>on</strong>g>the</str<strong>on</strong>g> instituti<strong>on</strong>al structure <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
industry. The three new management entities are in bold. The dotted lines<br />
indicate financial flows between <str<strong>on</strong>g>the</str<strong>on</strong>g> players. In order to carry out reforms and<br />
perform tasks shifted to <str<strong>on</strong>g>the</str<strong>on</strong>g>m by <str<strong>on</strong>g>the</str<strong>on</strong>g> government, private firms <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry<br />
set up pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>als organizati<strong>on</strong>s operating in every segment <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry,<br />
and established technical entities assigned to perform <str<strong>on</strong>g>the</str<strong>on</strong>g> main tasks <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
industry.<br />
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In <str<strong>on</strong>g>the</str<strong>on</strong>g> beginning <str<strong>on</strong>g>the</str<strong>on</strong>g> various players <str<strong>on</strong>g>of</str<strong>on</strong>g> industry used to bel<strong>on</strong>g to three<br />
pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>al organizati<strong>on</strong>s:<br />
• Benin Federati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Producers (FUPRO) is <str<strong>on</strong>g>the</str<strong>on</strong>g> supreme body <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
network <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers’ organizati<strong>on</strong>s in villages, counties and districts.<br />
FUPRO’s role is to support producti<strong>on</strong> and coordinate <str<strong>on</strong>g>the</str<strong>on</strong>g> marketing<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> seed through CAGIA and its main facilities (GV, UCP and<br />
UDP) and protect producers’ interests. It is <str<strong>on</strong>g>the</str<strong>on</strong>g> producers’ forum <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
c<strong>on</strong>sultati<strong>on</strong>.<br />
• Benin Associati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>al Ginners (APEB) is <str<strong>on</strong>g>the</str<strong>on</strong>g> ginners’<br />
forum <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>sultati<strong>on</strong>. It buys and gins <str<strong>on</strong>g>the</str<strong>on</strong>g> entire cott<strong>on</strong> seed<br />
produce.<br />
• Benin Associati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Agricultural Input Distributors (GPDIA) is <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
forum where input distributi<strong>on</strong> firms c<strong>on</strong>sult each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r. It represents<br />
input distributors at inter-organizati<strong>on</strong>al negotiati<strong>on</strong>s.<br />
Some breakaway farmers’ organizati<strong>on</strong>s have also been established. They are<br />
am<strong>on</strong>g o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs <str<strong>on</strong>g>the</str<strong>on</strong>g> Associati<strong>on</strong> Producer <str<strong>on</strong>g>Group</str<strong>on</strong>g>ings (AGROP), <str<strong>on</strong>g>the</str<strong>on</strong>g> Nati<strong>on</strong>al<br />
Federati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Agricultural Producers (FENAGROP) and <str<strong>on</strong>g>the</str<strong>on</strong>g> Nati<strong>on</strong>al<br />
Federati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Producers (FENAPROC). O<str<strong>on</strong>g>the</str<strong>on</strong>g>r input distributi<strong>on</strong> firms<br />
have also created <str<strong>on</strong>g>the</str<strong>on</strong>g> Benin Associati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Agricultural Input Distributors.<br />
With government’s assistance and <str<strong>on</strong>g>the</str<strong>on</strong>g> support <str<strong>on</strong>g>of</str<strong>on</strong>g> development partners, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
original organizati<strong>on</strong>s stated here above set up three technical entities to run<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> affairs <str<strong>on</strong>g>of</str<strong>on</strong>g> industry. They are:<br />
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• Cooperative <str<strong>on</strong>g>of</str<strong>on</strong>g> Agricultural Input Supply and Management<br />
(CAGIA). Its role is to centralize <str<strong>on</strong>g>the</str<strong>on</strong>g> input needs cott<strong>on</strong> producers,<br />
and organize <str<strong>on</strong>g>the</str<strong>on</strong>g> selecti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> input distributi<strong>on</strong> firms that supply<br />
producers.<br />
• Payment and Recovery Uni<strong>on</strong> (CSPR-GIE). It ensures that producers<br />
are paid for cott<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>y sell to ginners and <str<strong>on</strong>g>the</str<strong>on</strong>g>y pay for inputs lent to<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>m by input distributors so that needs for input during following<br />
seas<strong>on</strong> can be satisfied.<br />
• Inter-organizati<strong>on</strong>al Cott<strong>on</strong> Associati<strong>on</strong> (AIC). It fosters ties am<strong>on</strong>g<br />
stakeholders <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry, and dialogue between <str<strong>on</strong>g>the</str<strong>on</strong>g>m and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
government. It also determines, manages and provides funding for all<br />
activities and functi<strong>on</strong>s that ensure <str<strong>on</strong>g>the</str<strong>on</strong>g> industry’s sustainability and<br />
viability (research, seed producti<strong>on</strong>, training <str<strong>on</strong>g>of</str<strong>on</strong>g> producers, cott<strong>on</strong><br />
farms, etc.)<br />
In additi<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> above-stated players, many o<str<strong>on</strong>g>the</str<strong>on</strong>g>r government bodies<br />
technically support <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry such as <str<strong>on</strong>g>the</str<strong>on</strong>g> Ministry <str<strong>on</strong>g>of</str<strong>on</strong>g> Agriculture,<br />
Animal Husbandry and Fisheries. Agricultural Research Centre – Cott<strong>on</strong> and<br />
Fibre (CRA-CF/INRAB) is under <str<strong>on</strong>g>the</str<strong>on</strong>g> Benin Nati<strong>on</strong>al Agricultural Research<br />
Institute (INRAB). It designs and innovates new agricultural techniques for<br />
farmers, enhances plant variety and provides phytosanitary protecti<strong>on</strong> for<br />
cott<strong>on</strong> cultivati<strong>on</strong>.<br />
The CRA-CF increases and manages cott<strong>on</strong> seeds supplied to farmers, helps<br />
to devise technical specificati<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> fertilizers and phytosanitray products to<br />
be imported, c<strong>on</strong>trols <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> imported inputs, test products proposed<br />
by suppliers, makes recommendati<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> Nati<strong>on</strong>al Phytopharmaceutical<br />
Products C<strong>on</strong>trol and Licensing Commissi<strong>on</strong> (CNAC) <strong>on</strong> standard<br />
agropharmaceutical formulas and trains trainers and <str<strong>on</strong>g>of</str<strong>on</strong>g>ficers <str<strong>on</strong>g>of</str<strong>on</strong>g> some input<br />
distributing private companies. CRA-CF has an entomology laboratory in<br />
Cana, Bohic<strong>on</strong> and a 20 saw small ginnery in Parakou.<br />
• Quality and Standards Promoti<strong>on</strong> Department (DPQC): It<br />
handles technical assistance c<strong>on</strong>cerning quality and standards. It<br />
specifically c<strong>on</strong>trols seed quality before distributi<strong>on</strong>, m<strong>on</strong>itors farms<br />
designed for cott<strong>on</strong> seed cultivati<strong>on</strong>, inspects cott<strong>on</strong> markets,<br />
m<strong>on</strong>itors <str<strong>on</strong>g>the</str<strong>on</strong>g> technical quality <str<strong>on</strong>g>of</str<strong>on</strong>g> ginning and c<strong>on</strong>trols cott<strong>on</strong><br />
processing and export.<br />
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• Plant Protecti<strong>on</strong> and Phytosanitary C<strong>on</strong>trol Service (SPVCP): It<br />
is under <str<strong>on</strong>g>the</str<strong>on</strong>g> Department <str<strong>on</strong>g>of</str<strong>on</strong>g> Agriculture and ensures that standards are<br />
complied with when it comes to <str<strong>on</strong>g>the</str<strong>on</strong>g> use <str<strong>on</strong>g>of</str<strong>on</strong>g> phytopharmaceutical<br />
products and phytosanitary c<strong>on</strong>trol. Under its purview falls <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
CNAC, which it heads and whose secretariat it houses. It approves all<br />
phytopharmaceutical products all over <str<strong>on</strong>g>the</str<strong>on</strong>g> country before <str<strong>on</strong>g>the</str<strong>on</strong>g>y are<br />
used by farmers.<br />
• Department <str<strong>on</strong>g>of</str<strong>on</strong>g> Training and Extensi<strong>on</strong> Work (DIFOV): It is<br />
directly under <str<strong>on</strong>g>the</str<strong>on</strong>g> Ministry <str<strong>on</strong>g>of</str<strong>on</strong>g> Agriculture, Animal Husbadry and<br />
Fisheries and c<strong>on</strong>ducts <str<strong>on</strong>g>the</str<strong>on</strong>g> affairs <str<strong>on</strong>g>of</str<strong>on</strong>g> CeRPAs. It also handle<br />
agricultural extensi<strong>on</strong>, trains trainers and producers, ensures that<br />
trainers m<strong>on</strong>itor closely <str<strong>on</strong>g>the</str<strong>on</strong>g> producers and m<strong>on</strong>itors, supports and<br />
advises trainers.<br />
• Regi<strong>on</strong>al Centres for Agricultural Promoti<strong>on</strong> (CeRPA): There is<br />
<strong>on</strong>e in each province. Their task is to:<br />
- enhance agricultural produce (plants, animals and forestry)<br />
- improve related infrastructure (rehabilitati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> wetlands, well<br />
c<strong>on</strong>structi<strong>on</strong> in villages and gardens, training <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers to<br />
market agricultural produce and to recover loans<br />
- agricultural extensi<strong>on</strong><br />
The various units <str<strong>on</strong>g>of</str<strong>on</strong>g> CePRA are represented in every cott<strong>on</strong> farming area. An<br />
area extensi<strong>on</strong> supervisor m<strong>on</strong>itors <strong>on</strong>e or several districts while an extensi<strong>on</strong><br />
worker (APV) handles training in <strong>on</strong>e or several villages.<br />
Nati<strong>on</strong>al Agricultural Produce Price C<strong>on</strong>trol Bureau (ONS): It c<strong>on</strong>trols<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> prices <str<strong>on</strong>g>of</str<strong>on</strong>g> agricultural produce, especially cott<strong>on</strong>. However, <str<strong>on</strong>g>the</str<strong>on</strong>g> price<br />
c<strong>on</strong>trol mechanism now questi<strong>on</strong>ed since ginning was open to private firms<br />
and entrepreneurs. The need to c<strong>on</strong>trol prices is generally accepted but it<br />
functi<strong>on</strong> remains to be determined. So <str<strong>on</strong>g>the</str<strong>on</strong>g> principles <str<strong>on</strong>g>of</str<strong>on</strong>g> a new price c<strong>on</strong>trol<br />
mechanism that is in c<strong>on</strong>s<strong>on</strong>ance with <str<strong>on</strong>g>the</str<strong>on</strong>g> new set-up should now be laid<br />
down.<br />
III. POLICY ON INPUT SUPPLY AND DISTRIBUTION<br />
The Benin Cooperative <str<strong>on</strong>g>of</str<strong>on</strong>g> Agricultural Input Supply and Management<br />
(CAGIA-Benin) is <str<strong>on</strong>g>the</str<strong>on</strong>g> farmers’ instituti<strong>on</strong> that is in charge <str<strong>on</strong>g>of</str<strong>on</strong>g> selecting and<br />
148
assessing input distributors in line with <str<strong>on</strong>g>the</str<strong>on</strong>g> standards set by <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Input<br />
Commissi<strong>on</strong>. The agricultural services under <str<strong>on</strong>g>the</str<strong>on</strong>g> Ministry <str<strong>on</strong>g>of</str<strong>on</strong>g> Agriculture<br />
exercise <str<strong>on</strong>g>the</str<strong>on</strong>g>ir prerogatives in accordance with <str<strong>on</strong>g>the</str<strong>on</strong>g> existing relevant laws and<br />
regulati<strong>on</strong>s. At <str<strong>on</strong>g>the</str<strong>on</strong>g> beginning <str<strong>on</strong>g>of</str<strong>on</strong>g> every agricultural seas<strong>on</strong>, CAGIA invites<br />
Benin agricultural input distributi<strong>on</strong> private firms to make bids for <str<strong>on</strong>g>the</str<strong>on</strong>g> supply<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> inputs to village cott<strong>on</strong> producer associati<strong>on</strong>s.<br />
1. Marketing <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Inputs<br />
The marketing <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> inputs is d<strong>on</strong>e by nati<strong>on</strong>al private firms selected to<br />
distribute inputs. Only <strong>on</strong>e firm sells cott<strong>on</strong> inputs to farmers <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> same<br />
district. Upfr<strong>on</strong>t sales are d<strong>on</strong>e by both cott<strong>on</strong> farmers’ village associati<strong>on</strong>s<br />
and individual farmers. But sales <strong>on</strong> credit are d<strong>on</strong>e by cott<strong>on</strong> farmers’ village<br />
associati<strong>on</strong>s <strong>on</strong>ly <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> basis <str<strong>on</strong>g>of</str<strong>on</strong>g> order form. District farmers’ organizati<strong>on</strong>s<br />
have 30 calendar days, starting <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> date <str<strong>on</strong>g>the</str<strong>on</strong>g> ceding price <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> inputs is<br />
set, to collect and distribute to village associati<strong>on</strong>s input order forms. The<br />
price must be set at least 21 days after distributors have been notified <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
selecti<strong>on</strong>s. Distributors selected have a maximum <str<strong>on</strong>g>of</str<strong>on</strong>g> 120 days to deliver to<br />
cott<strong>on</strong> farmers’ associati<strong>on</strong>s <str<strong>on</strong>g>the</str<strong>on</strong>g> inputs ordered. They must transmit to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
President <str<strong>on</strong>g>of</str<strong>on</strong>g> CAGIA at least 30 days after receiving order forms from cott<strong>on</strong><br />
farmers’ village associati<strong>on</strong>s at least pro<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>of</str<strong>on</strong>g> order from a manufacturer<br />
(acknowledgement <str<strong>on</strong>g>of</str<strong>on</strong>g> receipt issued by a manufacturer, copies <str<strong>on</strong>g>of</str<strong>on</strong>g> letter <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
credit, copies <str<strong>on</strong>g>of</str<strong>on</strong>g> bill <str<strong>on</strong>g>of</str<strong>on</strong>g> lading, copies <str<strong>on</strong>g>of</str<strong>on</strong>g> test certificates, etc.). If <str<strong>on</strong>g>the</str<strong>on</strong>g>y fail to<br />
do so, <str<strong>on</strong>g>the</str<strong>on</strong>g>y are c<strong>on</strong>sidered wanting and <str<strong>on</strong>g>the</str<strong>on</strong>g>refore replaced.<br />
2. Type and Quality <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Inputs<br />
CRA-CF is <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly competent authority that determines <str<strong>on</strong>g>the</str<strong>on</strong>g> type,<br />
compositi<strong>on</strong>, quality, packaging and labeling <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> fertilizers for<br />
marketing in Benin. In accordance with existing legislati<strong>on</strong>, CNAC and<br />
CRA-CF are <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly competent bodies that determine <str<strong>on</strong>g>the</str<strong>on</strong>g> type, compositi<strong>on</strong>,<br />
quality, packaging and labeling <str<strong>on</strong>g>of</str<strong>on</strong>g> pesticides for marketing in Benin. The<br />
CRA-CF and <str<strong>on</strong>g>the</str<strong>on</strong>g> SPVCP are <str<strong>on</strong>g>the</str<strong>on</strong>g> bodies competent to c<strong>on</strong>trol <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
inputs. CAGIA checks <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> inputs before <str<strong>on</strong>g>the</str<strong>on</strong>g>y are transported<br />
out <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> factory for distributi<strong>on</strong>. CRA-CF and SPVCP also inspect <str<strong>on</strong>g>the</str<strong>on</strong>g>m<br />
before <str<strong>on</strong>g>the</str<strong>on</strong>g>y are used. Once <str<strong>on</strong>g>the</str<strong>on</strong>g> quality c<strong>on</strong>trol results are out, distributors are<br />
authorized to distribute <str<strong>on</strong>g>the</str<strong>on</strong>g> inputs. However, CRA-CF and SPVCP can<br />
tentatively authorize <str<strong>on</strong>g>the</str<strong>on</strong>g> distributi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs based <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> first quality<br />
c<strong>on</strong>trol results. In case <str<strong>on</strong>g>the</str<strong>on</strong>g> results <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d test and counter-tests are<br />
below standard, <str<strong>on</strong>g>the</str<strong>on</strong>g> distributors c<strong>on</strong>cerned must withdraw all <str<strong>on</strong>g>the</str<strong>on</strong>g> defective<br />
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inputs at <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own expense. The cost <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> tests are borne by <str<strong>on</strong>g>the</str<strong>on</strong>g> distributors.<br />
CAGIA has <str<strong>on</strong>g>the</str<strong>on</strong>g> authority to take samples <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> inputs for testing when <str<strong>on</strong>g>the</str<strong>on</strong>g>y<br />
are distributed am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> farmers’ village associati<strong>on</strong>s. It has absolute<br />
powers to inspect and test inputs and recommend, if need be, to that <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Cott<strong>on</strong> Input Commissi<strong>on</strong> repeal a distributi<strong>on</strong> c<strong>on</strong>tract.<br />
3. Sale Price <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Inputs<br />
The upfr<strong>on</strong>t and credit sale price <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> inputs are fixed by <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong><br />
Input Commissi<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g>oretically authorized by <str<strong>on</strong>g>the</str<strong>on</strong>g> government 21 days<br />
after price proposals are made. All cott<strong>on</strong> fertilizers, just like cott<strong>on</strong><br />
insecticides, are sold at a uniform price throughout Benin. The price <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
processing machines is also <str<strong>on</strong>g>the</str<strong>on</strong>g> same all over <str<strong>on</strong>g>the</str<strong>on</strong>g> country. Since price<br />
equalizati<strong>on</strong> has been made necessary because <str<strong>on</strong>g>of</str<strong>on</strong>g> uniform prices <str<strong>on</strong>g>of</str<strong>on</strong>g> goods all<br />
over Benin, a specific loan repayment price for input is fixed toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r with<br />
expenses specific to <str<strong>on</strong>g>the</str<strong>on</strong>g> area <str<strong>on</strong>g>of</str<strong>on</strong>g> every distributor plus a mark-up <str<strong>on</strong>g>of</str<strong>on</strong>g> 3% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
turnover.<br />
4. Recovery <str<strong>on</strong>g>of</str<strong>on</strong>g> Loans for Inputs<br />
During every agricultural seas<strong>on</strong>, input distributors grant to cott<strong>on</strong> producers<br />
loans that <str<strong>on</strong>g>the</str<strong>on</strong>g> distributors have acquired from banks through a guarantee. The<br />
loans are <str<strong>on</strong>g>the</str<strong>on</strong>g>n recovered by <str<strong>on</strong>g>the</str<strong>on</strong>g> Loan Payment and Recovery Bureau (CSPR)<br />
and paid to <str<strong>on</strong>g>the</str<strong>on</strong>g> distributors by 16 December <str<strong>on</strong>g>of</str<strong>on</strong>g> every year after payments to<br />
farmers' organizati<strong>on</strong>s are deducted <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> same day. The payments are added<br />
to <str<strong>on</strong>g>the</str<strong>on</strong>g> payments made by ginners to producers before <str<strong>on</strong>g>the</str<strong>on</strong>g>y start delivering<br />
cott<strong>on</strong>-grains. The CSPR levies a fee <str<strong>on</strong>g>of</str<strong>on</strong>g> 1% <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> loans recovered as<br />
c<strong>on</strong>tributi<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> operati<strong>on</strong> costs <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> CSPR and CAGIA-BENIN.<br />
5. Selecti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Distributors <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Inputs<br />
A sole input distributor is posted to each district. So aspiring distributors<br />
must first <str<strong>on</strong>g>of</str<strong>on</strong>g> all be selected by farmers' organizati<strong>on</strong>s. They must prove to<br />
CAGIA-BENIN that <str<strong>on</strong>g>the</str<strong>on</strong>g>y have requisite technical and financial ability to<br />
fulfill producers' needs. A distributor is c<strong>on</strong>sidered selected for a district if,<br />
by a simple majority, <str<strong>on</strong>g>the</str<strong>on</strong>g> farmers' organizati<strong>on</strong>s notify him that he can buy or<br />
has been reselected. In case <str<strong>on</strong>g>the</str<strong>on</strong>g> farmers' organizati<strong>on</strong>s fail to reach a majority,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> Vote Counting Commissi<strong>on</strong> shall deliberate to select a distributor for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
district. The distributors selected must be able to supply all <str<strong>on</strong>g>the</str<strong>on</strong>g> fertilizers and<br />
insecticides. They must also indicate <str<strong>on</strong>g>the</str<strong>on</strong>g>ir CAF COTONOU prices. After<br />
distributors have provided pro<str<strong>on</strong>g>of</str<strong>on</strong>g>s <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir technical and financial abilities,<br />
CAGIA-BENIN will, at first, shortlist those selected by farmers'<br />
150
organizati<strong>on</strong>s. Both previous and new candidates are shortlisted. The<br />
shortlisting <str<strong>on</strong>g>of</str<strong>on</strong>g> previous candidates is d<strong>on</strong>e through a copy <str<strong>on</strong>g>of</str<strong>on</strong>g> a reselecti<strong>on</strong><br />
applicati<strong>on</strong> form filled in by a farmers' organizati<strong>on</strong> as well as <str<strong>on</strong>g>the</str<strong>on</strong>g> original <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
a CAGIA-BENIN form. A distributor cannot be shortlisted if all <str<strong>on</strong>g>the</str<strong>on</strong>g> districts<br />
that chose him as distributor account for less than 5% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> farms <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Benin.<br />
Fur<str<strong>on</strong>g>the</str<strong>on</strong>g>rmore, CAGIA-BENIN c<strong>on</strong>siders <str<strong>on</strong>g>the</str<strong>on</strong>g> financial indicators provided by<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> distributors shortlisted and fixes per produce a reference CAF price,<br />
which will be ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r <str<strong>on</strong>g>the</str<strong>on</strong>g> lowest CAF price acquired am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> prices<br />
proposed by shortlisted distributors or <str<strong>on</strong>g>the</str<strong>on</strong>g> CAF price acquired from <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
internati<strong>on</strong>al market. CAGIA-BENIN <str<strong>on</strong>g>the</str<strong>on</strong>g>n requests each shortlisted<br />
distributor to align his CAF prices with <str<strong>on</strong>g>the</str<strong>on</strong>g> CAF reference prices. Short listed<br />
candidates are finally selected <strong>on</strong>ly if <str<strong>on</strong>g>the</str<strong>on</strong>g>y align all <str<strong>on</strong>g>the</str<strong>on</strong>g>ir CAF prices with <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
CAF reference prices.<br />
Shortlisted distributors and/or reselected distributors who have <str<strong>on</strong>g>of</str<strong>on</strong>g>fered <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
lowest CAF price per hectare for fertilizer and insecticide receive allocati<strong>on</strong>s<br />
as b<strong>on</strong>uses from <str<strong>on</strong>g>the</str<strong>on</strong>g> districts depending <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> distributor’s indicated<br />
financial ability. During each farming seas<strong>on</strong>, a c<strong>on</strong>tract is signed between<br />
farmers' organizati<strong>on</strong>s and <str<strong>on</strong>g>the</str<strong>on</strong>g> distributor <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> district. The c<strong>on</strong>tract is<br />
endorsed by <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Inputs Commissi<strong>on</strong>. The c<strong>on</strong>tract can be renewed for<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> following seas<strong>on</strong> at <str<strong>on</strong>g>the</str<strong>on</strong>g> written request <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers' organizati<strong>on</strong>s. It is<br />
addressed to <str<strong>on</strong>g>the</str<strong>on</strong>g> distributor with a copy and acknowledgement <str<strong>on</strong>g>of</str<strong>on</strong>g> receipt to<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> President <str<strong>on</strong>g>of</str<strong>on</strong>g> CAGIA-BENIN. Such a request is usually approved by<br />
CAGIA-BENIN so as to ensure that c<strong>on</strong>tracts are indeed renewed.<br />
6. Purchases by Farmers' Organizati<strong>on</strong>s<br />
Each farmers' organizati<strong>on</strong> chooses its cott<strong>on</strong> inputs distributor. So each<br />
farmers' organizati<strong>on</strong> expresses to its chosen distributor its intenti<strong>on</strong> to buy or<br />
to renew a c<strong>on</strong>tract. If a distributor acquires a simple majority <str<strong>on</strong>g>of</str<strong>on</strong>g> individuals<br />
expressing <str<strong>on</strong>g>the</str<strong>on</strong>g>ir desire to purchase from him or <str<strong>on</strong>g>the</str<strong>on</strong>g> farmers' organizati<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
a district expressing <str<strong>on</strong>g>the</str<strong>on</strong>g>ir desire to renew his c<strong>on</strong>tract, he is <str<strong>on</strong>g>the</str<strong>on</strong>g>refore<br />
c<strong>on</strong>sidered <str<strong>on</strong>g>the</str<strong>on</strong>g> distributor selected by all <str<strong>on</strong>g>the</str<strong>on</strong>g> farmers' organizati<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> that<br />
district. In case <str<strong>on</strong>g>the</str<strong>on</strong>g>re is failure to choose a distributor by an outright<br />
majority, <str<strong>on</strong>g>the</str<strong>on</strong>g> Vote Counting Commissi<strong>on</strong> shall deliberate to choose a<br />
distributor for <str<strong>on</strong>g>the</str<strong>on</strong>g> district. Selecti<strong>on</strong> and c<strong>on</strong>tract renewal standards as well as<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> planned supply <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs every year are clearly spelt out in <str<strong>on</strong>g>the</str<strong>on</strong>g> terms <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
reference.<br />
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IV. DIFFICULTIES TO INCREASE COTTON PRODUCE IN<br />
BENIN<br />
Four agricultural seas<strong>on</strong>s after <str<strong>on</strong>g>the</str<strong>on</strong>g> introducti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> reforms in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong><br />
industry, <str<strong>on</strong>g>the</str<strong>on</strong>g> following difficulties impede an increase in cott<strong>on</strong> produce in<br />
Benin:<br />
• lack <str<strong>on</strong>g>of</str<strong>on</strong>g> a regulatory framework after divestiture;<br />
• n<strong>on</strong>-compliance by some players with <str<strong>on</strong>g>the</str<strong>on</strong>g> rules by <str<strong>on</strong>g>the</str<strong>on</strong>g> various<br />
pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>s;<br />
• outcome <str<strong>on</strong>g>of</str<strong>on</strong>g> bids for <str<strong>on</strong>g>the</str<strong>on</strong>g> selecti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> input distributors are always<br />
c<strong>on</strong>tested and parallel agricultural inputs are provided by some<br />
unlicensed operators;<br />
• increase in <str<strong>on</strong>g>the</str<strong>on</strong>g> delivery prices <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs;<br />
• poor training <str<strong>on</strong>g>of</str<strong>on</strong>g> grassroots producers after <str<strong>on</strong>g>the</str<strong>on</strong>g> introducti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> reforms<br />
in <str<strong>on</strong>g>the</str<strong>on</strong>g> rural sector by <str<strong>on</strong>g>the</str<strong>on</strong>g> World Bank thus affecting producti<strong>on</strong>;<br />
• ginners disagree <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> distributi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>-grain because <str<strong>on</strong>g>of</str<strong>on</strong>g> overginning<br />
(587,500 t<strong>on</strong>s) compared with 350,000 t<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> nati<strong>on</strong>al<br />
produce, which c<strong>on</strong>tinues to decline;<br />
• some ginners have refused to gin because <str<strong>on</strong>g>of</str<strong>on</strong>g> a drop in world prices <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
cott<strong>on</strong>;<br />
• poor management <str<strong>on</strong>g>of</str<strong>on</strong>g> some farmers' organizati<strong>on</strong>s thus bringing<br />
complaints <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> way <str<strong>on</strong>g>the</str<strong>on</strong>g> loans are manned (guarantee mechanism<br />
in most village groupings);<br />
• lack <str<strong>on</strong>g>of</str<strong>on</strong>g> grassroots' c<strong>on</strong>fidence in <str<strong>on</strong>g>the</str<strong>on</strong>g> managers <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers'<br />
organizati<strong>on</strong>s;<br />
All <str<strong>on</strong>g>the</str<strong>on</strong>g>se disputes and <str<strong>on</strong>g>the</str<strong>on</strong>g>ir attendant disrupti<strong>on</strong>s adversely affect <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
efficiency <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> entire cott<strong>on</strong> industry in Benin. They are for instance:<br />
• agricultural inputs are belatedly ordered bring about higher costs, late<br />
supply <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs, vulnerability <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> plants to parasites and low<br />
yield;<br />
• l<strong>on</strong>g delay in paying producers for <str<strong>on</strong>g>the</str<strong>on</strong>g>ir cott<strong>on</strong>-grain;<br />
• arrears estimated currently at 9 billi<strong>on</strong> CFA francs;<br />
• dwindling resources for important activities such as research,<br />
farmland, extensi<strong>on</strong>, training, quality c<strong>on</strong>trol, etc…);<br />
• disrupted producti<strong>on</strong>, marketing, ginning and seed distributi<strong>on</strong>;<br />
• disrupted activities <str<strong>on</strong>g>of</str<strong>on</strong>g> management instituti<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry<br />
such as <str<strong>on</strong>g>the</str<strong>on</strong>g> AIC and <str<strong>on</strong>g>the</str<strong>on</strong>g> CSPR.<br />
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V. REGULATION OF THE USE OF GENETICALLY MODIFIED<br />
COTTON<br />
Genetically modified organisms have become, over <str<strong>on</strong>g>the</str<strong>on</strong>g> past few years, a<br />
burning and c<strong>on</strong>troversial issue <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al scene. In fact several<br />
familiarizati<strong>on</strong> and sensitizati<strong>on</strong> meetings were organized in 2001 by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Nati<strong>on</strong>al Agricultural Research Institute <str<strong>on</strong>g>of</str<strong>on</strong>g> Benin (INRA B). Since 6 March<br />
2002, <str<strong>on</strong>g>the</str<strong>on</strong>g> government <str<strong>on</strong>g>of</str<strong>on</strong>g> Benin has been compelled to abide by a five-year<br />
FAO moratorium imposed <strong>on</strong> African countries. The moratorium requires a<br />
media campaign and a nati<strong>on</strong>al committee that ensures <str<strong>on</strong>g>the</str<strong>on</strong>g> applicati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
measures c<strong>on</strong>cerning genetically modified organisms, studies and bills to<br />
parliament. All <str<strong>on</strong>g>the</str<strong>on</strong>g>se activities are financed by <str<strong>on</strong>g>the</str<strong>on</strong>g> FAO. The tasks outlined in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> moratorium are being carried out:<br />
• Researchers <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Nati<strong>on</strong>al Agricultural Research Institute <str<strong>on</strong>g>of</str<strong>on</strong>g> Benin<br />
(INRAB) actively takes part in brainstorming sessi<strong>on</strong>s <strong>on</strong> genetically<br />
modified organisms at both nati<strong>on</strong>al and internati<strong>on</strong>al levels;<br />
• INRAB houses many documents <strong>on</strong> genetically modified organisms<br />
and has initiated several familiarizati<strong>on</strong> ga<str<strong>on</strong>g>the</str<strong>on</strong>g>rings;<br />
• The Nati<strong>on</strong>al Bio-security Committee has already been set up.<br />
VI. ACTIONS TAKEN BY BENIN REGARDING COTTON AT THE<br />
WTO<br />
On 24 April 2003, Benin pushed with Brazil for legal acti<strong>on</strong> against <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
United States to secure compensati<strong>on</strong> for <str<strong>on</strong>g>the</str<strong>on</strong>g> damages caused by <str<strong>on</strong>g>the</str<strong>on</strong>g> heavy<br />
farm subsidies that America grants to its cott<strong>on</strong> producers, which brought<br />
about an imbalance in member countries <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO.<br />
Since <str<strong>on</strong>g>the</str<strong>on</strong>g>n Benin has tabled a resoluti<strong>on</strong> soliciting <str<strong>on</strong>g>the</str<strong>on</strong>g> solidarity <str<strong>on</strong>g>of</str<strong>on</strong>g> ACP and<br />
ECOWAS countries affected by <str<strong>on</strong>g>the</str<strong>on</strong>g> American cott<strong>on</strong> subsidies. Moves have<br />
been made to ensure Benin's active participati<strong>on</strong> in all negotiati<strong>on</strong>s within <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
WTO to argue <str<strong>on</strong>g>the</str<strong>on</strong>g> case for cott<strong>on</strong>. In this regard, Benin has participated in<br />
several meetings including <str<strong>on</strong>g>the</str<strong>on</strong>g> ministerial meeting <strong>on</strong> regi<strong>on</strong>al c<strong>on</strong>sultati<strong>on</strong>s<br />
<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry in <str<strong>on</strong>g>the</str<strong>on</strong>g> UEMOA area, which took place in<br />
Ouagadougou from 16 to 20 June 2003 and <str<strong>on</strong>g>the</str<strong>on</strong>g> 5<br />
153<br />
th WTO ministerial<br />
c<strong>on</strong>ference, which took place from 10 to 14 September 2003 in Cancun.<br />
Fur<str<strong>on</strong>g>the</str<strong>on</strong>g>rmore, Benin hosted <str<strong>on</strong>g>the</str<strong>on</strong>g> workshop <strong>on</strong> cott<strong>on</strong> organized in Cot<strong>on</strong>ou<br />
from 23 to 24 March 2004 by <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO secretariat.
On 1 st August 2004, <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO General Council adopted major decisi<strong>on</strong>s <strong>on</strong><br />
cott<strong>on</strong> c<strong>on</strong>cerning not <strong>on</strong>ly Benin but all developing countries that are<br />
member countries <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO. The decisi<strong>on</strong>s are <str<strong>on</strong>g>the</str<strong>on</strong>g> backb<strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
negotiati<strong>on</strong>s that have taken place to date. The decisi<strong>on</strong>s are mainly as<br />
follows:<br />
• The Doha Ministerial Declarati<strong>on</strong> requires that all forms <str<strong>on</strong>g>of</str<strong>on</strong>g> export<br />
subsidies be reduced and be gradually removed. Member countries<br />
have agreed to work out ways <str<strong>on</strong>g>of</str<strong>on</strong>g> removing all forms <str<strong>on</strong>g>of</str<strong>on</strong>g> export<br />
subsidies and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r export measures at a reas<strong>on</strong>able deadline.<br />
• The start <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> current phase <str<strong>on</strong>g>of</str<strong>on</strong>g> negotiati<strong>on</strong>s <strong>on</strong> agriculture is <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
mandate outlined under Paragraph 13 <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Doha Declarati<strong>on</strong>. The<br />
mandate is based <strong>on</strong> a l<strong>on</strong>g-term reform <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> agreement <strong>on</strong><br />
agriculture, which requires that a fair trade system be established and<br />
market-oriented through a fundamental reform programme.<br />
• In order to achieve this goal, <str<strong>on</strong>g>the</str<strong>on</strong>g> approach must c<strong>on</strong>sist <str<strong>on</strong>g>of</str<strong>on</strong>g> a special<br />
treatment for developing countries <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO. Since agriculture is<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> major significance for developing member countries, such<br />
countries must c<strong>on</strong>duct agricultural policies that support <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
development objectives, poverty reducti<strong>on</strong> strategies, food security<br />
and livelihood.<br />
• The General Council recognizes <str<strong>on</strong>g>the</str<strong>on</strong>g> importance <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> for some<br />
countries, especially developing countries and least developed<br />
countries. So cott<strong>on</strong> will be dealt with emphatically during<br />
negotiati<strong>on</strong>s <strong>on</strong> agriculture. The provisi<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> framework<br />
identified as well as <str<strong>on</strong>g>the</str<strong>on</strong>g> sectoral initiative <strong>on</strong> cott<strong>on</strong> are a basis for<br />
this approach. The extraordinary sessi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Agricultural<br />
Committee will give priority to <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> issue regardless <str<strong>on</strong>g>of</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
sectoral initiatives. A sub-committee <strong>on</strong> cott<strong>on</strong> shall meet regularly<br />
and shall report to <str<strong>on</strong>g>the</str<strong>on</strong>g> extraordinary sessi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Agricultural<br />
Committee, which will c<strong>on</strong>sider <str<strong>on</strong>g>the</str<strong>on</strong>g> progress made. The deliberati<strong>on</strong>s<br />
will address all policies that distort trade in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector,<br />
particularly market access, internal support and export competiti<strong>on</strong> as<br />
stipulated under <str<strong>on</strong>g>the</str<strong>on</strong>g> Doha Declarati<strong>on</strong>.<br />
• Coherence will be at <str<strong>on</strong>g>the</str<strong>on</strong>g> centre <str<strong>on</strong>g>of</str<strong>on</strong>g> negotiati<strong>on</strong>s. The undertakings and<br />
measures outlined shall be carried out according to a specific<br />
schedule and modalities. The undertakings shall be carried out at<br />
specific periods. The schedule shall be coherent with <str<strong>on</strong>g>the</str<strong>on</strong>g> internal<br />
154
eforms <str<strong>on</strong>g>of</str<strong>on</strong>g> member countries. In this regard, <str<strong>on</strong>g>the</str<strong>on</strong>g> General Council<br />
shall instruct <str<strong>on</strong>g>the</str<strong>on</strong>g> Director General to c<strong>on</strong>sult with relevant<br />
internati<strong>on</strong>al organizati<strong>on</strong>s, including <str<strong>on</strong>g>the</str<strong>on</strong>g> Brett<strong>on</strong> Woods instituti<strong>on</strong>s,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> Food and Agriculture Organizati<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> Internati<strong>on</strong>al Trade<br />
Centre to gear existing programmes and all additi<strong>on</strong>al resources<br />
toward <str<strong>on</strong>g>the</str<strong>on</strong>g> development <str<strong>on</strong>g>of</str<strong>on</strong>g> ec<strong>on</strong>omies in which cott<strong>on</strong> is <str<strong>on</strong>g>of</str<strong>on</strong>g> utmost<br />
significance.<br />
155
156
Abstract<br />
SUDAN COTTON RESEARCH CHALLENGES AND<br />
EFFICIENCY ENHANCEMENT<br />
El Fadil Abdel Rahman Babiker<br />
Coordinator Cott<strong>on</strong> Research Program, &<br />
Abdin Mohamed Ali El Faki<br />
General Director, Sudan Cott<strong>on</strong> Company Ltd.<br />
The year 2004 marked <str<strong>on</strong>g>the</str<strong>on</strong>g> Massey Jubilee <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> research program with<br />
more than 50 varieties and improved lines had been released, in additi<strong>on</strong> to<br />
varying recommendati<strong>on</strong>s <strong>on</strong> cultural practices and pest management. In spite <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
this, <str<strong>on</strong>g>the</str<strong>on</strong>g> average lint yield is 420kg/ha as compared to <str<strong>on</strong>g>the</str<strong>on</strong>g> world average <str<strong>on</strong>g>of</str<strong>on</strong>g> 635<br />
kg/ha. Hence, for <str<strong>on</strong>g>the</str<strong>on</strong>g> Sudan to remain competitive in cott<strong>on</strong> industry, future<br />
research perspective should be cost effective, best fitted into <str<strong>on</strong>g>the</str<strong>on</strong>g> integrated crop<br />
management strategy, generating technologies that are highly adoptable and<br />
commercially appealing. The need for internati<strong>on</strong>al or regi<strong>on</strong>al cott<strong>on</strong> forums<br />
under <str<strong>on</strong>g>the</str<strong>on</strong>g> auspices <str<strong>on</strong>g>of</str<strong>on</strong>g> IDB to enhance scientific interacti<strong>on</strong> and commodity<br />
promoti<strong>on</strong>, should be a focused priority.<br />
I. INTRODUCTION<br />
Though, <str<strong>on</strong>g>the</str<strong>on</strong>g> year 2004 marks <str<strong>on</strong>g>the</str<strong>on</strong>g> 100 th anniversary <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Research<br />
Program, commercial cott<strong>on</strong> had been grown in <str<strong>on</strong>g>the</str<strong>on</strong>g> Eastern Sudan (Tokar Delta)<br />
since 1867 where traditi<strong>on</strong>al organic farming is still in practice. Since <str<strong>on</strong>g>the</str<strong>on</strong>g>n, cott<strong>on</strong><br />
has historically acquired str<strong>on</strong>g presence in Sudanese agriculture, both as a<br />
leading cash crop and as a foreign exchange earner for <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al ec<strong>on</strong>omy. The<br />
objectives <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> research program have been problem oriented, measuring up to<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> emerging challenges and can be summarized as follows:<br />
• Varietal improvement for higher yields, earliness, disease and insect<br />
resistance.<br />
• Improvement and diversificati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> fibre quality by breeding new<br />
varieties, matching <str<strong>on</strong>g>the</str<strong>on</strong>g> progress in <str<strong>on</strong>g>the</str<strong>on</strong>g> textile and spinning technology.<br />
• Vertical upgrading <str<strong>on</strong>g>of</str<strong>on</strong>g> productivity via generati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cost effective<br />
technological packages that fit into <str<strong>on</strong>g>the</str<strong>on</strong>g> integrated crop management<br />
(ICM) strategy .<br />
157
Today, however, cott<strong>on</strong> producti<strong>on</strong> is subjected to crucial challenges such as:<br />
stagnating low yields, escalating costs <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong>, low cott<strong>on</strong> prices, inefficient<br />
pest management, stickiness, yield variability within <str<strong>on</strong>g>the</str<strong>on</strong>g> same locati<strong>on</strong>, late cott<strong>on</strong><br />
picking, subsidies in <str<strong>on</strong>g>the</str<strong>on</strong>g> developed countries, diminishing finances and<br />
competiti<strong>on</strong> from o<str<strong>on</strong>g>the</str<strong>on</strong>g>r crops that have sometimes challenged <str<strong>on</strong>g>the</str<strong>on</strong>g> merits <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
c<strong>on</strong>tinuing cott<strong>on</strong> cultivati<strong>on</strong>. Yet, all <str<strong>on</strong>g>the</str<strong>on</strong>g> parties involved in cott<strong>on</strong> producti<strong>on</strong><br />
are optimistic that Sudanese cott<strong>on</strong> would regain and even surpass its former<br />
positi<strong>on</strong>, through enhancement and implementati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> technology. For this<br />
prospect to become reality, significant improvements in productivity ,instituti<strong>on</strong>al,<br />
policy and financial aspects must be made if <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry is to prosper and<br />
achieve competitiveness in <str<strong>on</strong>g>the</str<strong>on</strong>g> global ec<strong>on</strong>omy. These improvements have to be<br />
taken as challenges by <str<strong>on</strong>g>the</str<strong>on</strong>g> whole spectrum involved in cott<strong>on</strong> sector i.e.<br />
researchers, extensi<strong>on</strong>ist, producti<strong>on</strong> agr<strong>on</strong>omist, ec<strong>on</strong>omist and policy makers.<br />
II. CHALLENGES TO COTTON PRODUCTION FROM RESEARCH<br />
PERSPECTIVE<br />
1. Stagnating Low Yields<br />
The number <str<strong>on</strong>g>of</str<strong>on</strong>g> released varieties to date totaled above 50 . However, <str<strong>on</strong>g>the</str<strong>on</strong>g> average<br />
lint yield is about 420 kg/ha, estimated to be 1 /3 <str<strong>on</strong>g>of</str<strong>on</strong>g> research plots and 2 /3 <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
world average ( 635kg/ha) and by far less than that <str<strong>on</strong>g>of</str<strong>on</strong>g> Egypt and Syria as<br />
exhibited in figure 1.<br />
Lint yield kg/ha<br />
1600<br />
1400<br />
1200<br />
1000<br />
800<br />
600<br />
400<br />
200<br />
0<br />
2. Diseases<br />
Figure 1. Average Lint Yield<br />
Sudan Eygpt Syria C<strong>on</strong>go World Mean<br />
158<br />
90/91<br />
94/95<br />
2000/1<br />
2001/2<br />
The three major diseases are leafcrul, bacterial blight and fusarium wilt with <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
outbreak <str<strong>on</strong>g>of</str<strong>on</strong>g> leaf curl and bacterial blight diseases, <str<strong>on</strong>g>the</str<strong>on</strong>g> program was geared towards
developing resistant varieties utilizing <str<strong>on</strong>g>the</str<strong>on</strong>g> available gene pool. The gene<br />
combinati<strong>on</strong> B2B6 gave adequate and durable protecti<strong>on</strong> against <str<strong>on</strong>g>the</str<strong>on</strong>g> prevailing<br />
bacterial blight race. The appearance <str<strong>on</strong>g>of</str<strong>on</strong>g> a new race in <str<strong>on</strong>g>the</str<strong>on</strong>g> late sixties has been a<br />
great challenge that prompted <str<strong>on</strong>g>the</str<strong>on</strong>g> search for new genes combinati<strong>on</strong>s. Sources <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
resistance were identified and different gene combinati<strong>on</strong>s c<strong>on</strong>ferring satisfactory<br />
resistance are <strong>on</strong> final evaluati<strong>on</strong>. The leafcurl, however, was c<strong>on</strong>trolled in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
barbadense material through <str<strong>on</strong>g>the</str<strong>on</strong>g> incorporati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> a single partially dominant gene.<br />
Fusarium wilt resistance was also fitted into <str<strong>on</strong>g>the</str<strong>on</strong>g> newly released barbadense<br />
material.<br />
3. Pest Management<br />
The major insects pest are : Bollworms, Jassids, thrips, flea beatles, whiteflies and<br />
aphids. The chemical pesticides have been <str<strong>on</strong>g>the</str<strong>on</strong>g> main method <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>trol but has <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
following problems:<br />
• Highly costive (30-40% <str<strong>on</strong>g>of</str<strong>on</strong>g> total cost).<br />
• N<strong>on</strong>-selectivity <str<strong>on</strong>g>of</str<strong>on</strong>g> insecticides used, being toxic to both insects and natural<br />
enemies.<br />
• Flare up <str<strong>on</strong>g>of</str<strong>on</strong>g> sec<strong>on</strong>dary pests i.e. Bollworm used to be sec<strong>on</strong>dary pests in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
1960’s and now it is <str<strong>on</strong>g>the</str<strong>on</strong>g> major pest.<br />
• Pesticides resistance where insects like bollworms and whiteflies are<br />
developing resistance.<br />
Pest management has been a challenging problem to researchers, hence, FAO<br />
sp<strong>on</strong>sored IPM Project was executed in <str<strong>on</strong>g>the</str<strong>on</strong>g> 1980-1990 with precise<br />
recommendati<strong>on</strong>s <strong>on</strong>:<br />
• Ec<strong>on</strong>omic threshold level (ETL)<br />
• Gradual adopti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> n<strong>on</strong>-sprayed cott<strong>on</strong> strategy.<br />
• Pesticides management to be cost effective.<br />
• Insecticides should be as comp<strong>on</strong>ents into IPM strategy but not <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly<br />
method <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>trol.<br />
4. Yield Variability within <str<strong>on</strong>g>the</str<strong>on</strong>g> Same Locati<strong>on</strong><br />
Farmers in <str<strong>on</strong>g>the</str<strong>on</strong>g> same locati<strong>on</strong> usually obtain varying yields, despite using <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
same inputs. The variability is in <str<strong>on</strong>g>the</str<strong>on</strong>g> range <str<strong>on</strong>g>of</str<strong>on</strong>g> 300-1200kg/ha <str<strong>on</strong>g>of</str<strong>on</strong>g> lint . Thus<br />
efficient agr<strong>on</strong>omic management <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> basic cultural practices and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
understanding <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> inputs (Water, fertilizers. Insecticides) interacti<strong>on</strong>s (i.e.<br />
159
avoiding rank growth and unnecessary use <str<strong>on</strong>g>of</str<strong>on</strong>g> insecticides) by producti<strong>on</strong><br />
agr<strong>on</strong>omist and farmers is <str<strong>on</strong>g>the</str<strong>on</strong>g> decisive factor in enhancing <str<strong>on</strong>g>the</str<strong>on</strong>g> productivity.<br />
5. Stickiness<br />
The problem started in <str<strong>on</strong>g>the</str<strong>on</strong>g> early 1960’s but <str<strong>on</strong>g>of</str<strong>on</strong>g> little importance. The main<br />
c<strong>on</strong>taminant causing <str<strong>on</strong>g>the</str<strong>on</strong>g> stickiness was <str<strong>on</strong>g>the</str<strong>on</strong>g> h<strong>on</strong>eydew secreti<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> whitefly<br />
(Bemisia tabaci). During <str<strong>on</strong>g>the</str<strong>on</strong>g> 1980’s it became more serious and c<strong>on</strong>stituted a<br />
bottle-neck to <str<strong>on</strong>g>the</str<strong>on</strong>g> marketability <str<strong>on</strong>g>of</str<strong>on</strong>g> Sudan cott<strong>on</strong>. The problem is more pr<strong>on</strong>ounced<br />
<strong>on</strong> sprayed cott<strong>on</strong> as compared to <str<strong>on</strong>g>the</str<strong>on</strong>g> n<strong>on</strong>-sprayed <strong>on</strong>e. This reflects <str<strong>on</strong>g>the</str<strong>on</strong>g> use <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
n<strong>on</strong>-selective insecticides that are toxic to both insects and natural enemies . It can<br />
also be c<strong>on</strong>trolled by adopting <str<strong>on</strong>g>the</str<strong>on</strong>g> recommended seed rate, timely planting,<br />
optimum irrigati<strong>on</strong>, early picking and <str<strong>on</strong>g>the</str<strong>on</strong>g> recommended crop rotati<strong>on</strong>.<br />
6. High Cost <str<strong>on</strong>g>of</str<strong>on</strong>g> Producti<strong>on</strong><br />
This c<strong>on</strong>tinue to increase, even though yields are stagnating. To sustain cott<strong>on</strong><br />
producti<strong>on</strong>, we have to increase yield more efficiently by decreasing <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
producti<strong>on</strong> cost. Accordingly, farmers characterizati<strong>on</strong> according to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
agr<strong>on</strong>omic management is very important . Thus research recommendati<strong>on</strong>s<br />
should be farmers specific tailored to <str<strong>on</strong>g>the</str<strong>on</strong>g> management ability, efficient use <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
inputs, understanding <str<strong>on</strong>g>of</str<strong>on</strong>g> plant-input interacti<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> projected yield level<br />
ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than blanket recommendati<strong>on</strong>s for all farmers, This will result in reducti<strong>on</strong><br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong>, hence, committed farmers will produce high yields<br />
efficiently at lower cost whereas n<strong>on</strong>-committed farmers will be supplied with<br />
relatively low inputs levels (low cost), since <str<strong>on</strong>g>the</str<strong>on</strong>g>y are producing low yields<br />
anyway. Generati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> multi-disciplinary technological packages fitting <str<strong>on</strong>g>the</str<strong>on</strong>g> ICM<br />
with c<strong>on</strong>comitant reducti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> cost, has been <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> major<br />
objectives <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> research program. Implementati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> this objective,<br />
however, needs a wide scope pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>al visi<strong>on</strong> and understanding via <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
producti<strong>on</strong> agr<strong>on</strong>omists.<br />
7. Machine Planting and Picking<br />
Both cott<strong>on</strong> planters and pickers had been well researched and even commercially<br />
adopted by some schemes during <str<strong>on</strong>g>the</str<strong>on</strong>g> 1970’s and 1980’s were aband<strong>on</strong>ed due to<br />
socioec<strong>on</strong>omic reas<strong>on</strong>s. Today, however, shortage <str<strong>on</strong>g>of</str<strong>on</strong>g> labour is a chr<strong>on</strong>ic problem,<br />
hence, re- introducti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> machine planting and picking is <str<strong>on</strong>g>of</str<strong>on</strong>g> great need.<br />
160
8. Instrument Based Fiber Quality Testing<br />
The price <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> is determined by quality and <str<strong>on</strong>g>the</str<strong>on</strong>g> spinners are more c<strong>on</strong>fident<br />
in instrument based testing as compared to <str<strong>on</strong>g>the</str<strong>on</strong>g> traditi<strong>on</strong>al manual classing. Sudan<br />
started adopting HVI classing system, however, pers<strong>on</strong>nel training and more<br />
instruments are needed.<br />
9. Private Sector Involvement in Research<br />
Cott<strong>on</strong> research is performed via a government run corporati<strong>on</strong> (ARC.) Private<br />
sector involvement in research is not possible at <str<strong>on</strong>g>the</str<strong>on</strong>g> present time because it is a<br />
l<strong>on</strong>g time investment with unpredictable financial c<strong>on</strong>sequences. Therefore, no<br />
local private company is ready to be up to this challenge, unless pr<str<strong>on</strong>g>of</str<strong>on</strong>g>itability is<br />
granted.<br />
10. Biotechnology<br />
We do believe that new technologies must be investigated and researchers should<br />
measure up to <str<strong>on</strong>g>the</str<strong>on</strong>g> standard <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir colleagues in <str<strong>on</strong>g>the</str<strong>on</strong>g> more developed countries.<br />
Genetic engineering being a basic science, should <str<strong>on</strong>g>the</str<strong>on</strong>g>refore be studied for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
emerging future needs, hence, Sudan has biosafety regulati<strong>on</strong>s in place. As far as<br />
Bt cott<strong>on</strong> is c<strong>on</strong>cerned, we have varying insects combinati<strong>on</strong>s (Bollworms,<br />
Jassids, thrips, flea beatle, whiteflies and aphids) that have to be sprayed anyway<br />
.Moreover , <str<strong>on</strong>g>the</str<strong>on</strong>g> feasibility <str<strong>on</strong>g>of</str<strong>on</strong>g> adopting Bt cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> Sudan is questi<strong>on</strong>able due<br />
to <str<strong>on</strong>g>the</str<strong>on</strong>g> expensive patency fees Bt genes are m<strong>on</strong>opolized by private sector and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
low yields <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Sudan cott<strong>on</strong> at present time need an agr<strong>on</strong>omic perfecti<strong>on</strong> ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
than high technology. Never<str<strong>on</strong>g>the</str<strong>on</strong>g>less, biotechnological studies were started via<br />
establishing a molecular markers laboratory at ARC. Two comp<strong>on</strong>ents <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
biotechnological applicati<strong>on</strong>s were approved to be sp<strong>on</strong>sored under <str<strong>on</strong>g>the</str<strong>on</strong>g> IAEA<br />
project. These are:<br />
Producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> doubled haploid cott<strong>on</strong>: Doubled haploid technology provides<br />
powerful tool for accelerati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> breeding program. What needs 5-7 years in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
c<strong>on</strong>venti<strong>on</strong>al breeding can be achieved in <strong>on</strong>e year by DH technology. DH<br />
increases efficiency <str<strong>on</strong>g>of</str<strong>on</strong>g> selecti<strong>on</strong>s, recessive characters can be identified and<br />
selected. We are especially interested to incorporate this technology in our hybrid-<br />
breeding project. Through DH, we can fix <str<strong>on</strong>g>the</str<strong>on</strong>g> hybrid vigor and overcome <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
problem <str<strong>on</strong>g>of</str<strong>on</strong>g> hybrid seed producti<strong>on</strong>.<br />
Molecular tagging <str<strong>on</strong>g>of</str<strong>on</strong>g> useful traits for marker- assisted selecti<strong>on</strong>: This<br />
technology is <str<strong>on</strong>g>of</str<strong>on</strong>g> special significance in selecti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> traits which are o<str<strong>on</strong>g>the</str<strong>on</strong>g>rwise<br />
phenotypically inaccessible. It is also useful in pyramiding <str<strong>on</strong>g>of</str<strong>on</strong>g> genes. For instance,<br />
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you can tag a number <str<strong>on</strong>g>of</str<strong>on</strong>g> genes for a given trait and select for that trait using <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
respective molecular markers. We are planning to use this technology in tagging<br />
useful mutants (fusarium wilt resistance and <str<strong>on</strong>g>the</str<strong>on</strong>g> low seed to fibre attachment<br />
force) and also follows introgressed genomic segments <str<strong>on</strong>g>of</str<strong>on</strong>g> blight resistance wild<br />
species in <str<strong>on</strong>g>the</str<strong>on</strong>g> commercial cultivars.<br />
11. Technology Transfer<br />
Need to be streng<str<strong>on</strong>g>the</str<strong>on</strong>g>ned in order to solve <str<strong>on</strong>g>the</str<strong>on</strong>g> above challenging problems.<br />
Varying technology transfer mechanism had been tried before i.e. Training and<br />
visits and school farmers but <str<strong>on</strong>g>the</str<strong>on</strong>g>y last <strong>on</strong>ly with <str<strong>on</strong>g>the</str<strong>on</strong>g> financed project . Therefore,<br />
sustainable technology transfer depending <strong>on</strong> local budgets with granted support,<br />
and believe from policy makers can <strong>on</strong>ly be effective in handling <str<strong>on</strong>g>the</str<strong>on</strong>g> challenges.<br />
12. Lack <str<strong>on</strong>g>of</str<strong>on</strong>g> Communicati<strong>on</strong><br />
Diversity in producti<strong>on</strong> practices and individual achievement in IDB countries<br />
need to be known by o<str<strong>on</strong>g>the</str<strong>on</strong>g>r members. Success stories <str<strong>on</strong>g>of</str<strong>on</strong>g> developing heat tolerant<br />
varieties, n<strong>on</strong>-sprayed cott<strong>on</strong> with high yield, biotech drought resistance varieties<br />
and <str<strong>on</strong>g>the</str<strong>on</strong>g> yield maximizati<strong>on</strong> project in some countries should be shared. Sudan,<br />
had already started this by sending representative cott<strong>on</strong> sector delegati<strong>on</strong> to Syria<br />
and <str<strong>on</strong>g>the</str<strong>on</strong>g> visit had been very productive.<br />
13. Scarcity <str<strong>on</strong>g>of</str<strong>on</strong>g> Funding for Research<br />
The budget for research is very poor and mostly spent to meet <str<strong>on</strong>g>the</str<strong>on</strong>g> salaries.<br />
However, 80% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> working budget is furnished by <str<strong>on</strong>g>the</str<strong>on</strong>g> Sudan Cott<strong>on</strong> Company.<br />
14. Limited Participati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> Regi<strong>on</strong>al and Internati<strong>on</strong>al C<strong>on</strong>ferences<br />
This was attributed to lack <str<strong>on</strong>g>of</str<strong>on</strong>g> funding in <str<strong>on</strong>g>the</str<strong>on</strong>g> ARC. Moreover, internati<strong>on</strong>al<br />
research institute for cott<strong>on</strong> to help in this regard is not availed. However, <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>going<br />
activities <str<strong>on</strong>g>of</str<strong>on</strong>g> scientific visits and participati<strong>on</strong> in some c<strong>on</strong>ferences is <strong>on</strong>ly<br />
funded by <str<strong>on</strong>g>the</str<strong>on</strong>g> Sudan Cott<strong>on</strong> Company but for small number <str<strong>on</strong>g>of</str<strong>on</strong>g> researchers.<br />
15. Research Capacities<br />
Shortage in laboratory equipment, chemicals and spare parts is a problem. Also,<br />
technical experts for repairing <str<strong>on</strong>g>the</str<strong>on</strong>g> instruments are not up to <str<strong>on</strong>g>the</str<strong>on</strong>g> standards.<br />
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III. FRAMEWORK FOR COOPERATION BETWEEN IDB MEMBER<br />
COUNTRIES<br />
Internati<strong>on</strong>al Research Institute for Cott<strong>on</strong> : This need to be established and<br />
taken as <str<strong>on</strong>g>the</str<strong>on</strong>g> first priority. The mandate <str<strong>on</strong>g>of</str<strong>on</strong>g> this institute should cover all specialties<br />
related to cott<strong>on</strong> i.e. producti<strong>on</strong> technology, ginning, fibre testing, marketing and<br />
promoti<strong>on</strong>. This would be a model forum where expertise in cott<strong>on</strong> sector can<br />
seek training and research guidelines.<br />
The <strong>Islamic</strong> Cott<strong>on</strong> Journal: We all know that <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly cott<strong>on</strong> journal that had<br />
been specialized in cott<strong>on</strong> is <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Growing Review and had not been<br />
published since 1970’s. The Cott<strong>on</strong> Growing Review was an internati<strong>on</strong>ally<br />
recognized Journal that linked all researchers. Establishing <strong>Islamic</strong> Cott<strong>on</strong> Journal<br />
will abridge <str<strong>on</strong>g>the</str<strong>on</strong>g> gap being created by <str<strong>on</strong>g>the</str<strong>on</strong>g> absence <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Growing Review.<br />
Yield Maximizati<strong>on</strong> Projects : This needs to be executed and particularly in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
lower yielding IDB African member countries. Such projects would be poverty<br />
alleviating and can also be used as pilot farms for enhancing technology transfer.<br />
Cott<strong>on</strong> Research Network (IDB): Needs to be established for complete<br />
interacti<strong>on</strong> between researchers and should have periodic c<strong>on</strong>ferences (i.e. every<br />
2or 3 years) depending <strong>on</strong> funds.<br />
Participati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> Internati<strong>on</strong>al and Regi<strong>on</strong>al Research C<strong>on</strong>ferences: Our<br />
participati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g>se c<strong>on</strong>ferences is very low. Researchers have to participate and<br />
learn from <str<strong>on</strong>g>the</str<strong>on</strong>g>se c<strong>on</strong>ferences but due to unavailability <str<strong>on</strong>g>of</str<strong>on</strong>g> funds, <strong>on</strong>ly limited<br />
chances are availed, IDB member countries can help to solve this problem.<br />
Training <str<strong>on</strong>g>of</str<strong>on</strong>g> Technical Staff in Biotechnology Ginning and Fibre Testing<br />
Instruments: This needs to be d<strong>on</strong>e as early as possible, because o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries<br />
are ahead <str<strong>on</strong>g>of</str<strong>on</strong>g> us in <str<strong>on</strong>g>the</str<strong>on</strong>g>se areas.<br />
Project Related to Producti<strong>on</strong> Research: IDB can follow <str<strong>on</strong>g>the</str<strong>on</strong>g> ICAC-CFC model<br />
targeting IDB members where producti<strong>on</strong> /ha is low and cost is high.<br />
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164
UGANDA’S COUNTRIY REPORT ON THE COTTON SECTOR<br />
I. INRODUCTION<br />
Damalie Lubwama Nabakka<br />
Cott<strong>on</strong> <strong>Development</strong> Organizati<strong>on</strong><br />
Cott<strong>on</strong> was introduced to Uganda as a cash crop in 1903 and is <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
major export commodities currently accounting for 3.6% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s<br />
foreign exchange receipts. The Sector employs over 2.5 milli<strong>on</strong> people<br />
directly and indirectly. In 1994, marketing and processing <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> were<br />
liberalized while Government retained <str<strong>on</strong>g>the</str<strong>on</strong>g> regulatory and promoti<strong>on</strong>al roles<br />
implemented by Cott<strong>on</strong> <strong>Development</strong> Organisati<strong>on</strong> (CDO).<br />
II. MAJOR CHALLENGES FACED BY UGANDA<br />
• Land fragmentati<strong>on</strong> - this has led to persistent small-scale producti<strong>on</strong><br />
characterized by use <str<strong>on</strong>g>of</str<strong>on</strong>g> rudimentary tools especially <str<strong>on</strong>g>the</str<strong>on</strong>g> hand hoe. It also<br />
makes it difficult to quantify, with a high degree <str<strong>on</strong>g>of</str<strong>on</strong>g> accuracy, area under<br />
cott<strong>on</strong> producti<strong>on</strong>.<br />
• Disseminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> technologies-inadequate and inefficient<br />
extensi<strong>on</strong> service for transfer <str<strong>on</strong>g>of</str<strong>on</strong>g> recommended producti<strong>on</strong> technologies to<br />
farmers and farmers’ problems to research (feedback).<br />
• Lack <str<strong>on</strong>g>of</str<strong>on</strong>g> organized cott<strong>on</strong> farmers’ groups, which makes service delivery<br />
difficult.<br />
• Low levels <str<strong>on</strong>g>of</str<strong>on</strong>g> agricultural mechanisati<strong>on</strong>.<br />
• High costs <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> without accessible and affordable credit for<br />
rural farmers.<br />
• Low soil fertility in some parts <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> country, especially in Eastern<br />
Uganda.<br />
• Over dependence <strong>on</strong> rain-fed cott<strong>on</strong> producti<strong>on</strong>.<br />
• Low and fluctuating farm gate prices, which result from low levels <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
local Value Additi<strong>on</strong> to lint and <str<strong>on</strong>g>the</str<strong>on</strong>g> subsequent dependence <strong>on</strong> World<br />
Market determined prices.<br />
• High cost <str<strong>on</strong>g>of</str<strong>on</strong>g> local borrowing, which leads to dependence <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Private<br />
sector i.e. Ginners <strong>on</strong> pre-financing by Internati<strong>on</strong>al Merchants. This<br />
results into fixed prices <str<strong>on</strong>g>of</str<strong>on</strong>g> lint to <str<strong>on</strong>g>the</str<strong>on</strong>g> ginners and in turn translates into<br />
reduced prices to farmers.<br />
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• Heavy subsidies <str<strong>on</strong>g>of</str<strong>on</strong>g>fered by developed countries to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir cott<strong>on</strong> sectors<br />
which make low developed countries less competitive <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
internati<strong>on</strong>al market.<br />
• Low levels <str<strong>on</strong>g>of</str<strong>on</strong>g> local Value Additi<strong>on</strong> to lint which expose Ugandan<br />
farmers to fluctuating World Market prices for lint.<br />
III. ENHANCING EFFICIENCY AND COMPETITIVENES<br />
1. Enhancing Producti<strong>on</strong> Efficiency<br />
Research and breeding: Ugandan researchers have developed superior high<br />
yielding varieties with good fibre characteristics. Improved agr<strong>on</strong>omic and<br />
technological packages for increasing producti<strong>on</strong>, productivity and quality<br />
have also been developed.<br />
Disseminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> technologies: The Ginners are supporting<br />
cott<strong>on</strong> targeted extensi<strong>on</strong> services to farmers based <strong>on</strong> dem<strong>on</strong>strati<strong>on</strong> plots<br />
(each serving 15 – 30 farmers), which are aimed at increasing productivity<br />
and improving quality.<br />
Seed for planting: The Government (CDO) toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r with <str<strong>on</strong>g>the</str<strong>on</strong>g> Ginners have<br />
installed five seed delinting and grading machines to ensure that <strong>on</strong>ly high<br />
quality seed is availed to farmers thus minimising seed wastage and making<br />
mechanised cott<strong>on</strong> planting possible.<br />
Mechanizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> land opening: Ginners are promoting use <str<strong>on</strong>g>of</str<strong>on</strong>g> animal<br />
tracti<strong>on</strong> and tractors to ensure that farmers open up <str<strong>on</strong>g>the</str<strong>on</strong>g> minimum ec<strong>on</strong>omical<br />
acreage.<br />
Introducti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> commercial farms: Block Farms managed by small<br />
individual farmers and single investors have been established in Busitema<br />
(Busia District) and Kigumba (Masindi District) respectively, to promote<br />
large-scale commercial cott<strong>on</strong> producti<strong>on</strong>. Kazinga Channel area is already<br />
practicing Block farming and <str<strong>on</strong>g>the</str<strong>on</strong>g> practice is catching <strong>on</strong> in Bunyolo and West<br />
Nile Regi<strong>on</strong>s. CDO encourages this model because it is cost effective for<br />
service delivery to small-scale farmers.<br />
Provisi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> inputs: Under <str<strong>on</strong>g>the</str<strong>on</strong>g> Ginners Producti<strong>on</strong> Support<br />
Program, Ginners are subsidizing cott<strong>on</strong> pesticides, which are a major input<br />
166
for cott<strong>on</strong> producti<strong>on</strong>. They are also promoting use <str<strong>on</strong>g>of</str<strong>on</strong>g> herbicides and<br />
fertilizers under <str<strong>on</strong>g>the</str<strong>on</strong>g> Dem<strong>on</strong>strati<strong>on</strong> plots program.<br />
Irrigati<strong>on</strong>: CDO has embarked <strong>on</strong> establishment <str<strong>on</strong>g>of</str<strong>on</strong>g> a pilot small-scale<br />
irrigati<strong>on</strong> system at Busitema to address effects <str<strong>on</strong>g>of</str<strong>on</strong>g> drought <strong>on</strong> cott<strong>on</strong><br />
producti<strong>on</strong>.<br />
Formati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers’ groups: The success <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> dem<strong>on</strong>strati<strong>on</strong> plots,<br />
which serve 15 – 30 farmers, is expected to promote formati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> much<br />
desired cott<strong>on</strong> farmers’ groups which will in turn ease extensi<strong>on</strong> service<br />
delivery, facilitate access to inputs and producti<strong>on</strong> credit, and give <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
farmers higher bargaining power.<br />
2. Enhancing Internati<strong>on</strong>al Competitiveness<br />
Lint quality - intensive research and breeding has produced cott<strong>on</strong> varieties<br />
whose lint has high values <str<strong>on</strong>g>of</str<strong>on</strong>g> fibre thickness, fineness, strength, staple length<br />
and bright white colour which makes <str<strong>on</strong>g>the</str<strong>on</strong>g>m suitable for <str<strong>on</strong>g>the</str<strong>on</strong>g> most modern<br />
spinning technology. These unique qualities have given Uganda a Niche<br />
market and <str<strong>on</strong>g>the</str<strong>on</strong>g> lint earns a premium <str<strong>on</strong>g>of</str<strong>on</strong>g> 5 – 8 US cents per pound <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Internati<strong>on</strong>al market. In additi<strong>on</strong>, CDO, working in close collaborati<strong>on</strong> with<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> ginners, have maintained <str<strong>on</strong>g>the</str<strong>on</strong>g>ir vigilance and quality observance both at<br />
farm and ginnery levels in order to eliminate lint c<strong>on</strong>taminati<strong>on</strong>. As a result,<br />
75% <str<strong>on</strong>g>of</str<strong>on</strong>g> our lint trades in <str<strong>on</strong>g>the</str<strong>on</strong>g> grades <str<strong>on</strong>g>of</str<strong>on</strong>g> Middling and above.<br />
Export markets - Uganda is <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> 35 Sub-Saharan countries eligible to<br />
export garments and textiles to <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S.A. under <str<strong>on</strong>g>the</str<strong>on</strong>g> African Growth<br />
Opportunities Act (AGOA). Uganda also has access to <str<strong>on</strong>g>the</str<strong>on</strong>g> European market<br />
under <str<strong>on</strong>g>the</str<strong>on</strong>g> ‘Everything but Arms Initiative (EBA)’.<br />
IV. ENHANCING THE ROLE OF PRIVATE SECTOR IN THE<br />
COTTON SECTOR<br />
Marketing, processing and exporting - in 1987, <str<strong>on</strong>g>the</str<strong>on</strong>g> Government <str<strong>on</strong>g>of</str<strong>on</strong>g> Uganda<br />
embraced a macro-ec<strong>on</strong>omic reform policy geared at promoting healthy and<br />
sustainable ec<strong>on</strong>omic development. Thus <str<strong>on</strong>g>the</str<strong>on</strong>g> marketing, processing (ginning)<br />
and export functi<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry were totally liberalized while<br />
Government retained <str<strong>on</strong>g>the</str<strong>on</strong>g> regulatory and promoti<strong>on</strong>al functi<strong>on</strong>s.<br />
Support to producti<strong>on</strong> related activities - in 2003, <str<strong>on</strong>g>the</str<strong>on</strong>g> Ginners’ Cott<strong>on</strong><br />
Producti<strong>on</strong> Support Strategy was initiated. The Strategy involves Ginners<br />
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supporting producti<strong>on</strong> related activities in a bid to supplement Government<br />
efforts. The activities mainly focus <strong>on</strong> training small-scale farmers <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> best<br />
cott<strong>on</strong> agr<strong>on</strong>omical practices using dem<strong>on</strong>strati<strong>on</strong> plots with a view to<br />
increasing producti<strong>on</strong>, productivity and quality. In <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>e year that <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Strategy has been implemented, lint producti<strong>on</strong> has risen from 20,350 MT in<br />
2002/03 to 29,600 MT in 2003/04 and is estimated to reach 37,000 MT in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
2004/05 seas<strong>on</strong>.<br />
Producti<strong>on</strong> inputs – importati<strong>on</strong> and/ or manufacture and distributi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
inputs has been in <str<strong>on</strong>g>the</str<strong>on</strong>g> hands <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Private Sector since <str<strong>on</strong>g>the</str<strong>on</strong>g> late ‘80s with<br />
Government m<strong>on</strong>itoring quality and standards. Ginners are working directly<br />
with input suppliers to avail inputs to farmers, sometimes at subsidized rates<br />
(pesticides).<br />
Dem<strong>on</strong>strati<strong>on</strong> plots – <str<strong>on</strong>g>the</str<strong>on</strong>g> dem<strong>on</strong>strati<strong>on</strong> plots menti<strong>on</strong>ed earlier are c<str<strong>on</strong>g>of</str<strong>on</strong>g>unded<br />
by <str<strong>on</strong>g>the</str<strong>on</strong>g> ginners and <str<strong>on</strong>g>the</str<strong>on</strong>g> USAID’s Agriculture Productivity<br />
Enhancement Program (APEP).<br />
V. PROPOSAL FOR ENHANCING CO-OPERATION AMONG IDB<br />
COTTON- PRODUCING COUNTRIES<br />
• Improving communicati<strong>on</strong> am<strong>on</strong>g IDB member countries by sharing<br />
informati<strong>on</strong> and/ or net-working and formati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> regi<strong>on</strong>al/ subregi<strong>on</strong>al<br />
cott<strong>on</strong> bodies.<br />
• Joint research and breeding. Incorporate modern biotechnology into<br />
local research and seed breeding.<br />
• Ex-change visits and study/training programs. The Ginning Training<br />
School here in Uganda could be boosted by support from o<str<strong>on</strong>g>the</str<strong>on</strong>g>r IDB<br />
countries to raise it to internati<strong>on</strong>al standards.<br />
168
COUNTRY EXPERIENCES FROM THE<br />
ASIAN REGION<br />
169
170
Preamble<br />
COTTON IN PAKISTAN: AN OVERVIEW<br />
Ibad Badar Siddiqui<br />
Vice President, Pakistan Central Cott<strong>on</strong> Committee<br />
In Pakistan, cott<strong>on</strong> crop occupies a unique positi<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al ec<strong>on</strong>omy<br />
<strong>on</strong> account <str<strong>on</strong>g>of</str<strong>on</strong>g> bulk <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> export receipts being accrued through cott<strong>on</strong> and<br />
textiles. As such, this cash crop is believed to be <str<strong>on</strong>g>the</str<strong>on</strong>g> life line <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al<br />
ec<strong>on</strong>omy. In 2003-04, <str<strong>on</strong>g>the</str<strong>on</strong>g> gross export receipts were estimated at $ 12.273<br />
billi<strong>on</strong>, <str<strong>on</strong>g>of</str<strong>on</strong>g> which cott<strong>on</strong> and textiles accounted for $ 8.137 billi<strong>on</strong> or 66.3<br />
percent. As a matter <str<strong>on</strong>g>of</str<strong>on</strong>g> fact, cott<strong>on</strong> has invariably been important for<br />
ec<strong>on</strong>omic growth and development in <str<strong>on</strong>g>the</str<strong>on</strong>g> country. In 1947-48, when Pakistan<br />
appeared <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> world map, <str<strong>on</strong>g>the</str<strong>on</strong>g> country was producing merely 1.16 milli<strong>on</strong><br />
bales <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> and <strong>on</strong>ly two textile mills were in existence. So<strong>on</strong> after<br />
independence, <str<strong>on</strong>g>the</str<strong>on</strong>g> process <str<strong>on</strong>g>of</str<strong>on</strong>g> development <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> textile industry had started<br />
and in <str<strong>on</strong>g>the</str<strong>on</strong>g> year 1948 <strong>on</strong>e more textile mill was setup. The number <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong><br />
bales and <str<strong>on</strong>g>the</str<strong>on</strong>g> textile mills thus kept <strong>on</strong> increasing in <str<strong>on</strong>g>the</str<strong>on</strong>g> following years.<br />
Over <str<strong>on</strong>g>the</str<strong>on</strong>g> years, <str<strong>on</strong>g>the</str<strong>on</strong>g>re has been visible improvement in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong><br />
and <str<strong>on</strong>g>the</str<strong>on</strong>g> country is now also producing l<strong>on</strong>g staple cott<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> 1-1/8” and even<br />
l<strong>on</strong>ger, whereas in <str<strong>on</strong>g>the</str<strong>on</strong>g> early years <str<strong>on</strong>g>the</str<strong>on</strong>g> bulk producti<strong>on</strong> was <str<strong>on</strong>g>of</str<strong>on</strong>g> 1” staple or<br />
less. The area under cott<strong>on</strong> has also increased c<strong>on</strong>siderably to over 3 milli<strong>on</strong><br />
hectares. The increase in cott<strong>on</strong> producti<strong>on</strong> has also been instrumental in<br />
expanding <str<strong>on</strong>g>the</str<strong>on</strong>g> textile industry. The progress made in cott<strong>on</strong> sector over <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
years may be enumerated as Table1.<br />
Table 1. Cott<strong>on</strong> and Textile Sector Growth in Pakistan<br />
171<br />
1947-48 2003-04<br />
Area (ml. ha) 1.23 3.00<br />
Producti<strong>on</strong> (ml. bales) 1.16 10.10<br />
Yield (kgs/ha) 160.00 572.00<br />
Ginneries 31.00 1200.00<br />
Textile Mills 2.00 458.00<br />
Mill C<strong>on</strong>sumpti<strong>on</strong> (ml. bales) 0.04 11.50<br />
Yarn Producti<strong>on</strong> (ml. kgs) 6.20 1925.00<br />
Cloth Producti<strong>on</strong> (ml. sq. mtr) 29.50 600.00<br />
An all time record cott<strong>on</strong> producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> 14.6 milli<strong>on</strong> bales achieved in 2004-<br />
05 is yet an o<str<strong>on</strong>g>the</str<strong>on</strong>g>r landmark. There is, however, still much scope for
enhancing <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> to meet <str<strong>on</strong>g>the</str<strong>on</strong>g> future needs <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> domestic<br />
textile sector as well as <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market. The government is,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>refore, determined to accelerate <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> research and development<br />
process necessarily required for a quantum jump in cott<strong>on</strong> producti<strong>on</strong> as well<br />
as <str<strong>on</strong>g>the</str<strong>on</strong>g> qualitative improvement matching <str<strong>on</strong>g>the</str<strong>on</strong>g> spinners’ requirements. At <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
same time, it also intends to facilitate all <str<strong>on</strong>g>the</str<strong>on</strong>g> stakeholders, particularly <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
growing community through a package <str<strong>on</strong>g>of</str<strong>on</strong>g> fiscal, technological,<br />
administrative and legislative measures. Pakistan is <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> largest cott<strong>on</strong><br />
producing and c<strong>on</strong>suming countries in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. Its placement in <str<strong>on</strong>g>the</str<strong>on</strong>g> global<br />
cott<strong>on</strong> scene can well be visualized from Table 2.<br />
Table 2. Pakistan’s Place in World Cott<strong>on</strong> and Textiles<br />
Percent Rank<br />
Producti<strong>on</strong> 9.5 4 th<br />
C<strong>on</strong>sumpti<strong>on</strong> 10.0 3 rd<br />
Yarn Producti<strong>on</strong> 9.0 3 rd<br />
Yarn Export 26.0 2 nd<br />
Cloth Producti<strong>on</strong> 7.0 3 rd<br />
Cloth Export 14.0 3 rd<br />
In <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>text <str<strong>on</strong>g>of</str<strong>on</strong>g> IDB member countries, 29 countries produce cott<strong>on</strong>.<br />
Am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g>se, Pakistan is <str<strong>on</strong>g>the</str<strong>on</strong>g> single largest country accounting for 32 percent<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> collective cott<strong>on</strong> acreage, 30 percent <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> and 41 percent<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> member countries’ c<strong>on</strong>sumpti<strong>on</strong>.<br />
I. COTTON PRODUCTION PATTERN<br />
In line with <str<strong>on</strong>g>the</str<strong>on</strong>g> growing demand for cott<strong>on</strong> by <str<strong>on</strong>g>the</str<strong>on</strong>g> domestic textile industry,<br />
c<strong>on</strong>certed efforts were made to enhance <str<strong>on</strong>g>the</str<strong>on</strong>g> volume <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> country through research, development and policy decisi<strong>on</strong>s. These<br />
efforts led to a record producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> 12.8 milli<strong>on</strong> bales in 1991-92. The<br />
situati<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>reafter, however, changed as cott<strong>on</strong> crop was affected by cott<strong>on</strong><br />
leaf curl virus. This placed <str<strong>on</strong>g>the</str<strong>on</strong>g> forward moving cott<strong>on</strong> producti<strong>on</strong> in reverse<br />
gear. The disease remained a mystery for a number <str<strong>on</strong>g>of</str<strong>on</strong>g> years. Eventually,<br />
scientists came up with a variety and cultural management soluti<strong>on</strong>, which<br />
saved <str<strong>on</strong>g>the</str<strong>on</strong>g> country from any drastic decline in producti<strong>on</strong>. The producti<strong>on</strong> in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> subsequent years remained 10 milli<strong>on</strong> bales <strong>on</strong> average till it bounced to<br />
14.6 milli<strong>on</strong> bales in 2004-05.<br />
Despite an improvement in <str<strong>on</strong>g>the</str<strong>on</strong>g> size <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> crop, <str<strong>on</strong>g>the</str<strong>on</strong>g> hectare yield <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong><br />
in Pakistan is, however, below <str<strong>on</strong>g>the</str<strong>on</strong>g> levels being obtained in a number <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
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countries in <str<strong>on</strong>g>the</str<strong>on</strong>g> world including some <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB member countries, such as<br />
Egypt, Central Asian member countries, Iran, Syria and Turkey. According<br />
to ICAC, <str<strong>on</strong>g>the</str<strong>on</strong>g> hectare yield in 2004-05 is estimated at 773 kgs in Pakistan as<br />
against 1,982 in Australia, 1,571 in Syria, 1,289 in Turkey, 1,119 in China,<br />
etc. The lower hectare yield in <str<strong>on</strong>g>the</str<strong>on</strong>g> country may be attributed to <str<strong>on</strong>g>the</str<strong>on</strong>g> serious<br />
threat <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> leaf curl virus in <str<strong>on</strong>g>the</str<strong>on</strong>g> absence <str<strong>on</strong>g>of</str<strong>on</strong>g> resistant varieties as well as<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> improper crop and pest management practices still being followed by a<br />
large number <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers cultivating <strong>on</strong> small and unec<strong>on</strong>omic holdings, as<br />
elaborated in Table 3.<br />
Table 3. Farm Size Structure in Pakistan<br />
Farm Size Percent <str<strong>on</strong>g>of</str<strong>on</strong>g> Percent <str<strong>on</strong>g>of</str<strong>on</strong>g> Total number <str<strong>on</strong>g>of</str<strong>on</strong>g> Farms= 5.071 milli<strong>on</strong>.<br />
(Hectares) Farms Area<br />
Total Farm Area = 19.252 Ml. ha.<br />
Under 2.0<br />
2.0 to under 5.0<br />
47<br />
34<br />
12<br />
27 Average Farm size = 3.8 ha.<br />
5.0 to under 10.0 12 22<br />
10.0 and above 7 39<br />
The research endeavors are however <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> way to evolving high yield<br />
potential varieties and c<strong>on</strong>certed efforts are also being made to propagate <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
appropriate cott<strong>on</strong> producti<strong>on</strong> and protecti<strong>on</strong> technologies particularly am<strong>on</strong>g<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> small farmers through all possible means particularly <str<strong>on</strong>g>the</str<strong>on</strong>g> electr<strong>on</strong>ic<br />
media. The cott<strong>on</strong> research program being pursued in <str<strong>on</strong>g>the</str<strong>on</strong>g> country focuses<br />
up<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> following objectives:<br />
• C<strong>on</strong>trol <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Leaf Curl Virus through breeding <str<strong>on</strong>g>of</str<strong>on</strong>g> resistant<br />
varieties and crop management.<br />
• <strong>Development</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> commercial cott<strong>on</strong> hybrids.<br />
• <strong>Development</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Bt cott<strong>on</strong>.<br />
• <strong>Development</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Heat, Insect, Salinity and Drought resistant/tolerant<br />
and early maturing varieties with higher Ginning out turn.<br />
• Evoluti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> l<strong>on</strong>g and extra l<strong>on</strong>g staple cott<strong>on</strong> varieties.<br />
• Focus <strong>on</strong> Integrated Pest Management.<br />
Agricultural credit is c<strong>on</strong>sidered as an important instrument for achieving<br />
producti<strong>on</strong> target and promoti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> agriculture sector by enabling <str<strong>on</strong>g>the</str<strong>on</strong>g> farmers<br />
to arrange an appropriate mix <str<strong>on</strong>g>of</str<strong>on</strong>g> essential inputs for obtaining higher yield.<br />
The government policy with regard to agricultural credit is thus to safeguard<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> interest <str<strong>on</strong>g>of</str<strong>on</strong>g> small farmers by extending credit to <str<strong>on</strong>g>the</str<strong>on</strong>g>m <strong>on</strong> easy terms and to<br />
recover <str<strong>on</strong>g>the</str<strong>on</strong>g> same in time as well as to protect <str<strong>on</strong>g>the</str<strong>on</strong>g>m in case <str<strong>on</strong>g>of</str<strong>on</strong>g> any natural<br />
hazards and calamity. Credit requirements <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> farming community have<br />
173
shown an increasing trend over <str<strong>on</strong>g>the</str<strong>on</strong>g> years. Therefore, <str<strong>on</strong>g>the</str<strong>on</strong>g> government had<br />
increased agricultural credit allocati<strong>on</strong> for <str<strong>on</strong>g>the</str<strong>on</strong>g> year 2004-05 to Rs.85 billi<strong>on</strong><br />
from Rs.65.5 billi<strong>on</strong> set for 2003-04. This showed an increase <str<strong>on</strong>g>of</str<strong>on</strong>g> 29.7%.<br />
Thus, <str<strong>on</strong>g>the</str<strong>on</strong>g> existing credit policy promises adequate availability <str<strong>on</strong>g>of</str<strong>on</strong>g> farm credit<br />
to <str<strong>on</strong>g>the</str<strong>on</strong>g> growing community.<br />
II. COTTON CONSUMPTION PATTERN<br />
There has been a phenomenal growth in <str<strong>on</strong>g>the</str<strong>on</strong>g> mill c<strong>on</strong>sumpti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> over<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> years, which is attributable to both <str<strong>on</strong>g>the</str<strong>on</strong>g> setting up <str<strong>on</strong>g>of</str<strong>on</strong>g> new mills and <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
improved capacity, as shown in Table 4.<br />
Table 4. Installed and Working Textile Capacity (as in January 2005)<br />
Installed Working<br />
Number <str<strong>on</strong>g>of</str<strong>on</strong>g> Textile Mills 458<br />
427<br />
Spindles 9,815,574 8,531,021<br />
Rotors 151,560 75,151<br />
Looms 9,032 4,498<br />
Source: Textile Commissi<strong>on</strong>er’s Organizati<strong>on</strong>.<br />
The number <str<strong>on</strong>g>of</str<strong>on</strong>g> textile mills in <str<strong>on</strong>g>the</str<strong>on</strong>g> country increased from 131 in 1971-72 to<br />
210 in 1981-82, to 307 in 1991-92 and to 445 in 2001-02, which has fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
increased to 458 in 2004-05. Accordingly, <str<strong>on</strong>g>the</str<strong>on</strong>g> raw cott<strong>on</strong> requirements <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> textile industry have increased manifold over <str<strong>on</strong>g>the</str<strong>on</strong>g> years. According to an<br />
estimati<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> present level <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> c<strong>on</strong>sumpti<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> country is in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
range <str<strong>on</strong>g>of</str<strong>on</strong>g> 13-14 milli<strong>on</strong> bales annually.<br />
III. COTTON QUALITY IMPROVEMENT<br />
Pakistan cott<strong>on</strong> is inherently <str<strong>on</strong>g>of</str<strong>on</strong>g> good quality. However, improper handling,<br />
poor ginning practices, absence <str<strong>on</strong>g>of</str<strong>on</strong>g> quality c<strong>on</strong>trol measures and high degree<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>taminati<strong>on</strong> as well as n<strong>on</strong>-existence <str<strong>on</strong>g>of</str<strong>on</strong>g> a marketing mechanism based<br />
<strong>on</strong> premia and discounts lead to depreciati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> value <str<strong>on</strong>g>of</str<strong>on</strong>g> raw cott<strong>on</strong> and<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> textile products. Being cognizant <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>se problems, <str<strong>on</strong>g>the</str<strong>on</strong>g> government had<br />
launched a project in mid-eighties for improvement in cott<strong>on</strong> quality through<br />
standardizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> to bring it at par with <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al standards.<br />
The purpose <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> project was to improve <str<strong>on</strong>g>the</str<strong>on</strong>g> competitiveness <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan’s<br />
raw cott<strong>on</strong> and to ensure better returns to cott<strong>on</strong> growers, ginners, spinners,<br />
exporters and to increase foreign exchange earnings for <str<strong>on</strong>g>the</str<strong>on</strong>g> country. After<br />
completi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> project in December 1994, an instituti<strong>on</strong>, Pakistan Cott<strong>on</strong><br />
174
Standards Institute was established. In order to ensure qualitative<br />
improvement in cott<strong>on</strong> producti<strong>on</strong> and marketing, <str<strong>on</strong>g>the</str<strong>on</strong>g> government has thus<br />
undertaken <str<strong>on</strong>g>the</str<strong>on</strong>g> following measures :<br />
• Cott<strong>on</strong> Standardizati<strong>on</strong> Ordinance, 2002 has been promulgated.<br />
• Cott<strong>on</strong> Standards Institute has been established.<br />
• Nati<strong>on</strong>al Cott<strong>on</strong> Grades have been developed and approved.<br />
• Interventi<strong>on</strong> price <str<strong>on</strong>g>of</str<strong>on</strong>g> seed cott<strong>on</strong> being fixed <strong>on</strong> grade basis.<br />
• Karachi Cott<strong>on</strong> Associati<strong>on</strong> has now been issuing spot rates <strong>on</strong> grade<br />
and staple basis.<br />
• C<strong>on</strong>taminati<strong>on</strong> free cott<strong>on</strong> producti<strong>on</strong> programs were launched with<br />
visible success.<br />
• HVI equipped fibre testing labs in major cott<strong>on</strong> growing districts are<br />
being set up.<br />
• Provincial Governments have amended <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> C<strong>on</strong>trol Act to<br />
eliminate c<strong>on</strong>taminati<strong>on</strong> problem.<br />
With <str<strong>on</strong>g>the</str<strong>on</strong>g> above measures taken by <str<strong>on</strong>g>the</str<strong>on</strong>g> government, <str<strong>on</strong>g>the</str<strong>on</strong>g> benefits <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong><br />
standardizati<strong>on</strong> and grading system in <str<strong>on</strong>g>the</str<strong>on</strong>g> form <str<strong>on</strong>g>of</str<strong>on</strong>g> better grades and<br />
c<strong>on</strong>taminati<strong>on</strong> free cott<strong>on</strong> at <str<strong>on</strong>g>the</str<strong>on</strong>g> grass root level are expected so<strong>on</strong> in view <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> general realizati<strong>on</strong> am<strong>on</strong>g all <str<strong>on</strong>g>the</str<strong>on</strong>g> stakeholders that under <str<strong>on</strong>g>the</str<strong>on</strong>g> post quota<br />
regime <str<strong>on</strong>g>the</str<strong>on</strong>g> quality would rule <str<strong>on</strong>g>the</str<strong>on</strong>g> market. The possible ec<strong>on</strong>omic gains<br />
through quality c<strong>on</strong>trol may be expected in Table 5.<br />
Table 5. Estimated Ec<strong>on</strong>omic Gains<br />
Volume-wise<br />
One bale <str<strong>on</strong>g>of</str<strong>on</strong>g> raw cott<strong>on</strong> (Kgs) 170<br />
Yarn recovery at <str<strong>on</strong>g>the</str<strong>on</strong>g> present rte <str<strong>on</strong>g>of</str<strong>on</strong>g> 84% (Kgs) 143<br />
Yarn recovery at improved rate <str<strong>on</strong>g>of</str<strong>on</strong>g> 92% (Kgs) 156<br />
Improvement (Kgs) 13<br />
Value-wise<br />
143 kgs <str<strong>on</strong>g>of</str<strong>on</strong>g> yarn @ $1.82* / kg quoted for Pakistan 20’s ($) 260.30<br />
156 kgs <str<strong>on</strong>g>of</str<strong>on</strong>g> yarn @ $ 2.15* / kg quoted for Turkey 20’s ($) 335.40<br />
Improvement ($)75.10<br />
Additi<strong>on</strong>al income through <strong>on</strong>e milli<strong>on</strong> bales <str<strong>on</strong>g>of</str<strong>on</strong>g> raw cott<strong>on</strong> equivalent<br />
yarn = $ 75 milli<strong>on</strong> or Rs. 4.50 billi<strong>on</strong>.<br />
* Yarn export prices as quoted in Cott<strong>on</strong> Outlook, Volume 83, February 25, 2005.<br />
175
IV. COTTON POLICY AT A GLANCE<br />
The cott<strong>on</strong> policy being pursued in <str<strong>on</strong>g>the</str<strong>on</strong>g> country envisages all <str<strong>on</strong>g>the</str<strong>on</strong>g> possible<br />
measures to sustain <str<strong>on</strong>g>the</str<strong>on</strong>g> recent significant growth realized in producti<strong>on</strong> and<br />
to fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r increase cott<strong>on</strong> producti<strong>on</strong> to meet <str<strong>on</strong>g>the</str<strong>on</strong>g> growing needs <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
domestic textile industry and to make it competitive under <str<strong>on</strong>g>the</str<strong>on</strong>g> post quota<br />
regime. The government is, <str<strong>on</strong>g>the</str<strong>on</strong>g>refore, also determined to bring about<br />
qualitative improvement in cott<strong>on</strong> producti<strong>on</strong> matching <str<strong>on</strong>g>the</str<strong>on</strong>g> spinners’<br />
requirements. At <str<strong>on</strong>g>the</str<strong>on</strong>g> same time, <str<strong>on</strong>g>the</str<strong>on</strong>g> government also intends to facilitate all<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> stakeholders and safeguard <str<strong>on</strong>g>the</str<strong>on</strong>g>ir interests. The cott<strong>on</strong> policy thus encircles<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> following main features :<br />
• Vertical expansi<strong>on</strong> in cott<strong>on</strong> producti<strong>on</strong>.<br />
• Cott<strong>on</strong> research focusing high yield potential and l<strong>on</strong>g staple cott<strong>on</strong><br />
varieties with virus resistance.<br />
• Encourage cott<strong>on</strong> cultivati<strong>on</strong> in new potential areas.<br />
• Fixing interventi<strong>on</strong> price for seed cott<strong>on</strong> to safeguard growers’ interest.<br />
• Government interventi<strong>on</strong> for price stabilizati<strong>on</strong> through procurement<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> lint cott<strong>on</strong> if <str<strong>on</strong>g>the</str<strong>on</strong>g> market price <str<strong>on</strong>g>of</str<strong>on</strong>g> seed cott<strong>on</strong> falls below <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
interventi<strong>on</strong> price.<br />
• Qualitative improvement in cott<strong>on</strong> through standardizati<strong>on</strong> and grading<br />
at grass root level, also by involving <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector.<br />
• Promoting cott<strong>on</strong> pricing and marketing system based <strong>on</strong> grade and<br />
staple.<br />
• Campaign for producing c<strong>on</strong>taminati<strong>on</strong> free cott<strong>on</strong>.<br />
• Free trade in cott<strong>on</strong> in order to provide a level playing field to all <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
stakeholders.<br />
V. TAIL PIECE<br />
In <str<strong>on</strong>g>the</str<strong>on</strong>g> global perspective, Pakistan is a very important country for cott<strong>on</strong> and<br />
textile producti<strong>on</strong> and has <str<strong>on</strong>g>the</str<strong>on</strong>g> potential <str<strong>on</strong>g>of</str<strong>on</strong>g> becoming a key-force in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
worldwide cott<strong>on</strong> and textile market place. There is also growing realizati<strong>on</strong><br />
in <str<strong>on</strong>g>the</str<strong>on</strong>g> country that future gains in cott<strong>on</strong> producti<strong>on</strong> would be possible more<br />
through qualitative improvement in raw cott<strong>on</strong>.<br />
The country has made noticeable progress in cott<strong>on</strong> producti<strong>on</strong> over <str<strong>on</strong>g>the</str<strong>on</strong>g> years<br />
and reached a record level <str<strong>on</strong>g>of</str<strong>on</strong>g> 14.6 milli<strong>on</strong> bales in 2004-05. A still higher<br />
producti<strong>on</strong> in years to come seems much more possible in view <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> latent<br />
yield potential <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> existing cott<strong>on</strong> varieties, growing awareness am<strong>on</strong>g<br />
176
farmers regarding scientific crop producti<strong>on</strong> and protecti<strong>on</strong> measures, a well<br />
thought research program and <str<strong>on</strong>g>the</str<strong>on</strong>g> suitable government policies.<br />
The country has also made significant growth in <str<strong>on</strong>g>the</str<strong>on</strong>g> textile sector and<br />
emerged as <str<strong>on</strong>g>the</str<strong>on</strong>g> third largest cott<strong>on</strong> c<strong>on</strong>suming country in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. There is<br />
also growing emphasis <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> export <str<strong>on</strong>g>of</str<strong>on</strong>g> more value added textile products<br />
instead <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>fining to <str<strong>on</strong>g>the</str<strong>on</strong>g> export <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> yarn and cloth.<br />
Pakistan’s experiences in cott<strong>on</strong> research, quality c<strong>on</strong>trol and <str<strong>on</strong>g>the</str<strong>on</strong>g> textile<br />
development may be shared with <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r IDB member countries and<br />
similarly Pakistan can learn from <str<strong>on</strong>g>the</str<strong>on</strong>g>ir experiences particularly in identifying<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> germ plasm having virus resistance and biological c<strong>on</strong>trol <str<strong>on</strong>g>of</str<strong>on</strong>g> insect pests,<br />
etc.<br />
177
178
COUNTRY REPORT: SYRIA<br />
Mohamed Nayef Alsalti<br />
Director, Cott<strong>on</strong> Research Administrati<strong>on</strong>, Aleppo, Syria<br />
I. INTRODUCTION<br />
179<br />
(Original in Arabic)<br />
Cott<strong>on</strong> is a major agro-industry in Syria. Syrian cott<strong>on</strong> is <str<strong>on</strong>g>of</str<strong>on</strong>g> medium staple<br />
bel<strong>on</strong>ging to <str<strong>on</strong>g>the</str<strong>on</strong>g> Gossypium hirsutum or Upland cott<strong>on</strong> species. It occupies<br />
about 16.5 % <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> irrigated area. Almost 20% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omically active<br />
populati<strong>on</strong> in Syria are dependent for all or part <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir income <strong>on</strong> cott<strong>on</strong><br />
producti<strong>on</strong> or processing. 40- 50 <str<strong>on</strong>g>of</str<strong>on</strong>g> raw cott<strong>on</strong> is exported and c<strong>on</strong>stitutes 10<br />
% <str<strong>on</strong>g>of</str<strong>on</strong>g> total Syrian exports. Cott<strong>on</strong> is an important cash crop in Syria after oil<br />
and grains. Cott<strong>on</strong> cultivati<strong>on</strong> in Syria is planted and managed by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Ministry <str<strong>on</strong>g>of</str<strong>on</strong>g> Agriculture and Agrarian Reform, through a unit specialised in<br />
cott<strong>on</strong> agriculture issues, i.e <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Research Administrati<strong>on</strong> (Cott<strong>on</strong><br />
Bureau) under <str<strong>on</strong>g>the</str<strong>on</strong>g> General Commissi<strong>on</strong> for Scientific and Agricultural<br />
Research (GCSAR). Cott<strong>on</strong> producti<strong>on</strong> in Syria is in three regi<strong>on</strong>s: <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Central north <str<strong>on</strong>g>of</str<strong>on</strong>g> Syria which covers Aleppo, Idleb and Hama province, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
eastern part <str<strong>on</strong>g>of</str<strong>on</strong>g> Syria, Rakka and Deir Ezzore, <str<strong>on</strong>g>the</str<strong>on</strong>g> north eastern part covers El-<br />
Hassaka province.<br />
II. COTTON PRODUCTION POLICY<br />
• Cott<strong>on</strong> growers must attain a license from <str<strong>on</strong>g>the</str<strong>on</strong>g> ministry <str<strong>on</strong>g>of</str<strong>on</strong>g> agriculture<br />
and agrarian reform to grow cott<strong>on</strong>.<br />
• A staple price for seed cott<strong>on</strong> is guaranteed throughout <str<strong>on</strong>g>the</str<strong>on</strong>g> whole<br />
seas<strong>on</strong>. The price is announced for <str<strong>on</strong>g>the</str<strong>on</strong>g> basic quality grade before<br />
preparing <str<strong>on</strong>g>the</str<strong>on</strong>g> land for cott<strong>on</strong> growing, and all cott<strong>on</strong> seed must be sold<br />
to <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> marketing organizati<strong>on</strong>. The cott<strong>on</strong> seed buying price per<br />
<strong>on</strong>e kilogram <str<strong>on</strong>g>of</str<strong>on</strong>g> basic quality for 2003 / 2004 seas<strong>on</strong> was 30.75 Syrian<br />
pounds.<br />
• The last date for planting cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong> is about mid May.<br />
• Limits <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> area for every extensi<strong>on</strong> unit which is resp<strong>on</strong>sible for pest<br />
c<strong>on</strong>trol, advice c<strong>on</strong>cerning good growing methods, and estimating yield<br />
for every field.<br />
• Granting better loan facilities to cott<strong>on</strong> growers by <str<strong>on</strong>g>the</str<strong>on</strong>g> agricultural co-<br />
operative bank <str<strong>on</strong>g>of</str<strong>on</strong>g> Syria, <str<strong>on</strong>g>the</str<strong>on</strong>g> loans are both cash and material for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
purchase <str<strong>on</strong>g>of</str<strong>on</strong>g> seeds, fertilizers, pesticides and sacks.
Overall coordinati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> sector is secured by means <str<strong>on</strong>g>of</str<strong>on</strong>g> an annual “Cott<strong>on</strong><br />
C<strong>on</strong>gress” which is attended by 100 to 120 senior <str<strong>on</strong>g>of</str<strong>on</strong>g>ficials, as well as <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
minister <str<strong>on</strong>g>of</str<strong>on</strong>g> agriculture and agraian reform. The c<strong>on</strong>gress reviews <str<strong>on</strong>g>the</str<strong>on</strong>g> results<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> past cott<strong>on</strong> seas<strong>on</strong>, including research findings. It is also resp<strong>on</strong>sible<br />
for formulating <str<strong>on</strong>g>the</str<strong>on</strong>g> policy directi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry. The Cott<strong>on</strong> Research<br />
Administrati<strong>on</strong> produces a bulletin c<strong>on</strong>taining recommendati<strong>on</strong>s for <str<strong>on</strong>g>the</str<strong>on</strong>g> next<br />
seas<strong>on</strong>. The bureau also produces leaflets distributed to farmers and uses<br />
nati<strong>on</strong>al televisi<strong>on</strong> and video- tapes in its campaign.<br />
III. COTTON PRODUCTION, AREA AND YIELD<br />
The area for cott<strong>on</strong> growing and lint cott<strong>on</strong> producti<strong>on</strong> in 1988/1989 was 17<br />
000 hectare and 114 000 t<strong>on</strong>s with yield <str<strong>on</strong>g>of</str<strong>on</strong>g> lint cott<strong>on</strong> 667 Kg. per hectare<br />
compared to 1415 Kg. per hectare in 2004-2005. Table 1. Show cott<strong>on</strong> area,<br />
yield and producti<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> last fifteen years 1988/ 1989-2004/2005.<br />
Table 1. Yield and Producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> in Syria, 1988/ 1989 - 2004/2005<br />
Seas<strong>on</strong><br />
Area<br />
( hectare)<br />
Yield <str<strong>on</strong>g>of</str<strong>on</strong>g> lint cott<strong>on</strong> Producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> lint cott<strong>on</strong><br />
( Kg/ ha)<br />
( t<strong>on</strong>s)<br />
1988/89 171026 667 114072<br />
1989/90 158050 811 128237<br />
1990/91 156350 927 145000<br />
1991/92 174000 1086 189000<br />
1992/93 200000 1085 230000<br />
1993/94 195000 1080 212000<br />
1994/95 190000 1080 205000<br />
1995/96 204000 1027 209000<br />
1996/97 219000 1214 266000<br />
1997/98 249000 1335 331000<br />
1998/99 275000 1215 334000<br />
1999/00 250000 1225 306000<br />
2000/01 237000 1260 247000<br />
2001/02 257063 1246 320329<br />
2002/03 199773 1174 234577<br />
2003/04 216000 1364 277000<br />
2004/05 234183 1415 331397<br />
180
IV. CULTURAL PRACTICES<br />
1. Land Preparati<strong>on</strong><br />
Soils in Central- Nor<str<strong>on</strong>g>the</str<strong>on</strong>g>rn, and North – Eastern regi<strong>on</strong>s (Aleppo, Hama and<br />
El-Hassaka provinces) are <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> gromosol type; a dark red, brown dark<br />
brown to black m<strong>on</strong>tmorill<strong>on</strong>ite clay, while in <str<strong>on</strong>g>the</str<strong>on</strong>g> Eastern regi<strong>on</strong>s ( Rakka<br />
and Deir Ezzore province) are <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> alluvial grey sandy loam to clay soils. In<br />
Aleppo and Hama areas, cott<strong>on</strong> is grown by <str<strong>on</strong>g>the</str<strong>on</strong>g> majority in fields <str<strong>on</strong>g>of</str<strong>on</strong>g> 2-5 ha.<br />
In two years rotati<strong>on</strong> with wheat, sugar beets, potatoes, legumes and<br />
vegetables, creating a very diverse ecosystem. While in <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r province,<br />
cott<strong>on</strong> is grown in fields <str<strong>on</strong>g>of</str<strong>on</strong>g> 10 to 25 ha. in two years rotati<strong>on</strong> with wheat.<br />
Typically wheat is harvested in June; land is plowed two times in opposite<br />
directi<strong>on</strong>s and left exposed to <str<strong>on</strong>g>the</str<strong>on</strong>g> air and sun. <str<strong>on</strong>g>the</str<strong>on</strong>g> third plowing takes place in<br />
February or March <str<strong>on</strong>g>the</str<strong>on</strong>g> following, <str<strong>on</strong>g>the</str<strong>on</strong>g> surface is <str<strong>on</strong>g>the</str<strong>on</strong>g>n smoo<str<strong>on</strong>g>the</str<strong>on</strong>g>d and leveled.<br />
Planting is carried out mainly by hand. Single and multiple row planters are<br />
also used. Planting takes place from <str<strong>on</strong>g>the</str<strong>on</strong>g> first <str<strong>on</strong>g>of</str<strong>on</strong>g>- April till mid May. The<br />
recommended planting method is to space rows 65-75 cm apart, with 18- 25<br />
Cm. between plant holes, which should c<strong>on</strong>tain 4 to10 seeds at a rate <str<strong>on</strong>g>of</str<strong>on</strong>g> 70 to<br />
80 kg. per ha.seeds per ha. Weed c<strong>on</strong>trol takes place through pre- emergence<br />
herbicides, and manual labour.<br />
2. Details <str<strong>on</strong>g>of</str<strong>on</strong>g> Research Instituti<strong>on</strong><br />
Cott<strong>on</strong> Research Administrati<strong>on</strong> which previously was named Cott<strong>on</strong> Bureau<br />
is under <str<strong>on</strong>g>the</str<strong>on</strong>g> General commissi<strong>on</strong> for Scientific Agricultural Research<br />
(GCSAR). Cott<strong>on</strong> Research Administrati<strong>on</strong> includes <str<strong>on</strong>g>the</str<strong>on</strong>g> following research<br />
departments:<br />
• Agriculture department<br />
• The breeding department<br />
• Cott<strong>on</strong> protecti<strong>on</strong> department<br />
• Observati<strong>on</strong> department<br />
• Mechanizati<strong>on</strong> department<br />
3. Cott<strong>on</strong> Research Administrati<strong>on</strong> Includes <str<strong>on</strong>g>the</str<strong>on</strong>g> Following Laboratories<br />
• The Staple laboratory<br />
• Biological C<strong>on</strong>trol Laboratory in Aleppo and Deir Ezzore.<br />
181
Cott<strong>on</strong> Research Administrati<strong>on</strong> includes seven field Research Stati<strong>on</strong>s in:<br />
Aleppo(2), Rakka, Deir Ezzore,Homs and El-Hassaka(2). The Research<br />
Efforts are directed to:<br />
• Resisting <str<strong>on</strong>g>the</str<strong>on</strong>g> species to Wilt disease<br />
• Resisting <str<strong>on</strong>g>the</str<strong>on</strong>g> species <str<strong>on</strong>g>the</str<strong>on</strong>g> high temperature (tolerant to heat)<br />
• Increasing <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong><br />
• Good technological specifics<br />
• Integrated Cott<strong>on</strong> Pest Management (Biological c<strong>on</strong>trol).<br />
V. CROPPING SYSTEM AND AGRONOMIC MANAGEMENT<br />
1. Irrigati<strong>on</strong><br />
Water for irrigati<strong>on</strong> is obtained from wells, rivers and lakes. Water is led<br />
mainly through ear<str<strong>on</strong>g>the</str<strong>on</strong>g>n ditches to <str<strong>on</strong>g>the</str<strong>on</strong>g> fields. Three irrigati<strong>on</strong> methods are<br />
used in cott<strong>on</strong> agriculture: Flood, furrows and drip. They represent different<br />
irrigati<strong>on</strong> techniques with different water c<strong>on</strong>sumpti<strong>on</strong> rates. All three<br />
methods are used in Syria. The most comm<strong>on</strong> is <str<strong>on</strong>g>the</str<strong>on</strong>g> flood method. During <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
growing seas<strong>on</strong> (April- September) cott<strong>on</strong> fields take about 8 to 10 irritati<strong>on</strong>s,<br />
with an average water c<strong>on</strong>sumpti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> about 14 000 cubic meters per hectare.<br />
2. Fertilizati<strong>on</strong><br />
Fertilizer recommendati<strong>on</strong>s for cott<strong>on</strong> are formulated by <str<strong>on</strong>g>the</str<strong>on</strong>g> latest normal rate<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> recommendati<strong>on</strong>, which is <str<strong>on</strong>g>the</str<strong>on</strong>g> actual amount from <str<strong>on</strong>g>the</str<strong>on</strong>g> Directorate <str<strong>on</strong>g>of</str<strong>on</strong>g> Soil<br />
in cooperati<strong>on</strong> with <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Bureau. Quantities applied by farmers range<br />
between 150- 190 Kg and 75-95 kg <str<strong>on</strong>g>of</str<strong>on</strong>g> P2O5 per ha. The recommended time<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> applicati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> nitrogen is 1/3 at sowing date and 2/3 at first flower<br />
appearance. The recommendati<strong>on</strong> is meant to discourage early excessive<br />
growth and to give <str<strong>on</strong>g>the</str<strong>on</strong>g> bulk <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> nutrient at <str<strong>on</strong>g>the</str<strong>on</strong>g> beginning <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
reproductive phase when <str<strong>on</strong>g>the</str<strong>on</strong>g> nutriti<strong>on</strong>al demand <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> crops is high.<br />
Phosphor is added at sowing date. Applicati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Fertilizers is carried out by<br />
hand or by tractor mounted equipment. Fertilizers are obtained from <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Agricultural Cooperative Bank and that is why <str<strong>on</strong>g>the</str<strong>on</strong>g> actual amount applied by<br />
farmers coincides with that <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> recommended rate.<br />
3. Crop Management<br />
The annual cott<strong>on</strong> acreage according to regi<strong>on</strong>s is declared by <str<strong>on</strong>g>the</str<strong>on</strong>g> High<br />
Council <str<strong>on</strong>g>of</str<strong>on</strong>g> Agriculture at least four m<strong>on</strong>ths before <str<strong>on</strong>g>the</str<strong>on</strong>g> commencement <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
182
cott<strong>on</strong> planting in April. The Departments <str<strong>on</strong>g>of</str<strong>on</strong>g> Agriculture in <str<strong>on</strong>g>the</str<strong>on</strong>g> various<br />
regi<strong>on</strong>s are resp<strong>on</strong>sible through <str<strong>on</strong>g>the</str<strong>on</strong>g> extensi<strong>on</strong> units to distribute <str<strong>on</strong>g>the</str<strong>on</strong>g> acreage<br />
<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> farm levels. Cott<strong>on</strong> growers obtain <str<strong>on</strong>g>the</str<strong>on</strong>g>ir licenses to grow cott<strong>on</strong> from<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> Department <str<strong>on</strong>g>of</str<strong>on</strong>g> Agriculture or its branches in <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong>s. By <str<strong>on</strong>g>the</str<strong>on</strong>g>se<br />
licenses, cott<strong>on</strong> growers are granted loans by <str<strong>on</strong>g>the</str<strong>on</strong>g> Agricultural Cooperative<br />
Bank. The loans comprise cash and material loans for <str<strong>on</strong>g>the</str<strong>on</strong>g> purchase <str<strong>on</strong>g>of</str<strong>on</strong>g> seeds,<br />
fertilizer, pesticides, and sacks.<br />
During <str<strong>on</strong>g>the</str<strong>on</strong>g> growing seas<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> extensi<strong>on</strong> units are resp<strong>on</strong>sible for advising<br />
farmers about <str<strong>on</strong>g>the</str<strong>on</strong>g> best agricultural practices. Scounting for pest infestati<strong>on</strong>s,<br />
and reporting weekly <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> situati<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir Department <str<strong>on</strong>g>of</str<strong>on</strong>g> Agriculture.<br />
The Cott<strong>on</strong> Research Administrati<strong>on</strong> (C.R.A.) is under <str<strong>on</strong>g>the</str<strong>on</strong>g> General<br />
Commissi<strong>on</strong> for Scientific Agricultural Research (G C S A R) which is<br />
resp<strong>on</strong>sible for <str<strong>on</strong>g>the</str<strong>on</strong>g> supervisi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> growing, c<strong>on</strong>trolling cott<strong>on</strong> exports,<br />
and c<strong>on</strong>ducting research. The C.R.A. is not directly represented in <str<strong>on</strong>g>the</str<strong>on</strong>g> rural<br />
areas, but is resp<strong>on</strong>sible for <str<strong>on</strong>g>the</str<strong>on</strong>g> technical supervisi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> fully staffed "Cott<strong>on</strong><br />
Branches” in each provincial Directorate <str<strong>on</strong>g>of</str<strong>on</strong>g> Agriculture. The former works in<br />
close associati<strong>on</strong> with <str<strong>on</strong>g>the</str<strong>on</strong>g> extensi<strong>on</strong> units. In additi<strong>on</strong> to regular c<strong>on</strong>tact with<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> branches, <str<strong>on</strong>g>the</str<strong>on</strong>g> (C.R.A.) has a system <str<strong>on</strong>g>of</str<strong>on</strong>g> “ Central committees” <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
senior staff who spend tow weeks per m<strong>on</strong>th during <str<strong>on</strong>g>the</str<strong>on</strong>g> seas<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> main<br />
cott<strong>on</strong> areas.<br />
Harvesting is carried out from <str<strong>on</strong>g>the</str<strong>on</strong>g> end <str<strong>on</strong>g>of</str<strong>on</strong>g> September till mid November,<br />
mainly by hand. The Cott<strong>on</strong> Marketing Organizati<strong>on</strong> is <str<strong>on</strong>g>the</str<strong>on</strong>g> sole body<br />
authorized to purchase cott<strong>on</strong> seed directly from producers. It deals with local<br />
prices structure and supply method, warehousing cott<strong>on</strong> seed and paying its<br />
value to growers.<br />
Pest problems: Comm<strong>on</strong> Pests in <str<strong>on</strong>g>the</str<strong>on</strong>g> Country:<br />
i. Insects: The main insects arranged according to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir importance are:<br />
Earias insulana: <str<strong>on</strong>g>the</str<strong>on</strong>g> spiny bollworm appeared to be <str<strong>on</strong>g>the</str<strong>on</strong>g> most comm<strong>on</strong> pest<br />
species in Syria cott<strong>on</strong>, and was found to be most numerous in <str<strong>on</strong>g>the</str<strong>on</strong>g> Deir<br />
Ezzore regi<strong>on</strong> .<br />
Helicoverpa armigera: <str<strong>on</strong>g>the</str<strong>on</strong>g> European bollworm can be c<strong>on</strong>sidered <str<strong>on</strong>g>the</str<strong>on</strong>g> 2 nd<br />
most comm<strong>on</strong> pest. It was found to be present in all cott<strong>on</strong> growing areas in<br />
Syria. The species can reach ec<strong>on</strong>omic level in Hama, Deir Ezzore, Rakka,<br />
and Aleppo regi<strong>on</strong>s.<br />
Aphids, Trips,. Jassids, and Mites: These insects were observed in all<br />
regi<strong>on</strong>s but occasi<strong>on</strong>ally reached pest status. Aphids sp. and trips were<br />
mainly encountered <strong>on</strong> seedling after which populati<strong>on</strong>s dwindled.<br />
183
Populati<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> thrips may in some years reach high levels, and serious<br />
damage may be inflicted. Red spider mites, Tetranychus sp., were found to<br />
be present in all cott<strong>on</strong> growing areas. The species can reach ec<strong>on</strong>omic<br />
level in Hama; Rakka and El-Hassaka regi<strong>on</strong>s.<br />
Agrotis ipsil<strong>on</strong>: Larvae was observed to cause damage to seedling in<br />
Hama, Rakka, and Deir Ezzore .However, in general <str<strong>on</strong>g>the</str<strong>on</strong>g> species was not<br />
found to be a pest <str<strong>on</strong>g>of</str<strong>on</strong>g> significance, while moreover, high seed rates amply<br />
compensated for seedling losses.<br />
Cre<strong>on</strong>tiades pallidus: The shedder bug is ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r comm<strong>on</strong> pest in Syrian<br />
cott<strong>on</strong> . It can be observed in Hama, Aleppo, and Rakka regi<strong>on</strong>s , while in<br />
Deir Ezzore regi<strong>on</strong> it can be c<strong>on</strong>sidered <str<strong>on</strong>g>the</str<strong>on</strong>g> 2 nd most comm<strong>on</strong> pest after<br />
Earias insulana.<br />
Spodotera exygua: The green worm is not a comm<strong>on</strong> pest in Syrian cott<strong>on</strong>.<br />
Occasi<strong>on</strong>ally <str<strong>on</strong>g>the</str<strong>on</strong>g> species can reach ec<strong>on</strong>omic level in Hassaka, and Hama,<br />
regi<strong>on</strong>s.<br />
Bemisia tabaci: The whitefly is not a serious pest in Syrian cott<strong>on</strong>.<br />
However, it has <str<strong>on</strong>g>the</str<strong>on</strong>g> potential to reach major pest status. The species was<br />
found to be present in all cott<strong>on</strong> growing regi<strong>on</strong>s; however, populati<strong>on</strong>s<br />
were heavily parasitized by Aphilinids.<br />
Recently, no pest introducti<strong>on</strong>s has taken place into <str<strong>on</strong>g>the</str<strong>on</strong>g> country.<br />
Table 2. Areas C<strong>on</strong>trolled by Chemicals Against Different Pests in<br />
Cott<strong>on</strong> Fields(ha)<br />
Seas<strong>on</strong> Pest 1987 1995-96 1997-98 1999-00 2001-02 2003 2004<br />
Green worm 1573 858 1344 0 2 0 193<br />
Bollworms 11224 2985 799.5 995.5 62.5 200 306<br />
Sucking<br />
insects<br />
4970 3265 500.5 258.5 15 0 0<br />
Mites 2743 42.5 0 339 23.5 8.5 0<br />
Cutworm 3776 243 1314 1436.5 976 541 528.8<br />
O<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
insects<br />
6 55.5 100 35 97 39 69.1<br />
Total 24292 7339 4058 3064.5 1176 788.5 1096.9<br />
Planted 128687 211919.5 26259.5 254429 228418 205107 234183<br />
areas<br />
C<strong>on</strong>trolled<br />
areas (%)<br />
18.88 3.47 1.53 1.23 0.47 0.38 0.47<br />
184
Table 3. Areas C<strong>on</strong>trolled by Parasitoids (ha)<br />
Trichogramma Brac<strong>on</strong><br />
1936.6 975<br />
ii. Diseases: The main diseases that cause some damage and decrease cott<strong>on</strong><br />
producti<strong>on</strong> are:<br />
Verticillium Wilt disease caused by Verticillium albo- atrum., and<br />
Damping- <str<strong>on</strong>g>of</str<strong>on</strong>g>f caused by Rhizoct<strong>on</strong>ia solani, Fusarium sp., Altennaria sp.<br />
Planting tolerant varieties such as Aleppo 40, Aleppo 33-1 and Rakka 5,<br />
and following crop rotati<strong>on</strong> with cereals had reduced <str<strong>on</strong>g>the</str<strong>on</strong>g> incidence and<br />
severity <str<strong>on</strong>g>of</str<strong>on</strong>g> Verticillium Wilt. Double seed treatment with BCNP plus<br />
mercurial fungicides or thirarm or <str<strong>on</strong>g>the</str<strong>on</strong>g> use <str<strong>on</strong>g>of</str<strong>on</strong>g> vitavax are recommended to<br />
c<strong>on</strong>trol damping- <str<strong>on</strong>g>of</str<strong>on</strong>g>f under Syrian c<strong>on</strong>diti<strong>on</strong>s.<br />
iii. Weeds: The main weeds in cott<strong>on</strong> fields in Syria are:<br />
Berrnuda grass Cynod<strong>on</strong> dutyl<strong>on</strong><br />
Rabbit grass Panicum col<strong>on</strong>um<br />
Red pigweed Amaranthus retreflexus<br />
Cooklebur Xanthium brasillium<br />
Field hind weed C<strong>on</strong>volvulus arvensis<br />
Foxtail mille Setavia italica<br />
Johns<strong>on</strong> grass Sorgh um helapense<br />
Goose foo Ghenopodium album<br />
Purslane Portulaca oleracea<br />
Hight shade Solanum alatum<br />
Weeds in cott<strong>on</strong> fields are kept to a minimum, mostly because Syrian farmers<br />
are very active and tends to keep <str<strong>on</strong>g>the</str<strong>on</strong>g>ir fields clean by cultivati<strong>on</strong>. Preplanting<br />
incorporated herbicides are used widely, almost 90 % <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong><br />
area is treated annually with Treflan (Trifluralin) at 2.5 L/ ha.<br />
During <str<strong>on</strong>g>the</str<strong>on</strong>g> growing seas<strong>on</strong> Fusilade (Fluassifop- butil) is used as spot<br />
treatment at <str<strong>on</strong>g>the</str<strong>on</strong>g> rate <str<strong>on</strong>g>of</str<strong>on</strong>g> 2.5 L/ ha to c<strong>on</strong>trol perennial weeds such as Bermuda<br />
grass and J<strong>on</strong>s<strong>on</strong> grass while broad- leaf weeds are c<strong>on</strong>trolled through manual<br />
labour.<br />
4. Varieties Released, Their Characteristics and Origin<br />
Different varieties planted in Syria, each variety pertains to a cott<strong>on</strong><br />
producing regi<strong>on</strong> in order to remedy some adverse envir<strong>on</strong>mental c<strong>on</strong>diti<strong>on</strong>s<br />
185
such as high temperature and Verticillium Wilt disease. Currently <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
cultivated cott<strong>on</strong> varieties are:<br />
Aleppo 40: A cross produced an excellent strain since its fourth generati<strong>on</strong>.<br />
This strain gave an increase in yield in 1974, so it was given <str<strong>on</strong>g>the</str<strong>on</strong>g> name Aleppo<br />
40 in 1977 and has covered most areas planted to cott<strong>on</strong> since 1980- 81. This<br />
new variety has a high tolerance to Verticillium Wilt, staple length <str<strong>on</strong>g>of</str<strong>on</strong>g> 1 and<br />
3/32 inch and fibre strength up to 92.000 p.s.i.<br />
Aleppo 33-1: This variety is a strain selected from <str<strong>on</strong>g>the</str<strong>on</strong>g> American variety,<br />
Acala S.j.4. It is more tolerant to Verticillium Wilt than Aleppo 40.<br />
Therefore; it is distributed in areas which are highly infested by wilt diseases<br />
in Hama province. Its staple length and fiber strength are better than Aleppo<br />
40.<br />
Rakka 5: This variety is a strain selected from <str<strong>on</strong>g>the</str<strong>on</strong>g> Russian variety, Tashkent<br />
3. This variety is earlier and more tolerant to Verticillium Wilt than any o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
variety, but it is less in lint percentage than Aleppo 40. Rakka 5 is grown in<br />
Rakka province which is intensively infested by Verticillium Wilt.<br />
Deir Ezzore 22: This variety is a strain selected from <str<strong>on</strong>g>the</str<strong>on</strong>g> American variety,<br />
Delta&Pine 41. It is earlier, more tolerant to heat, higher in yield and lint<br />
quantities than Aleppo 40. In Deir Ezzore province. Thus it is pertained for<br />
cultivati<strong>on</strong> in this area. Table 2 shows three years pref<strong>on</strong>nace <str<strong>on</strong>g>of</str<strong>on</strong>g> Syrian<br />
cultivated cott<strong>on</strong> varieties.<br />
Aleppo 90 (Taskent 3 x Delta & Pine 70): This variety is earlier and more<br />
tolerant to Verticillium Wilt than any o<str<strong>on</strong>g>the</str<strong>on</strong>g>r variety. Aleppo 90 is increased<br />
with <str<strong>on</strong>g>the</str<strong>on</strong>g> average 7% in Al- Hassaka and 5% in Aleppo. This strain excels in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> staple length and fiber strength but <str<strong>on</strong>g>the</str<strong>on</strong>g> average <str<strong>on</strong>g>of</str<strong>on</strong>g> ginning is less with <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
estimated 1.6%.<br />
Aleppo 118 (BW 76-31 x Aleppo 40): This variety is superior to Aleppo 90<br />
with <str<strong>on</strong>g>the</str<strong>on</strong>g> estimated 13 % <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> and 12 % <str<strong>on</strong>g>of</str<strong>on</strong>g> seed- cott<strong>on</strong>. It is better than<br />
Aleppo 40 in its technological species.<br />
Table 4. Three-Year Performance <str<strong>on</strong>g>of</str<strong>on</strong>g> Syrian Cultivated Cott<strong>on</strong> Varieties<br />
varieties<br />
Yield(seed<br />
cott<strong>on</strong><br />
Kg/ ha)*<br />
Degree <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
wilt<br />
Resistance<br />
Gining<br />
turn-out %<br />
Earliness<br />
st.<br />
Picking % Fiboro-Gragh<br />
2.5 % (inch)<br />
186<br />
Fibre properties<br />
Pressley<br />
Index<br />
Stelo-mter<br />
gm/tex<br />
Micr<strong>on</strong>aire<br />
Reading<br />
Aleppo 40 4070 1.61 39.31 72 1.133 8.82 21.44 4.67<br />
Rakka 5 4330 0.93 38.35 76 1.118 8.68 22.57 4.68<br />
Aleppo 33-1 3620 1.38 38.94 68 1.206 9.38 25.14 4.36<br />
Deir Ezzore 22 3710 1.90 41.20 76 1.172 8.84 21.42 4.37<br />
Aleppo– 90 4741 0.55 38.20 77 1.165 9.14 23.42 4.36<br />
Aleppo – 118 4775 0.96 39.98 79 1.192 10.25 25.60 4.40<br />
* Average 6 stati<strong>on</strong>s
5. Seed Producti<strong>on</strong><br />
The General Organizati<strong>on</strong> for Seed Multiplicati<strong>on</strong> (G.O.S.M) has <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
resp<strong>on</strong>sibility to multiple all <str<strong>on</strong>g>the</str<strong>on</strong>g> seeds in Syria, using <str<strong>on</strong>g>the</str<strong>on</strong>g> farmers land(20000<br />
t<strong>on</strong>s seeds). The C.R.A. provides <str<strong>on</strong>g>the</str<strong>on</strong>g> G.O.S.M. with <str<strong>on</strong>g>the</str<strong>on</strong>g> improved varieties<br />
(111.5 t<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> seeds produced in 2004).<br />
6. Cott<strong>on</strong> Marketing<br />
The cott<strong>on</strong> Marketing Organizati<strong>on</strong> (C.M.O) is <str<strong>on</strong>g>the</str<strong>on</strong>g> sole body authorized to<br />
purchase seed cott<strong>on</strong> directly from producers. In <str<strong>on</strong>g>the</str<strong>on</strong>g> seas<strong>on</strong> 2003-2004<br />
(C.M.O.) operated 17 gin – mills distributed in <str<strong>on</strong>g>the</str<strong>on</strong>g> most cott<strong>on</strong> producing<br />
regi<strong>on</strong>s, Aleppo, Deir Ezzore, Hassaka, Hama,Homs, Idleb and Rakka. Local<br />
Cott<strong>on</strong> c<strong>on</strong>sumed in Syrian cott<strong>on</strong> ginning mills in 2003-2004 amounted to<br />
about 145000 t<strong>on</strong>s which c<strong>on</strong>stitutes 55 % <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> total local producti<strong>on</strong>. The<br />
cost <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> agriculture operati<strong>on</strong> is relatively high due mostly to expensive<br />
water c<strong>on</strong>sumpti<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> agricultural methods practiced in Syria. The<br />
cott<strong>on</strong> ginning and marketing organizati<strong>on</strong> buys all cott<strong>on</strong> agriculture<br />
producti<strong>on</strong> from farmers with prices higher than <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> cost within a<br />
nati<strong>on</strong>al support scheme for <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> producers. Ginned cott<strong>on</strong> exports are<br />
sold at internati<strong>on</strong>al prices.<br />
7. Future Needs for Cooperati<strong>on</strong><br />
- C<strong>on</strong>tinue <str<strong>on</strong>g>the</str<strong>on</strong>g> cooperati<strong>on</strong> in cott<strong>on</strong> breeding and varieties exchange.<br />
- Training and workshops.<br />
- Solve <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> problem in Syria, related to sprinkler irrigati<strong>on</strong> systems<br />
which affect and increase <str<strong>on</strong>g>the</str<strong>on</strong>g> Angular leaf spots, caused by <str<strong>on</strong>g>the</str<strong>on</strong>g> Bacteria<br />
Xanthom<strong>on</strong>as campestris pv. malvacearum.<br />
- PROJECT: DELUTE ACID DELINTING PLANT FOR COTTON<br />
PLANTING SEED (CAPACITY 1-1.5 TON PER HOUR) FUZZY<br />
COTTON SEED.<br />
187
188
COTTON IN TURKEY: THE ROLE OF COTTON RESEARCH<br />
INSTITUTE IN DEVELOPING OF COTTON<br />
Abstract<br />
İsa Özkan<br />
Cott<strong>on</strong> Research Institute, Nazilli, Turkey<br />
Cott<strong>on</strong> (G. hirsutum L.) is a strategically important plant for Turkish<br />
agriculture and plays a vital role in <str<strong>on</strong>g>the</str<strong>on</strong>g> life <str<strong>on</strong>g>of</str<strong>on</strong>g> lots <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers in Turkey and<br />
also around <str<strong>on</strong>g>the</str<strong>on</strong>g> world. Turkey is <str<strong>on</strong>g>the</str<strong>on</strong>g> sixth largest cott<strong>on</strong> producing country <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> world with approximately 700 000 ha planting area and cott<strong>on</strong> producti<strong>on</strong><br />
provides employment to lots <str<strong>on</strong>g>of</str<strong>on</strong>g> people in this sector. Turkey has had major<br />
development in cott<strong>on</strong> productivity and quality. In this development,<br />
Research institutes has played a very important role, especially Cott<strong>on</strong><br />
Research Institute in Nazilli. The increase in producti<strong>on</strong> resulted from high<br />
average yield per unit area <strong>on</strong>ly 309 kg/ha in 1960 and increase 1428 kg /ha<br />
in 2003. The duties <str<strong>on</strong>g>of</str<strong>on</strong>g> Institute are to improve genetic potential <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong><br />
making basic and strategic researches, to improve agr<strong>on</strong>omic practices,<br />
mechanizati<strong>on</strong>, harvesting, laboratory and technological substructure<br />
opportunities and help o<str<strong>on</strong>g>the</str<strong>on</strong>g>r instituti<strong>on</strong>s with <str<strong>on</strong>g>the</str<strong>on</strong>g>se opportunities, to organize<br />
seminars, courses and c<strong>on</strong>ferences in order to disseminate new techniques<br />
and finally to prepare cott<strong>on</strong> seed and provide for <str<strong>on</strong>g>the</str<strong>on</strong>g> farmers’ demand.<br />
In Aegean regi<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> most popular variety is Nazilli 84-S developed by<br />
Cott<strong>on</strong> Research Institute. O<str<strong>on</strong>g>the</str<strong>on</strong>g>r varieties developed by <str<strong>on</strong>g>the</str<strong>on</strong>g> Institute are<br />
widespread as local in Aegean regi<strong>on</strong>. Before 5 or 6 years, Nazilli 84 and<br />
Nazilli 84-S varieties had 95% planting area <str<strong>on</strong>g>of</str<strong>on</strong>g> Aegean regi<strong>on</strong>. Aegean<br />
regi<strong>on</strong> was a great cott<strong>on</strong> field including Nazilli 84-S cott<strong>on</strong> variety. This was<br />
very important and good for textile industry, because almost all <str<strong>on</strong>g>the</str<strong>on</strong>g> fibers in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong> had same characteristics. As such Cott<strong>on</strong> Research Institute has an<br />
important positi<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> Regi<strong>on</strong>. IDB cott<strong>on</strong> producing member countries<br />
must cooperate with each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r and private sector to increase communicati<strong>on</strong>,<br />
exchange germplasm, improve higher yield and good quality varieties, reduce<br />
producti<strong>on</strong> cost, share technological improvement, improve product diversity<br />
and establish an Internati<strong>on</strong>al Cott<strong>on</strong> Research Center including IDB member<br />
countries. Internati<strong>on</strong>al Cott<strong>on</strong> Research Center will help to enhance<br />
productivity and competitiveness by organizing studies between IDB member<br />
countries and exchanging research programs and by supply sharing <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
experiences.<br />
189
I. INTRODUCTION<br />
Cott<strong>on</strong> (G. hirsutum L.) is a strategically important plant for Turkish<br />
agriculture and plays a vital role in <str<strong>on</strong>g>the</str<strong>on</strong>g> life <str<strong>on</strong>g>of</str<strong>on</strong>g> lots <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers in Turkey and<br />
also around <str<strong>on</strong>g>the</str<strong>on</strong>g> world. Turkey is <str<strong>on</strong>g>the</str<strong>on</strong>g> sixth largest cott<strong>on</strong> producing country <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> world with approximately 700,000 ha planting area and cott<strong>on</strong> producti<strong>on</strong><br />
provides employment to lots <str<strong>on</strong>g>of</str<strong>on</strong>g> people in this sector. Fur<str<strong>on</strong>g>the</str<strong>on</strong>g>rmore, 40% <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Turkey’s exports come from cott<strong>on</strong> and cott<strong>on</strong>-made product. Cott<strong>on</strong> also<br />
plays a significant role by providing employment to <str<strong>on</strong>g>the</str<strong>on</strong>g> people. Cott<strong>on</strong> has<br />
driven force for ec<strong>on</strong>omical and sociological development in Turkey.<br />
Turkey has had major development in cott<strong>on</strong> productivity and quality from<br />
1960 till now (Table 1). In this development, Research institutes have played<br />
very important role, especially Cott<strong>on</strong> Research Institute in Nazilli. In 1960<br />
total producti<strong>on</strong> was 192,000 metric t<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> lint produced from 621,000<br />
hectares and in 2003 <str<strong>on</strong>g>the</str<strong>on</strong>g> annual producti<strong>on</strong> was 899,000 t<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> lint obtained<br />
from 630,000 hectares. The increase in producti<strong>on</strong> resulted from high average<br />
yield per unit area <strong>on</strong>ly 309 kg/ha in 1960 and increase 1428 kg /ha in 2003<br />
(Table 1). In Turkey, Cott<strong>on</strong> yield has been higher than twice <str<strong>on</strong>g>of</str<strong>on</strong>g> world<br />
average cott<strong>on</strong> yield since 1970. This situati<strong>on</strong> has got significant advantages<br />
for Turkey against o<str<strong>on</strong>g>the</str<strong>on</strong>g>r country.<br />
The increase in yield is a result <str<strong>on</strong>g>of</str<strong>on</strong>g> new high yielding cultivars, better<br />
irrigati<strong>on</strong> techniques and increase in <str<strong>on</strong>g>the</str<strong>on</strong>g> use <str<strong>on</strong>g>of</str<strong>on</strong>g> fertilizers, insecticides,<br />
fungicides and better farming technology. Today, Turkey is am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> top<br />
three countries in <str<strong>on</strong>g>the</str<strong>on</strong>g> world in average yield per hectare and Turkey is <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
seventh world cott<strong>on</strong> producing country in planting area and also in<br />
producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world (ICAC, 2003). Due to <str<strong>on</strong>g>the</str<strong>on</strong>g> low market prices in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
last four year, cott<strong>on</strong> growing area has decreased but in spite <str<strong>on</strong>g>of</str<strong>on</strong>g> everything,<br />
cott<strong>on</strong> is a not given up crop for Turkish farmers and also Turkish ec<strong>on</strong>omy.<br />
So cott<strong>on</strong> will c<strong>on</strong>tinue to be produced. Cott<strong>on</strong> Research Institute (in Nazilli),<br />
has managed to solve problems and improve new varieties and it has<br />
achieved lots <str<strong>on</strong>g>of</str<strong>on</strong>g> thing.<br />
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Table 1. Progress in Planting Area, Producti<strong>on</strong> and Yield in Turkey<br />
Years Planting Area Producti<strong>on</strong> (Lint) Lint Yield World<br />
(1000 ha) (1000 t<strong>on</strong>)<br />
(kg/ha) (kg/ha)<br />
1932 158 20 128 -<br />
1940 324 77 238 -<br />
1951 642 150 234 237<br />
1960 621 192 309 298<br />
1970 528 400 758 367<br />
1980 672 500 744 411<br />
1990 641 655 1021 550<br />
1995 757 851 1125 567<br />
1996 750 802 1069 576<br />
1997 719 838 1165 590<br />
1998 757 882 1166 563<br />
1999 719 791 1100 581<br />
2000 654 880 1345 576<br />
2001 693 922 1330 624<br />
2002 695 964 1388 638<br />
2003 630 899 1428 635<br />
Source: Sabit A.Ö. et al., 2004.<br />
II. IMPROVEMENT IN COTTON<br />
Before <str<strong>on</strong>g>the</str<strong>on</strong>g> Turkish Republic was established, <str<strong>on</strong>g>the</str<strong>on</strong>g> cultivated cott<strong>on</strong>s in<br />
Anatolia were old world’s cultivars especially G. herbaceum. At that time,<br />
Turkish cott<strong>on</strong> producti<strong>on</strong> was approximately 15,000 t<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> lint. The major<br />
improvement and increase in yield was achieved after <str<strong>on</strong>g>the</str<strong>on</strong>g> Turkish Republic<br />
established in 1923. In 1940 <str<strong>on</strong>g>the</str<strong>on</strong>g> total producti<strong>on</strong> was about 77,000 metric<br />
t<strong>on</strong>s. Meanwhile, in 1934 Cott<strong>on</strong> Research Institute was established and by<br />
effect <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Research Institute and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r research institutes, after World<br />
War II, producti<strong>on</strong> progressed very fast because <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> increase <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> planted<br />
area and <str<strong>on</strong>g>the</str<strong>on</strong>g> introducti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> new productive cultivars from o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries.<br />
In 1951, after <str<strong>on</strong>g>the</str<strong>on</strong>g> introducti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> new varieties, total producti<strong>on</strong> rose up to<br />
150,000 metric t<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> lint produced from 642,000 hectares and nowadays,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> annual producti<strong>on</strong> is 899,000 t<strong>on</strong>s obtained from 630,000 hectares. The<br />
increase in producti<strong>on</strong> resulted from increasing high average yield per unit<br />
area from <strong>on</strong>ly 234 kg/ha in 1951 to 1428 kg /ha in 2003 (Table 1). This<br />
improvement has occurred not <strong>on</strong>ly breeding studies but also improving new<br />
cultural techniques. After starting breeding studies, a lot <str<strong>on</strong>g>of</str<strong>on</strong>g> institute<br />
developed and registered new cultivars in different properties obtained<br />
different ways. These cultivars are shown in Table 2. As shown in Table 2, so<br />
far 35 cott<strong>on</strong> cultivars have been developed and released by different research<br />
instituti<strong>on</strong>s and have been given for <str<strong>on</strong>g>the</str<strong>on</strong>g> farmers’ use in Turkey. It is shown<br />
that, Cott<strong>on</strong> Research Institute has got <str<strong>on</strong>g>the</str<strong>on</strong>g> biggest share <str<strong>on</strong>g>of</str<strong>on</strong>g> cultivars (Table 2).<br />
191
Table 2. Cultivars Developed and Registered by Research Instituti<strong>on</strong>s<br />
in Turkey<br />
Cultivars Breeding Method Instituti<strong>on</strong> Year<br />
Acala-1086 Selecti<strong>on</strong> Nazilli C.R.I. 1959<br />
Maydos Yerlisi Selecti<strong>on</strong> Nazilli C.R.I. 1964<br />
Coker 100 A/2 Selecti<strong>on</strong> Nazilli C.R.I. 1964<br />
Deltapine 15/21 Selecti<strong>on</strong> Adana C.R.I. 1964<br />
Sealand-542 Introducti<strong>on</strong> Nazilli C.R.I. 1965<br />
Caroline Queen –201 Introducti<strong>on</strong> Adana C.R.I. 1968<br />
Nazilli 66-100 Selecti<strong>on</strong> Nazilli C.R.I. 1975<br />
Adana 967/10 Selecti<strong>on</strong> Adana C.R.I. 1977<br />
Delcerro Introducti<strong>on</strong> Nazilli C.R.I. 1977<br />
Ege-69 Hybridizati<strong>on</strong> Nazilli C.R.I. 1977<br />
Sayar-314 Hybridizati<strong>on</strong> Adana C.R.I. 1980<br />
Çukurova 1518 Selecti<strong>on</strong> Adana C.R.I. 1982<br />
Nazilli-84 Hybridizati<strong>on</strong> Nazilli C.R.I. 1984<br />
Glandless-86 Hybridizati<strong>on</strong> Ege University 1986<br />
Nazilli-87 Hybridizati<strong>on</strong> Nazilli C.R.I. 1987<br />
Nazilli M 503 Hybridizati<strong>on</strong> Nazilli C.R.I. 1992<br />
Nazilli M-39 Hybridizati<strong>on</strong> Nazilli C.R.I. 1992<br />
Maras-92 Hybridizati<strong>on</strong> Maras A.R.I. 1992<br />
Ersan-92 Hybridizati<strong>on</strong> Maras A.R.I. 1992<br />
Adana 98 Introducti<strong>on</strong> Adana C.R.I. 1998<br />
Nazilli 84-S Selecti<strong>on</strong> Nazilli C.R.I. 1998<br />
Nazilli-143 Hybridizati<strong>on</strong> Nazilli C.R.I. 1998<br />
Nazilli M 342 Hybridizati<strong>on</strong> Nazilli C.R.I. 1998<br />
Çun S-2 Hybridizati<strong>on</strong> Nazilli C.R.I. 1999<br />
Şahin 2000 Selecti<strong>on</strong> Nazilli C.R.I. 2001<br />
Aydın 110 Hybridizati<strong>on</strong> Nazilli C.R.I. 2001<br />
Dicle-2002 Hybridizati<strong>on</strong> Diyarbakır C.R.I. 2002<br />
Gürelbey Hybridizati<strong>on</strong> Nazilli C.R.I. 2002<br />
Ekşi 911 Hybridizati<strong>on</strong> Nazilli C.R.I. 2002<br />
Özbek 142 Hybridizati<strong>on</strong> Nazilli C.R.I. 2002<br />
Gossypolsüz Nazilli Hybridizati<strong>on</strong> Nazilli C.R.I. 2002<br />
Nazilli 954 Selecti<strong>on</strong> Nazilli C.R.I. 2003<br />
Nazilli 342 Hybridizati<strong>on</strong> Nazilli C.R.I. 2003<br />
Nazilli 303 Hybridizati<strong>on</strong> Nazilli C.R.I. 2003<br />
Source: Harem, E., 2003.<br />
As known, lots <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>m are not planted now. Some agr<strong>on</strong>omical and<br />
technological properties <str<strong>on</strong>g>of</str<strong>on</strong>g> currently cultivated varieties are given regi<strong>on</strong>ally<br />
in Table 3. Most <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> in Turkey (98 %) is grown with<br />
irrigati<strong>on</strong> and is harvested by hand. The major challenge <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> in Turkey<br />
is picking cost. Also o<str<strong>on</strong>g>the</str<strong>on</strong>g>r cost <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs such as fertilizer, pesticides and<br />
liquid fuel are forcing <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong>.<br />
192
Table 3. Lint Yield and Some Fiber Properties<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> Currently Cultivated Varieties in Turkey<br />
Lint Yield Fiber Length Fineness Strength (1000 Lint<br />
(Kg/ha) (mm) (Micr<strong>on</strong>aire) lb/inch²) (%)<br />
Cultivars Aegean Regi<strong>on</strong><br />
Nazilli 84 1,968 28.7 4.4 81.2 43.0<br />
Nazilli 84-S 2,276 29.6 4.4 82.7 44.5<br />
Nazilli M-503 1,636 30.5 4.3 78.6 40.9<br />
Nazilli 143 1,901 28.8 4.2 84.3 40.7<br />
Aydın 110 1,390 34.1 4.0 110.2 34.3<br />
Şahin 2000 1,989 30.5 4.5 80.2 41.0<br />
Özbek 142 2,034 29.3 5.0 92.5 46.0<br />
Carmen 2,120 30.1 4.7 91.5 40.8<br />
SG-125 2,140 29.4 4.6 79.2 42.0<br />
Çukurova Regi<strong>on</strong><br />
SG-125 2,140 29.4 4.6 79.2 42.0<br />
Çukurova 1518 1.538 29.3 4.1 85.9 41.0<br />
Lachata 1.609 29.5 4.5 87.3 40.5<br />
South Eastern Anatolia Regi<strong>on</strong><br />
St<strong>on</strong>oville 453 1.989 30.9 4.9 85.8 41.7<br />
Deltaopal 1,673 28.0 3.2 81.0 39.0<br />
Tex 1,590 29.8 4.5<br />
Antalya Regi<strong>on</strong><br />
90.5 40.9<br />
SG-125 2,140 29.4 4.6 79.2 42.0<br />
Source: Harem, E., 2003.<br />
Until 1999, <str<strong>on</strong>g>the</str<strong>on</strong>g> increases in cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> were compensated by<br />
increasing yield or market prices but now any small increases in cost <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
producti<strong>on</strong> are influencing <str<strong>on</strong>g>the</str<strong>on</strong>g> farmers’ income. Before 1999, almost all<br />
Turkey cott<strong>on</strong> was picked by hand. In <str<strong>on</strong>g>the</str<strong>on</strong>g> last five years, due to <str<strong>on</strong>g>the</str<strong>on</strong>g> scarcity<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> labor in Turkey, picking cost has risen up to 20-30% <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> market<br />
price, so this is forcing <str<strong>on</strong>g>the</str<strong>on</strong>g> Turkish cott<strong>on</strong> producers to use machines for<br />
harvest <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>. Estimately almost 90-100 machines already exist in<br />
Turkey. Sustainable cott<strong>on</strong> producti<strong>on</strong> must have been higher yield but lower<br />
costs. It is clear that harvest machine must enter cott<strong>on</strong> producers’ life in<br />
Turkey and it started to enter our life through <str<strong>on</strong>g>the</str<strong>on</strong>g> last five or six year.<br />
III. COTTON RESEARCH INSTITUTE<br />
Cott<strong>on</strong> Research Institute was established in 1934, in Nazilli, west coast <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Turkey, named as “Cott<strong>on</strong> Breeding Stati<strong>on</strong> and Producti<strong>on</strong> Farm”, and in<br />
1987, its name was changed to “Cott<strong>on</strong> Research Institute”. The duties <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Institute are to improve genetic potential <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> making basic and strategic<br />
researches, to improve agr<strong>on</strong>omic practices, mechanizati<strong>on</strong>, harvesting,<br />
laboratory and technological substructure opportunities and help o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
instituti<strong>on</strong>s with <str<strong>on</strong>g>the</str<strong>on</strong>g>se opportunities, to organize seminars, courses and<br />
c<strong>on</strong>ferences in order to disseminate <str<strong>on</strong>g>of</str<strong>on</strong>g> new techniques and finally to prepare<br />
193
cott<strong>on</strong> seed and to meet <str<strong>on</strong>g>the</str<strong>on</strong>g> farmers’ demand. Cott<strong>on</strong> Research Institute is a<br />
coordinator establishment in Turkey <strong>on</strong> cott<strong>on</strong> researches. Cott<strong>on</strong> Research<br />
Institute has carried out lots <str<strong>on</strong>g>of</str<strong>on</strong>g> studies to improve resistance to Verticillium<br />
Wilt, earliness, high lint percentage, l<strong>on</strong>g staple and high yielding varieties by<br />
using different breeding methods. As a result <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>se studies today, <str<strong>on</strong>g>the</str<strong>on</strong>g> most<br />
quality cott<strong>on</strong> crops <str<strong>on</strong>g>of</str<strong>on</strong>g> Turkey is produced in Aegean regi<strong>on</strong>. Aegean cott<strong>on</strong><br />
can be sold at higher market prices than those <str<strong>on</strong>g>of</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r regi<strong>on</strong>s in Turkey and<br />
native textile industry prefers it because it enables good quality producti<strong>on</strong>.<br />
By means <str<strong>on</strong>g>of</str<strong>on</strong>g> varieties developed by Cott<strong>on</strong> Research Institute, better quality<br />
cott<strong>on</strong> can be produced in Aegean regi<strong>on</strong>. And also, cott<strong>on</strong> producers play a<br />
role too because <str<strong>on</strong>g>the</str<strong>on</strong>g>y are well-informed and experienced in cott<strong>on</strong> producing.<br />
They can solve many <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir problems <strong>on</strong> cott<strong>on</strong> producti<strong>on</strong> by <str<strong>on</strong>g>the</str<strong>on</strong>g>mselves.<br />
In Aegean regi<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> most popular variety is Nazilli 84-S developed by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Cott<strong>on</strong> Research Institute. O<str<strong>on</strong>g>the</str<strong>on</strong>g>r varieties developed by <str<strong>on</strong>g>the</str<strong>on</strong>g> Institute are<br />
widespread locally in Aegean regi<strong>on</strong>. Before 5 or 6 years Nazilli 84 and<br />
Nazilli 84-S varieties had 95% planting area <str<strong>on</strong>g>of</str<strong>on</strong>g> Aegean regi<strong>on</strong>. Aegean<br />
regi<strong>on</strong> was a great cott<strong>on</strong> field including Nazilli 84-S cott<strong>on</strong> variety. This was<br />
very important and good for textile industry, because almost <str<strong>on</strong>g>the</str<strong>on</strong>g> whole fibers<br />
in <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong> had same characteristics. As such Cott<strong>on</strong> Research Institute has<br />
an important positi<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> Regi<strong>on</strong>. Today, varieties developed by Cott<strong>on</strong><br />
Research Institute have 60-65% planting area in <str<strong>on</strong>g>the</str<strong>on</strong>g> Regi<strong>on</strong>. As known, GAP<br />
(South East Anatolian Projects) Regi<strong>on</strong> is <str<strong>on</strong>g>the</str<strong>on</strong>g> new area for cott<strong>on</strong> producti<strong>on</strong><br />
compared to o<str<strong>on</strong>g>the</str<strong>on</strong>g>r regi<strong>on</strong>s. Cott<strong>on</strong> Research Institute has carried out a project,<br />
except for Aegean regi<strong>on</strong>, known as <str<strong>on</strong>g>the</str<strong>on</strong>g> “Integrated Cott<strong>on</strong> Crop<br />
Management in GAP Regi<strong>on</strong>” as a partner with o<str<strong>on</strong>g>the</str<strong>on</strong>g>r institutes to solve GAP<br />
regi<strong>on</strong>’s problem and improve new productive and high quality cott<strong>on</strong><br />
varieties for <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong>. As a result <str<strong>on</strong>g>of</str<strong>on</strong>g> successful studies till today, <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong><br />
Research Institute has achieved <str<strong>on</strong>g>the</str<strong>on</strong>g> most important targets for <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong> and<br />
country’s cott<strong>on</strong> producti<strong>on</strong> and textile industry. I think it is also possible<br />
that <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Research Institute will help solve problems <str<strong>on</strong>g>of</str<strong>on</strong>g> IDB cott<strong>on</strong><br />
producing member countries for productivity and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r related matters.<br />
1. Breeding Studies<br />
In <str<strong>on</strong>g>the</str<strong>on</strong>g> beginning, adapting to <str<strong>on</strong>g>the</str<strong>on</strong>g> introduced materials from o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries<br />
was comm<strong>on</strong>. Then, producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> new cultivars was started by emphasizing<br />
<strong>on</strong> selecti<strong>on</strong> and hybridizati<strong>on</strong>. Principal objectives <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> breeding<br />
program in Turkey focus <strong>on</strong> improving yielding ability and fiber quality,<br />
earliness, adaptati<strong>on</strong> for specific regi<strong>on</strong>al c<strong>on</strong>diti<strong>on</strong>s and resistance to<br />
Verticillium Wilt (V.dahliae) and insects. Lint yield and fiber quality have<br />
always been <str<strong>on</strong>g>the</str<strong>on</strong>g> primary importance to <str<strong>on</strong>g>the</str<strong>on</strong>g> breeders because <str<strong>on</strong>g>the</str<strong>on</strong>g> greatest<br />
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pr<str<strong>on</strong>g>of</str<strong>on</strong>g>it is usually realized from maximizing yield. Because <str<strong>on</strong>g>the</str<strong>on</strong>g> rain usually<br />
begins in beginning <str<strong>on</strong>g>of</str<strong>on</strong>g> October and so limited vegetati<strong>on</strong> period, earliness is<br />
c<strong>on</strong>sidered <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> most important features <str<strong>on</strong>g>of</str<strong>on</strong>g> a cott<strong>on</strong> cultivars, especially<br />
Aegean regi<strong>on</strong>. Earliness enables <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> crop to develop during periods <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
more favorable moisture and to be harvested before damage from unfavorable<br />
wea<str<strong>on</strong>g>the</str<strong>on</strong>g>r c<strong>on</strong>diti<strong>on</strong>s. In <str<strong>on</strong>g>the</str<strong>on</strong>g> 1970’s Verticillium wilt was <str<strong>on</strong>g>the</str<strong>on</strong>g> most comm<strong>on</strong><br />
cott<strong>on</strong> disease in Turkey causing between 16 % to 38 % yield loss in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Aegean Regi<strong>on</strong>. The objective <str<strong>on</strong>g>of</str<strong>on</strong>g> breeding programs <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> research was<br />
focused <strong>on</strong> developing cott<strong>on</strong> cultivars tolerant to Verticillium wilt (V.<br />
dahliae Kleb.). Nazilli 66-100 was <str<strong>on</strong>g>the</str<strong>on</strong>g> first Turkish cott<strong>on</strong> cultivar developed<br />
with resistance to Verticillium wilt in 1975. Then, Nazilli 84 and Nazilli 87<br />
both with higher levels <str<strong>on</strong>g>of</str<strong>on</strong>g> resistance to Verticillium wilt were developed and<br />
released by Cott<strong>on</strong> Research Institute. Today as a result <str<strong>on</strong>g>of</str<strong>on</strong>g> breeding studies,<br />
25 cott<strong>on</strong> varieties were developed and released by Cott<strong>on</strong> Research Institute<br />
to <str<strong>on</strong>g>the</str<strong>on</strong>g> farmers’.(Table 2).<br />
At that time, a lot <str<strong>on</strong>g>of</str<strong>on</strong>g> projects were carried out to develop new cott<strong>on</strong> varieties<br />
not <strong>on</strong>ly to maintain or improve yield and fiber quality to levels acceptable to<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> spinners, but also to improve colored cott<strong>on</strong>, resistance to major insect<br />
pests and pathogens, particularly Verticillium wilt, <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> most important<br />
project to solve disease problem is Improvement <str<strong>on</strong>g>of</str<strong>on</strong>g> Turkish Cott<strong>on</strong> Varieties<br />
Using Molecular Techniques. In this project, improving a new variety<br />
resistance to Verticillium Wilt was <str<strong>on</strong>g>the</str<strong>on</strong>g> aim; by using marker gene<br />
technology. Besides <str<strong>on</strong>g>the</str<strong>on</strong>g>se varieties, <str<strong>on</strong>g>the</str<strong>on</strong>g>re are a lot <str<strong>on</strong>g>of</str<strong>on</strong>g> lines that can be<br />
investigated in suitable c<strong>on</strong>diti<strong>on</strong>s. There is a genetic stock barn to maintain<br />
varieties and advanced lines and this includes over 500 varieties.<br />
2. Agr<strong>on</strong>omic Studies<br />
Agr<strong>on</strong>omical studies have been c<strong>on</strong>ducted about suitable cultural properties<br />
to improve yield and fiber quality in cott<strong>on</strong> farming. The objectives <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
agr<strong>on</strong>omic studies are planting date, planting pattern, planting density,<br />
rotati<strong>on</strong>, hoeing, irrigati<strong>on</strong> and fertilizati<strong>on</strong> time, method and doses, and so<br />
<strong>on</strong>. Envir<strong>on</strong>mental Stresses especially salt and drought tolerances are being<br />
investigated in recent years.<br />
3. Studies <strong>on</strong> Technological Properties<br />
Technological studies are <strong>on</strong> cott<strong>on</strong> lint and boll properties. Because <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
main goal <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> is to obtain lint, technological studies have<br />
been c<strong>on</strong>ducted to help ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r breeding or agr<strong>on</strong>omic investigati<strong>on</strong>s by<br />
determining fiber characteristics <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> plant which is studied. For this<br />
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purpose, last year <strong>on</strong>e new HVI Spectrum machine and trash counter was set<br />
up. Now, with two HVI machine, much more sample can be tested faster than<br />
before.<br />
4. Cott<strong>on</strong> Pests and Diseases Studies<br />
One <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> most important subjects studied in Cott<strong>on</strong> Research Institute is<br />
cott<strong>on</strong> diseases and pests. Although insect pest populati<strong>on</strong> is low at Aegean<br />
regi<strong>on</strong>, studies <strong>on</strong> pest c<strong>on</strong>trol are being carried out to find easier and cheaper<br />
methods and sensitive to <str<strong>on</strong>g>the</str<strong>on</strong>g> envir<strong>on</strong>ment and human health. Verticillium<br />
Wilt is <str<strong>on</strong>g>the</str<strong>on</strong>g> most important disease <str<strong>on</strong>g>of</str<strong>on</strong>g> Aegean regi<strong>on</strong>. A lot <str<strong>on</strong>g>of</str<strong>on</strong>g> studies have<br />
been carried out to find out chemical and cultural methods and also breeding<br />
program have been c<strong>on</strong>ducted to improve resistance or tolerant varieties<br />
aiming at c<strong>on</strong>trol this disease. Introduced materials or new varieties<br />
improving inside are tested with respect to disease. For <str<strong>on</strong>g>the</str<strong>on</strong>g> purpose <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
assistance and ability to investigate much more effective studies, in Cott<strong>on</strong><br />
Research Institute, phytopathology laboratory was founded in 2004.<br />
5. Cott<strong>on</strong> Seed Producti<strong>on</strong> Activity<br />
One o<str<strong>on</strong>g>the</str<strong>on</strong>g>r functi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Research Institute is to produce new varieties <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
cott<strong>on</strong> seeds, developed and registered by <str<strong>on</strong>g>the</str<strong>on</strong>g> Institute and to make available<br />
for farmers required quantity and time. For this purpose, elite and original<br />
cott<strong>on</strong> seeds are produced <strong>on</strong> enough quantity, satisfying to demand.<br />
Depending <strong>on</strong> years, 100-150 thousand t<strong>on</strong>s original cott<strong>on</strong> seed is produced<br />
annually from 80 hectares planting area in Cott<strong>on</strong> Research Institute. In<br />
additi<strong>on</strong>, Cott<strong>on</strong> Research Institute has a sowgin establishment which has<br />
3500-4000 kg per hour capacity and a delintati<strong>on</strong> establishment which has<br />
1000-1200 kg per hour capacity.<br />
IV. THE WAYS OF ENHANCING PRODUCTIVITY AND<br />
COMPETITIVENESS IN IDB COTTON PRODUCING<br />
MEMBER COUNTRIES<br />
IDB cott<strong>on</strong> producing countries shared 30% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world total area and 29%<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world total producti<strong>on</strong> in 2003-2004 seas<strong>on</strong> (ICAC, 2003). The world<br />
average yield in 2003-2004 was 635 kg/ha but what a pity <strong>on</strong>ly seven<br />
countries from twenty-nine IDB cott<strong>on</strong> producing member countries have<br />
yield above world average (ICAC, 2003). Turkey and Syria has yield higher<br />
than twice <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world average yield. Turkey has <str<strong>on</strong>g>the</str<strong>on</strong>g> highest cott<strong>on</strong> lint yield<br />
with 1428 kg/ha according to Cott<strong>on</strong> Informati<strong>on</strong> Committee data in Turkey<br />
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compared to IDB member countries in 2003 (Sabit, 2004). In this phase,<br />
answers <str<strong>on</strong>g>of</str<strong>on</strong>g> two questi<strong>on</strong>s, what and how, must be exposed to enhance<br />
productivity and competitiveness in cott<strong>on</strong> sector.<br />
1. Increasing <str<strong>on</strong>g>of</str<strong>on</strong>g> Communicati<strong>on</strong><br />
IDB cott<strong>on</strong> producing member countries must communicate for learning from<br />
each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r’s experiences but <str<strong>on</strong>g>the</str<strong>on</strong>g>re is no communicati<strong>on</strong> system that countries<br />
can aware what is happening in member countries. So, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a need to form<br />
a communicati<strong>on</strong> system between IDB cott<strong>on</strong> producing member countries<br />
and also o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries. In additi<strong>on</strong>, a cott<strong>on</strong> journal must be published<br />
including studies in IDB member countries to keep <str<strong>on</strong>g>the</str<strong>on</strong>g>m c<strong>on</strong>nected to each<br />
o<str<strong>on</strong>g>the</str<strong>on</strong>g>r ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r <strong>on</strong>-line or hard copy.<br />
One <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> most important and effective communicati<strong>on</strong> systems is “Cott<strong>on</strong><br />
C<strong>on</strong>ferences”. Many countries, like <str<strong>on</strong>g>the</str<strong>on</strong>g> USA, Australia, etc., organize<br />
Nati<strong>on</strong>al Cott<strong>on</strong> C<strong>on</strong>ferences to bring toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r all participants, from farmers<br />
to industry, in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector and get feedback for improving <str<strong>on</strong>g>the</str<strong>on</strong>g> sector.<br />
That’s why, like <str<strong>on</strong>g>the</str<strong>on</strong>g>se countries, IDB cott<strong>on</strong> producing member countries<br />
have to urgently organize annual Cott<strong>on</strong> C<strong>on</strong>ferences <strong>on</strong> a regular basis to at<br />
least exchange <str<strong>on</strong>g>the</str<strong>on</strong>g>ir experiences. In Turkey, cott<strong>on</strong> meetings are held<br />
regularly every year to discuss recent studies, and to determine new strategies<br />
in cott<strong>on</strong> studies.<br />
2. Exchange <str<strong>on</strong>g>of</str<strong>on</strong>g> Varieties and Germplasm<br />
First <str<strong>on</strong>g>of</str<strong>on</strong>g> all, varieties which have high yield and quality must be exchanged<br />
between each IDB cott<strong>on</strong> producing member. Variety exchange is very<br />
important and necessary to discover appropriate varieties for o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries<br />
as an introducti<strong>on</strong> material. Growing varieties in Turkey has high yield as<br />
shown in Table 3. Of course cott<strong>on</strong> producti<strong>on</strong> c<strong>on</strong>diti<strong>on</strong>s are different in IDB<br />
member countries but it is worth it to try our varieties in countries where<br />
yield is low. Exchange <str<strong>on</strong>g>of</str<strong>on</strong>g> germplasm is ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r important c<strong>on</strong>cern because<br />
good germplasm is <str<strong>on</strong>g>the</str<strong>on</strong>g> basis for a successful breeding program.<br />
Unfortunately, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is no germplasm bank or informati<strong>on</strong> in any country that<br />
can give assistance germplasm breeders about availability in different<br />
countries. That’s why, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a need to establish a germplasm bank directed<br />
towards IDB cott<strong>on</strong> producing member countries. For <str<strong>on</strong>g>the</str<strong>on</strong>g> sake <str<strong>on</strong>g>of</str<strong>on</strong>g> establishing<br />
a germplasm bank, Cott<strong>on</strong> Research Institute has been readied for duty. Last<br />
year a genetic stock unit was established in <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Research Institute.<br />
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3. Improving High Yielding and Good Quality Varieties<br />
Associate breeding studies must be c<strong>on</strong>ducted to develop high productive and<br />
good quality varieties in IDB countries. Since cott<strong>on</strong> is a sensitive plant that<br />
shows a high reacti<strong>on</strong> to climatic c<strong>on</strong>diti<strong>on</strong>s, breeders must improve varieties<br />
suitable for local c<strong>on</strong>diti<strong>on</strong>s. Exchange <str<strong>on</strong>g>of</str<strong>on</strong>g> germplasm is a necessity for<br />
improving new varieties. Cott<strong>on</strong> growers in IDB member countries must<br />
plant high quality certified seed. At <str<strong>on</strong>g>the</str<strong>on</strong>g> same time, sustainability <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong><br />
producti<strong>on</strong> must be improved by decreasing <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong>, because<br />
high yield does not mean higher efficiency if <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> is high.<br />
4. Reducing Cost <str<strong>on</strong>g>of</str<strong>on</strong>g> Producti<strong>on</strong><br />
To decrease producti<strong>on</strong> cost;<br />
• Lower soil treatment methods must be used,<br />
• Pesticide usage must be reduced by using new methods i.e., IPM,<br />
• Machine harvesting must be used for decreasing harvest cost which is<br />
25-30% <str<strong>on</strong>g>of</str<strong>on</strong>g> total producti<strong>on</strong> cost in some countries.<br />
5. Share <str<strong>on</strong>g>of</str<strong>on</strong>g> Technological Improvement<br />
IDB member countries can learn from each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r about new technology such<br />
as harvest machinery, spray machinery, ginning technology, and pest c<strong>on</strong>trol<br />
methods. In additi<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g>y can establish a training center to study methods<br />
for improving new technology <strong>on</strong> harvest machinery and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r cott<strong>on</strong> issues.<br />
Besides machinery technology, breeding technology must be shared too.<br />
Molecular techniques can be used in a breeding study except classical<br />
methods. Molecular techniques are expensive compared to classical methods<br />
but more effective results can be obtained in this way. Biotechnology <str<strong>on</strong>g>of</str<strong>on</strong>g>fers<br />
opportunities to enhance breeders’ success in developing new varieties. I<br />
believe that, if a good project found, IDB will support it financially.<br />
6. Private Sector<br />
There are a lot <str<strong>on</strong>g>of</str<strong>on</strong>g> private foundati<strong>on</strong>s in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector, but almost all <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>m are studying marketing. Of course, marketing is very important for a<br />
firm, but research and development programs are never undervalued.<br />
Therefore, <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector must be stimulated to investigate cott<strong>on</strong><br />
research. The private sector must supply funds and be a partner in cott<strong>on</strong><br />
research.<br />
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7. Improving Product Diversity<br />
In recent years, organic cott<strong>on</strong> use has ascended in merit in developed<br />
countries because <str<strong>on</strong>g>of</str<strong>on</strong>g> human health c<strong>on</strong>cerns. For example, Germany and<br />
o<str<strong>on</strong>g>the</str<strong>on</strong>g>r European countries decelerated to increase organic crop usage. Organic<br />
cott<strong>on</strong> farming can be supplied to <str<strong>on</strong>g>the</str<strong>on</strong>g> farmers’ new expansi<strong>on</strong>s. IDB member<br />
countries must study organic cott<strong>on</strong> producti<strong>on</strong> possibilities. The o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
objective is colored cott<strong>on</strong> producti<strong>on</strong>. New colored varieties can be<br />
developed with higher yield and good quality. At <str<strong>on</strong>g>the</str<strong>on</strong>g> same time, colored<br />
cott<strong>on</strong> will be an important objective in organic cott<strong>on</strong> producti<strong>on</strong>. In Turkey,<br />
projects are c<strong>on</strong>ducted in <str<strong>on</strong>g>the</str<strong>on</strong>g>se two subjects and we are expecting to register a<br />
new colored cott<strong>on</strong> variety in 2005.<br />
8. Cott<strong>on</strong> Research Institute<br />
To achieve <str<strong>on</strong>g>the</str<strong>on</strong>g> above menti<strong>on</strong>ed, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a need to establish a cott<strong>on</strong> research<br />
center or to c<strong>on</strong>vert an existing institute to an internati<strong>on</strong>al cott<strong>on</strong> research<br />
center that will organize and oriented cott<strong>on</strong> studies in IDB member<br />
countries. This is very important for enhancing cott<strong>on</strong> productivity and<br />
internati<strong>on</strong>al competitiveness in IDB cott<strong>on</strong> producing member countries.<br />
The objectives <str<strong>on</strong>g>of</str<strong>on</strong>g> this center are;<br />
• To realize communicati<strong>on</strong> between cott<strong>on</strong> researchers in different<br />
IDB member countries.<br />
• To organize IDB Cott<strong>on</strong> C<strong>on</strong>ferences annually to discus studies and<br />
to share experiences.<br />
• To c<strong>on</strong>stitute a breeding program for different regi<strong>on</strong>s in IDB<br />
member countries to solve problems or improve new varieties with<br />
local institutes.<br />
• To form a technology research laboratory that can be c<strong>on</strong>trolled<br />
easily.<br />
• To establish a germplasm bank to collect elite germplasm from all<br />
countries to maintain and supply it <strong>on</strong> demand to researchers. These<br />
processes (collecti<strong>on</strong> and supply) can be discussed separately.<br />
• To organize an exchange program for researchers for a determined<br />
period to increase <str<strong>on</strong>g>the</str<strong>on</strong>g>ir experiences. This will be useful for sharing<br />
experiences am<strong>on</strong>g IDB member countries.<br />
• To help collective studies between IDB member countries to study<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> performance <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> varieties in different member countries and<br />
also o<str<strong>on</strong>g>the</str<strong>on</strong>g>r working objectives.<br />
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V. CONCLUSION<br />
Turkey has proceeded in cott<strong>on</strong> productivity, with 1428 kg/ha and quality<br />
since 1970. There is no significant problem c<strong>on</strong>cerning yield. Turkish studies,<br />
recently, have been directed to lint quality properties much more than yield.<br />
Never<str<strong>on</strong>g>the</str<strong>on</strong>g>less, due to low market prices during <str<strong>on</strong>g>the</str<strong>on</strong>g> last four years, studies to<br />
improve higher yield varieties have been c<strong>on</strong>tinued. So far, 35 cott<strong>on</strong><br />
varieties have been developed and registered. We can share <str<strong>on</strong>g>the</str<strong>on</strong>g>se varieties<br />
with IDB cott<strong>on</strong> producing member countries. A Cott<strong>on</strong> Research Institute is<br />
<strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> most important and active establishments <str<strong>on</strong>g>of</str<strong>on</strong>g> Turkey. The Cott<strong>on</strong><br />
Research Institute has already completed its substructure in many ways. It has<br />
a phytopathology laboratory, a fiber analysis laboratory, a ginning and<br />
delintati<strong>on</strong> establishment, a genetic stock unit and 20 researchers. Varieties,<br />
developed by <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Research Institute have supplied more significant<br />
advantages to <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s cott<strong>on</strong> sector.<br />
The Cott<strong>on</strong> Research Institute has achieved a rise in IDB cott<strong>on</strong> producing<br />
member countries with its research studies and improved varieties. If IDB<br />
member countries want to enhance producti<strong>on</strong> efficiency and<br />
competitiveness, first <str<strong>on</strong>g>of</str<strong>on</strong>g> all <str<strong>on</strong>g>the</str<strong>on</strong>g>y have to enhance cooperati<strong>on</strong> in all areas. As<br />
a result, IDB cott<strong>on</strong> producing member countries must cooperate am<strong>on</strong>g each<br />
o<str<strong>on</strong>g>the</str<strong>on</strong>g>r to increase communicati<strong>on</strong>, exchange germplasm, improve desirable<br />
varieties, and share technological improvements. In additi<strong>on</strong> to this, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
private sector must be included in this cooperati<strong>on</strong>, too. This is necessary, at<br />
least, to make improved varieties easily available to suitable regi<strong>on</strong>s.<br />
I hope this meeting will be a great opportunity and beginning for IDB<br />
member countries to cooperate am<strong>on</strong>g IDB cott<strong>on</strong> producing countries.<br />
LITERATURE<br />
Harem, E., 2003. Türkiye’de Tescil Edilen Yerli ve Yabancı Pamuk Çeşitleri ve<br />
Özellikleri. İkinci Baskı, Yayın No : 63, Nazilli, 2003.<br />
Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee (ICAC), 2003. World Cott<strong>on</strong> Statistics,<br />
Bulletin <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Internati<strong>on</strong>al Cott<strong>on</strong> Advisory Committee. 1629 K Street, Suit 702,<br />
Washingt<strong>on</strong> DC 20006, USA, September 2003.<br />
Sabit, A.Ö., F. Işın, İ. Akyıldız, P. Nacak, Y. Sokat, E. Sayın. 2004. Pamuk Çalışma<br />
Grubu Raporu. AB Müktesebatına Uyum Kapsamında Türk Pamuk Sektörünün<br />
Durumu ve Yapılması Gerekenler.<br />
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PART THREE<br />
ROLE OF PRODUCTIVITY INSTITUTIONS AND<br />
PRIVATE SECTION IN THE COTTON SECTOR<br />
201
202
ENHANCING THE ROLE OF NATIONAL<br />
INSTITUTIONS<br />
203
204
Executive Summary<br />
PRODUCTIVITY IN COTTON SPINNING:<br />
PAKISTAN’S EXPERIENCE<br />
Saquib Mohyuddn<br />
Chief, Nati<strong>on</strong>al Productivity Organizati<strong>on</strong> &<br />
Amina Mahmood<br />
Research Officer, Nati<strong>on</strong>al Productivity Organizati<strong>on</strong><br />
Formal internati<strong>on</strong>al trade <str<strong>on</strong>g>the</str<strong>on</strong>g>ory tends to assume that <strong>on</strong>ce trade distorti<strong>on</strong>s<br />
are removed, a country’s potential comparative advantage emerges<br />
automatically through <str<strong>on</strong>g>the</str<strong>on</strong>g> workings <str<strong>on</strong>g>of</str<strong>on</strong>g> a well coordinated market system and<br />
a fully developed instituti<strong>on</strong>al framework. The challenge that faces Pakistan’s<br />
textile industry in <str<strong>on</strong>g>the</str<strong>on</strong>g> current c<strong>on</strong>text <str<strong>on</strong>g>of</str<strong>on</strong>g> trade liberalizati<strong>on</strong>, is how our<br />
domestic polices, can best facilitate <str<strong>on</strong>g>the</str<strong>on</strong>g> realisati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> gains from trade<br />
expansi<strong>on</strong> both in terms <str<strong>on</strong>g>of</str<strong>on</strong>g> competitive threats and growth opportunities.<br />
Cott<strong>on</strong> being <str<strong>on</strong>g>the</str<strong>on</strong>g> leading crop <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan makes <str<strong>on</strong>g>the</str<strong>on</strong>g> textile industry <str<strong>on</strong>g>the</str<strong>on</strong>g> most<br />
significant <strong>on</strong>e in <str<strong>on</strong>g>the</str<strong>on</strong>g> country which is best captured by a phalanx <str<strong>on</strong>g>of</str<strong>on</strong>g> figures.<br />
The textile industry accounted for a value additi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> 9 percent <str<strong>on</strong>g>of</str<strong>on</strong>g> GDP in<br />
FY03, has a direct share <str<strong>on</strong>g>of</str<strong>on</strong>g> <strong>on</strong>e-fifth in <str<strong>on</strong>g>the</str<strong>on</strong>g> index <str<strong>on</strong>g>of</str<strong>on</strong>g> large-scale manufacturing<br />
and a 46 percent share in overall manufacturing activity. The industry also<br />
has a 38 percent share in generating employment and c<strong>on</strong>tributes to a share <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
30 percent in world yarn trade and 8 percent in cott<strong>on</strong> cloth, and about 68<br />
percent <str<strong>on</strong>g>of</str<strong>on</strong>g> export earnings with a value <str<strong>on</strong>g>of</str<strong>on</strong>g> around $ 7 billi<strong>on</strong> derived from <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
textile sector al<strong>on</strong>e. Cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> west has underg<strong>on</strong>e massive restructuring<br />
and is becoming more and more capital intensive. As trade in cott<strong>on</strong> and its<br />
allied industry including textiles is liberalised, a highly competitive<br />
envir<strong>on</strong>ment awaits us. The removal <str<strong>on</strong>g>of</str<strong>on</strong>g> quotas will pitch Pakistan into open<br />
competiti<strong>on</strong> with o<str<strong>on</strong>g>the</str<strong>on</strong>g>r exporting countries, <str<strong>on</strong>g>the</str<strong>on</strong>g> impending gain and loss in<br />
market share primarily depends <strong>on</strong> productivity indices and relative<br />
efficiency <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> domestic instituti<strong>on</strong>al framework <str<strong>on</strong>g>of</str<strong>on</strong>g> each country.<br />
A major drawback <str<strong>on</strong>g>of</str<strong>on</strong>g> efficiency in Pakistan is <str<strong>on</strong>g>the</str<strong>on</strong>g> emphasis placed <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
spinning activity in <str<strong>on</strong>g>the</str<strong>on</strong>g> textile sector. An imperative structural weakness <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
our textile industry is <str<strong>on</strong>g>the</str<strong>on</strong>g> export <str<strong>on</strong>g>of</str<strong>on</strong>g> most <str<strong>on</strong>g>of</str<strong>on</strong>g> our good quality yarn to o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
countries, ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than being utilised for producing high value-added products<br />
like fabrics or garments locally. This yarn is imported by countries like Japan,<br />
a major export market for yarn, China, and South Korea. These countries<br />
205
have a well-flourished textile industry to c<strong>on</strong>vert this yarn into high value<br />
added products that fetch much higher prices in <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market. The<br />
stilling disc<strong>on</strong>tent is fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r provided by <str<strong>on</strong>g>the</str<strong>on</strong>g> fact, that <str<strong>on</strong>g>the</str<strong>on</strong>g>se countries do not<br />
grow cott<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g>y have a well-established textile industry because <str<strong>on</strong>g>the</str<strong>on</strong>g>y have<br />
invested in modern manufacturing technology as well as in a qualified and<br />
well-trained work force which greatly enhances <str<strong>on</strong>g>the</str<strong>on</strong>g> productivity <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
textile sector, enabling <str<strong>on</strong>g>the</str<strong>on</strong>g>m to overcome <str<strong>on</strong>g>the</str<strong>on</strong>g> handicap <str<strong>on</strong>g>of</str<strong>on</strong>g> imported yarn. The<br />
new ec<strong>on</strong>omic world order, with deeply integrated global markets will be<br />
increasingly marked with intense competiti<strong>on</strong> and specifically <str<strong>on</strong>g>the</str<strong>on</strong>g> textile<br />
industry will face challenges in <str<strong>on</strong>g>the</str<strong>on</strong>g> development <str<strong>on</strong>g>of</str<strong>on</strong>g> pervasive technology and<br />
communicati<strong>on</strong> networks, massive improvements in internati<strong>on</strong>al logistics<br />
and transportati<strong>on</strong>s, and most <str<strong>on</strong>g>of</str<strong>on</strong>g> all a surmountable impediment in today’s<br />
rapidly growing investment towards human capital and an innovati<strong>on</strong> driven<br />
industry. The task that lies ahead requires stimulati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> policies towards<br />
fostering a highly competitive and productivity enhanced industry focusing<br />
<strong>on</strong> some <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> following issues:<br />
Demand for Market Oriented Strategy: Producers should try to increase<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>ir market power by producing high price fashi<strong>on</strong> clothing according to<br />
current demands, and since apparels and garments provide <str<strong>on</strong>g>the</str<strong>on</strong>g> highest value<br />
added product am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> textile items, maximum focus should be towards<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>se units. Proporti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fibres in our textile products should be<br />
increased especially from <str<strong>on</strong>g>the</str<strong>on</strong>g> export point <str<strong>on</strong>g>of</str<strong>on</strong>g> view, and realising that this<br />
segment is more capital-intensive an increase in technological resources<br />
would be required.<br />
Supply for Market Oriented Strategy: N<strong>on</strong>-price factors <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> supply side<br />
play a crucial role in <str<strong>on</strong>g>the</str<strong>on</strong>g> export performance <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> country and<br />
diversificati<strong>on</strong> is needed in <str<strong>on</strong>g>the</str<strong>on</strong>g> directi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> trade. More than 50 percent <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Pakistan’s exports are directed towards European and North American<br />
markets and given <str<strong>on</strong>g>the</str<strong>on</strong>g>ir technological superiority Pakistan’s textiles would<br />
certainly be at a disadvantage. This is <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> major drawbacks for <str<strong>on</strong>g>the</str<strong>on</strong>g> low<br />
level <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistani exports especially <str<strong>on</strong>g>of</str<strong>on</strong>g> apparels making it worthwhile to<br />
workout new markets in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r parts <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world.<br />
Product Differentiati<strong>on</strong>: Producers should go for product differentiati<strong>on</strong><br />
through <str<strong>on</strong>g>the</str<strong>on</strong>g> promoti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> brand names and advertising and also try to<br />
increase <str<strong>on</strong>g>the</str<strong>on</strong>g> efficiency <str<strong>on</strong>g>of</str<strong>on</strong>g> distributi<strong>on</strong>. With an increase in market power <str<strong>on</strong>g>the</str<strong>on</strong>g>y<br />
can easily transfer rising costs to <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>sumer in <str<strong>on</strong>g>the</str<strong>on</strong>g> form <str<strong>on</strong>g>of</str<strong>on</strong>g> rising prices.<br />
Quality Standards: To survive in a competitive envir<strong>on</strong>ment, we need to<br />
develop modern technology that emphasises <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> finished<br />
206
products. There should be should be an introducti<strong>on</strong> and m<strong>on</strong>itoring <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
global quality standards, ISO 9000 and ISO 14000 in <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> all<br />
textile products.<br />
Value Additi<strong>on</strong>: Instead <str<strong>on</strong>g>of</str<strong>on</strong>g> emphasizing, too much, <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning activity<br />
our industry should focus more <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> fine quality cloth. A<br />
major porti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> good quality yarn should be utilised domestically in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
organised mill sector for <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> high value added fabrics <str<strong>on</strong>g>of</str<strong>on</strong>g> better<br />
quality and later this fabric should be used in <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> garments.<br />
Technological Up-gradati<strong>on</strong>: Investment in more efficient machinery has<br />
become a cliché for this industry, but n<strong>on</strong>e<str<strong>on</strong>g>the</str<strong>on</strong>g>less we still need to put stress<br />
<strong>on</strong> its acute significance towards productivity. Specifically, <str<strong>on</strong>g>the</str<strong>on</strong>g> industry’s<br />
reliance <strong>on</strong> low technology power looms for <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> fabrics should<br />
be reduced and <str<strong>on</strong>g>the</str<strong>on</strong>g> number <str<strong>on</strong>g>of</str<strong>on</strong>g> shuttle less looms should be increased, which<br />
have <str<strong>on</strong>g>the</str<strong>on</strong>g> capacity to produce wider width and superior fabric quality for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
internati<strong>on</strong>al market.<br />
Enhancement <str<strong>on</strong>g>of</str<strong>on</strong>g> Human Capital: The current enhancement in productivity<br />
is mainly due to an increase in capital-output ratios but labour productivity<br />
must also increase to fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r improve <str<strong>on</strong>g>the</str<strong>on</strong>g> overall productivity <str<strong>on</strong>g>of</str<strong>on</strong>g> this sector.<br />
Increasing investment towards improving <str<strong>on</strong>g>the</str<strong>on</strong>g> skill level <str<strong>on</strong>g>of</str<strong>on</strong>g> workers, leads not<br />
<strong>on</strong>ly to a more qualified and efficient work force, but also generates a<br />
“learning by doing” positive externality, which provides <str<strong>on</strong>g>the</str<strong>on</strong>g> much needed<br />
competitively driven comparative advantage.<br />
Infrastructure: A competitive textile industry will require sufficiency in a<br />
well developed infrastructure in terms <str<strong>on</strong>g>of</str<strong>on</strong>g> communicati<strong>on</strong>, services, export<br />
procedures and efficient ports. A natural corollary to infrastructure<br />
development would be <str<strong>on</strong>g>the</str<strong>on</strong>g> establishment <str<strong>on</strong>g>of</str<strong>on</strong>g> clusters leading to centralisati<strong>on</strong><br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> expertise in areas <str<strong>on</strong>g>of</str<strong>on</strong>g> high industrial activity.<br />
Resource <strong>Development</strong>: Pragmatic competitiveness in global trade for<br />
textile would require highly innovative producti<strong>on</strong> techniques which require<br />
investment in research and development <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> textile sector. More efficient<br />
means <str<strong>on</strong>g>of</str<strong>on</strong>g> producing cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> past has mainly focused <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> introducti<strong>on</strong><br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> new seed varieties. What is needed are policies towards <str<strong>on</strong>g>the</str<strong>on</strong>g> development<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> bio-technology and more efficient producti<strong>on</strong> techniques through <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
establishment <str<strong>on</strong>g>of</str<strong>on</strong>g> vocati<strong>on</strong>al and technical learning centres, that c<strong>on</strong>duct<br />
training and research in <str<strong>on</strong>g>the</str<strong>on</strong>g> industry so as to produce cutting edge innovative<br />
soluti<strong>on</strong>s.<br />
207
I. BACKGROUND<br />
With <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>tinuing globalizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> marketplace, productivity remains<br />
inevitably <str<strong>on</strong>g>the</str<strong>on</strong>g> key to competitiveness. The goal <str<strong>on</strong>g>of</str<strong>on</strong>g> ec<strong>on</strong>omic development is a<br />
rising standard <str<strong>on</strong>g>of</str<strong>on</strong>g> living. A nati<strong>on</strong>’s standard <str<strong>on</strong>g>of</str<strong>on</strong>g> living is determined by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
productivity <str<strong>on</strong>g>of</str<strong>on</strong>g> its ec<strong>on</strong>omy, which is a measure <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> value <str<strong>on</strong>g>of</str<strong>on</strong>g> goods and<br />
services produced per unit <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>’s human, capital and natural<br />
resources. For a nati<strong>on</strong> to be prosperous it is its productivity – <str<strong>on</strong>g>the</str<strong>on</strong>g> ability to<br />
produce high quality products and services in support <str<strong>on</strong>g>of</str<strong>on</strong>g> rising wages and<br />
price disparities in <str<strong>on</strong>g>the</str<strong>on</strong>g> l<strong>on</strong>g run. The central challenge <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Nati<strong>on</strong>al<br />
Productivity Organizati<strong>on</strong> towards <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omic development <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan is<br />
to create c<strong>on</strong>ducive envir<strong>on</strong>ments for rapid and sustained productivity<br />
growth. Stable political, legal and instituti<strong>on</strong>al frameworks and sound macroec<strong>on</strong>omic<br />
policies provide <str<strong>on</strong>g>the</str<strong>on</strong>g> bases for improving nati<strong>on</strong>al prosperity.<br />
However, at <str<strong>on</strong>g>the</str<strong>on</strong>g> enterprise level, it is <str<strong>on</strong>g>the</str<strong>on</strong>g> ability <str<strong>on</strong>g>of</str<strong>on</strong>g> firms to create valuable<br />
goods and services in a productive manner so as to ensure maximum returns<br />
<strong>on</strong> capital in line with <str<strong>on</strong>g>the</str<strong>on</strong>g> immense competiti<strong>on</strong> due to market liberalizati<strong>on</strong><br />
in this sector. Ultimately, in this age <str<strong>on</strong>g>of</str<strong>on</strong>g> rapid globalisati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> both markets for<br />
goods and services, it is internati<strong>on</strong>al competitiveness that will finally<br />
determine how far current opportunities are c<strong>on</strong>verted into lasting nati<strong>on</strong>al<br />
benefits and how far potential threats from <str<strong>on</strong>g>the</str<strong>on</strong>g> daunting internati<strong>on</strong>al<br />
competiti<strong>on</strong> will result in ec<strong>on</strong>omic costs for developing countries.<br />
The ec<strong>on</strong>omy <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan is at an important crossroads today, with prospects<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> chalking up real GDP growth close to an impressive 7 percent this year<br />
and with <str<strong>on</strong>g>the</str<strong>on</strong>g> end <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al textile and clothing regime <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
agricultural sector must work in tandem with <str<strong>on</strong>g>the</str<strong>on</strong>g> fast performing<br />
manufacturing sector to ensure maximum utilizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> dwindling<br />
comparative advantage. The specific case examined here is cott<strong>on</strong> and cott<strong>on</strong><br />
products, which toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r c<strong>on</strong>stitutes <str<strong>on</strong>g>the</str<strong>on</strong>g> largest and most important ec<strong>on</strong>omic<br />
sector in Pakistan, with c<strong>on</strong>siderable trade exposure at every stage <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
producti<strong>on</strong>. It is a global activity involving ec<strong>on</strong>omic and political interests<br />
around <str<strong>on</strong>g>the</str<strong>on</strong>g> globe and has l<strong>on</strong>g been <str<strong>on</strong>g>the</str<strong>on</strong>g> subject <str<strong>on</strong>g>of</str<strong>on</strong>g> North-South trade<br />
negotiati<strong>on</strong>s.<br />
Cott<strong>on</strong> being <str<strong>on</strong>g>the</str<strong>on</strong>g> leading crop <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan makes <str<strong>on</strong>g>the</str<strong>on</strong>g> textile industry <str<strong>on</strong>g>the</str<strong>on</strong>g> most<br />
significant <strong>on</strong>e in <str<strong>on</strong>g>the</str<strong>on</strong>g> country which is best captured by a phalanx <str<strong>on</strong>g>of</str<strong>on</strong>g> figures.<br />
The textile industry accounted for a value additi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> 9 percent <str<strong>on</strong>g>of</str<strong>on</strong>g> GDP in<br />
FY03, has a direct share <str<strong>on</strong>g>of</str<strong>on</strong>g> <strong>on</strong>e-fifth in <str<strong>on</strong>g>the</str<strong>on</strong>g> index <str<strong>on</strong>g>of</str<strong>on</strong>g> large-scale manufacturing<br />
and a 46 percent share in overall manufacturing activity. The industry also<br />
has a 38 percent share in generating employment and c<strong>on</strong>tributes to a share <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
30 percent in world yarn trade and 8 percent in cott<strong>on</strong> cloth, and about 68<br />
208
percent <str<strong>on</strong>g>of</str<strong>on</strong>g> export earnings with a value <str<strong>on</strong>g>of</str<strong>on</strong>g> around $ 7 billi<strong>on</strong> derived from <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
textile sector al<strong>on</strong>e.<br />
The growth targets <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> government focus <strong>on</strong> value added products and is<br />
expected to increase its c<strong>on</strong>sumpti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> to 17 milli<strong>on</strong> bales and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
spinning sector is expected to grow at a rate <str<strong>on</strong>g>of</str<strong>on</strong>g> 6 percent. This calls for<br />
c<strong>on</strong>tinual productivity enhancement at a greater pace for <str<strong>on</strong>g>the</str<strong>on</strong>g> enterprise level<br />
and better functi<strong>on</strong>ing <str<strong>on</strong>g>of</str<strong>on</strong>g> downstream activities to ensure sufficient value<br />
additi<strong>on</strong>. The ec<strong>on</strong>omy has an overwhelming reliance <strong>on</strong> cott<strong>on</strong> in general<br />
and <str<strong>on</strong>g>the</str<strong>on</strong>g> textile sector specifically which itself c<strong>on</strong>tributes significantly for<br />
value additi<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> GDP. Since <str<strong>on</strong>g>the</str<strong>on</strong>g> textile sector largely remains cott<strong>on</strong><br />
based, despite an increasing trend towards syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic and blended fabrics,<br />
interventi<strong>on</strong>s must be focused <strong>on</strong> building a competitive strength through<br />
greater productivity enhancement efforts if <str<strong>on</strong>g>the</str<strong>on</strong>g> textile and apparel industries<br />
are to c<strong>on</strong>tinue to sustain <str<strong>on</strong>g>the</str<strong>on</strong>g>ir c<strong>on</strong>tributi<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al ec<strong>on</strong>omy.<br />
II. OBJECTIVES<br />
In order to tap <str<strong>on</strong>g>the</str<strong>on</strong>g> immense opportunities available from world trade, an<br />
increase in overall productivity in labour, technology and innovati<strong>on</strong> is<br />
intrinsic to create <str<strong>on</strong>g>the</str<strong>on</strong>g> ripple effect, to give a competitive edge to <str<strong>on</strong>g>the</str<strong>on</strong>g> industry.<br />
To quote <str<strong>on</strong>g>the</str<strong>on</strong>g> Total Factor Productivity Growth (growth in real GDP per unit<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> labour and capital combined) for Pakistan stands at -0.19 percent, Korea<br />
2.02 percent and India 3.06 percent is just <str<strong>on</strong>g>the</str<strong>on</strong>g> tip <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> iceberg in <str<strong>on</strong>g>the</str<strong>on</strong>g> algebra<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> growth indices. The extraordinary growth achieved by H<strong>on</strong>g K<strong>on</strong>g, South<br />
Korea and now mainland China depends <strong>on</strong> more than anything else <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
ability <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>se countries to exploit <str<strong>on</strong>g>the</str<strong>on</strong>g> shifting comparative advantage in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
world textile and clothing industry. Low wages al<strong>on</strong>e cannot guarantee a cost<br />
advantage in textile producti<strong>on</strong>. Pakistan retrospectively has had <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
advantage <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> and labour, but <str<strong>on</strong>g>the</str<strong>on</strong>g> textile industry still c<strong>on</strong>tinues to<br />
suffer due to lack <str<strong>on</strong>g>of</str<strong>on</strong>g> competitiveness in <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market.<br />
Competitiveness means <str<strong>on</strong>g>the</str<strong>on</strong>g> ability to compete with firms at <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al<br />
fr<strong>on</strong>tier <str<strong>on</strong>g>of</str<strong>on</strong>g> best practise. Rapid technical change, shrinking ec<strong>on</strong>omic<br />
distance, new forms <str<strong>on</strong>g>of</str<strong>on</strong>g> industrial organizati<strong>on</strong>, tighter links between nati<strong>on</strong>al<br />
value chains and widespread policy liberalizati<strong>on</strong> are all altering radically <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
envir<strong>on</strong>ment facing developing country enterprises. Competiti<strong>on</strong> now arises<br />
with great intensity from practically anywhere in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. To compete,<br />
enterprises must use new technologies and organizati<strong>on</strong>al methods at best<br />
practice, and link up to global value chains. Hence competitiveness is about<br />
productivity which in turn is a functi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> factors related to <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
209
products as well as those related to n<strong>on</strong>-price factors such as delivery<br />
schedules, reliability <str<strong>on</strong>g>of</str<strong>on</strong>g> producers and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r intangible factors like image <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> country/company and brand equity. Thus a product is export competitive<br />
if:<br />
• Growth rate in unit value <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> product exported from Pakistan<br />
exceeds <str<strong>on</strong>g>the</str<strong>on</strong>g> average growth rate in unit value <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> product from<br />
all suppliers in world market<br />
• The market share <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistani export grows.<br />
The project sets as an objective <str<strong>on</strong>g>the</str<strong>on</strong>g> examinati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> strategic problems<br />
facing <str<strong>on</strong>g>the</str<strong>on</strong>g> target countries and outlining <str<strong>on</strong>g>the</str<strong>on</strong>g> opportunities for promising<br />
prospects. The study will focus <strong>on</strong> government policies influencing patterns<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> development and <str<strong>on</strong>g>the</str<strong>on</strong>g> adopti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> technology, farm-level productivity and<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> efficiency and effectiveness <str<strong>on</strong>g>of</str<strong>on</strong>g> processing and marketing operati<strong>on</strong>s. In<br />
this regard, case studies <str<strong>on</strong>g>of</str<strong>on</strong>g> technical and instituti<strong>on</strong>al Nati<strong>on</strong>al Productivity<br />
Organizati<strong>on</strong> has focused <strong>on</strong> productivity gains in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> and textiles<br />
sector. Initiating gains in Productivity imply a more efficient and effective<br />
process <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> leading to lower prices <str<strong>on</strong>g>of</str<strong>on</strong>g> goods and services.<br />
Productivity improvement decreases producti<strong>on</strong> cost per unit which may<br />
c<strong>on</strong>tribute to <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>sumers in terms <str<strong>on</strong>g>of</str<strong>on</strong>g> lower prices and more goods and<br />
services at better quality. As <str<strong>on</strong>g>the</str<strong>on</strong>g> level <str<strong>on</strong>g>of</str<strong>on</strong>g> productivity rises, outputs become<br />
more competitive, both in terms <str<strong>on</strong>g>of</str<strong>on</strong>g> quantity and quality. Thus, better quality<br />
goods and services are made available to <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>sumers. Realizing <str<strong>on</strong>g>the</str<strong>on</strong>g>se<br />
objectives <str<strong>on</strong>g>the</str<strong>on</strong>g> Nati<strong>on</strong>al Productivity Organizati<strong>on</strong> has pi<strong>on</strong>eered <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
following programs:<br />
• Benchmarking in Cott<strong>on</strong> Spinning - Identificati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> 80 Best<br />
Practices<br />
• Cluster <strong>Development</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Weaving Sector<br />
• Productivity and Quality Enhancement <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Weaving<br />
Sector- Technical Up gradati<strong>on</strong><br />
• Khaddi Associati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan (KAP)- developing <str<strong>on</strong>g>of</str<strong>on</strong>g> handloom<br />
weaving industry<br />
• Developing Role Model Companies – Leisure Textiles to enhance<br />
maximum value additi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>.<br />
210
To support <str<strong>on</strong>g>the</str<strong>on</strong>g>se exercises <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Nati<strong>on</strong>al Productivity Organizati<strong>on</strong> (NPO),<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> organizati<strong>on</strong> has various departments that c<strong>on</strong>duct research, support<br />
services and training for <str<strong>on</strong>g>the</str<strong>on</strong>g> capacity building <str<strong>on</strong>g>of</str<strong>on</strong>g> its sectoral initiatives<br />
enabling maximum value creati<strong>on</strong> and a significant multiplier effect for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
industry c<strong>on</strong>solidated with <str<strong>on</strong>g>the</str<strong>on</strong>g> objectives <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Government <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan.<br />
Thus <str<strong>on</strong>g>the</str<strong>on</strong>g> objectives <str<strong>on</strong>g>of</str<strong>on</strong>g> NPO are as follows:<br />
• To promote a holistic and dynamic process through which local<br />
people will c<strong>on</strong>tinuously improve <str<strong>on</strong>g>the</str<strong>on</strong>g>ir productivity,<br />
• The quality <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir lives through efficient and sustainable<br />
utilizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> internal and external resources,<br />
• Knowledge sharing,<br />
• Leveraging each o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs capabilities.<br />
� Training and<br />
Skill<br />
<strong>Development</strong><br />
� C<strong>on</strong>sultancy<br />
Service<br />
� Innovati<strong>on</strong> and<br />
Quality Center<br />
Training and C<strong>on</strong>sultancy<br />
<str<strong>on</strong>g>Group</str<strong>on</strong>g><br />
211<br />
Research <str<strong>on</strong>g>Group</str<strong>on</strong>g><br />
� Research and Knowledge Sharing<br />
� Integrated Community <strong>Development</strong><br />
� <strong>Development</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Best Practice Network<br />
� Benchmarking (Cott<strong>on</strong> Spinning and Weaving<br />
Higher<br />
Productivity and<br />
Value Creati<strong>on</strong><br />
� Productivity Promoti<strong>on</strong><br />
� Implementati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> APO<br />
Programs in Pakistan<br />
� President Productivity<br />
Awards<br />
Business<br />
<strong>Development</strong> and<br />
Support Services
Social and ec<strong>on</strong>omic development means bringing a better future to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
people. The ultimate goal <str<strong>on</strong>g>of</str<strong>on</strong>g> productivity improvement as a driving force <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
ec<strong>on</strong>omic development is to improve <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> life <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> people. This is<br />
a key factor that enables society to generate value added through an optimal<br />
mix <str<strong>on</strong>g>of</str<strong>on</strong>g> available resources-human knowledge and skills, technology,<br />
equipment, raw materials, energy, capital and intermediary services. Its<br />
growth c<strong>on</strong>tributes towards <str<strong>on</strong>g>the</str<strong>on</strong>g> prosperity <str<strong>on</strong>g>of</str<strong>on</strong>g> nati<strong>on</strong>s, makes companies<br />
competitive in <str<strong>on</strong>g>the</str<strong>on</strong>g> global market, and thus c<strong>on</strong>tributes to <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> life.<br />
III. OUTLOOK OF COTTON SECTOR IN PAKISTAN<br />
Pakistan stands at number four in <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s cott<strong>on</strong> yarn producti<strong>on</strong> with an<br />
8% share. Its producti<strong>on</strong> has grown at an average rate <str<strong>on</strong>g>of</str<strong>on</strong>g> 4.9% from 1990 to<br />
1999. This growth figure when compared to <str<strong>on</strong>g>the</str<strong>on</strong>g> global yarn producti<strong>on</strong><br />
growth rate <str<strong>on</strong>g>of</str<strong>on</strong>g> 0.53% is very substantive. Pakistan’s spinning industry<br />
manufactures all counts <str<strong>on</strong>g>of</str<strong>on</strong>g> yarn but traditi<strong>on</strong>ally, <str<strong>on</strong>g>the</str<strong>on</strong>g> product mix is highly<br />
tilted towards low value added yarns. Yarn producti<strong>on</strong> for <str<strong>on</strong>g>the</str<strong>on</strong>g> year 1999<br />
shows about 70% <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan’s yarn producti<strong>on</strong> in coarse (47%) and medium<br />
(27%) counts. Fine and super fine accounted <strong>on</strong>ly 3% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> total producti<strong>on</strong>.<br />
In Pakistan, <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector exhibits c<strong>on</strong>siderable diversity in terms <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
virtually every characteristic: unit size, formality <str<strong>on</strong>g>of</str<strong>on</strong>g> industrial structure,<br />
nature <str<strong>on</strong>g>of</str<strong>on</strong>g> competiti<strong>on</strong>, and underlying cultural and governance systems. At<br />
<strong>on</strong>e extreme are 1.3 milli<strong>on</strong> cott<strong>on</strong> farms (<str<strong>on</strong>g>of</str<strong>on</strong>g> which roughly half are smaller<br />
than 2 hectares) competing in almost classic perfect competiti<strong>on</strong>, a<br />
vast majority operated as family farms by owners/ cultivators with limited<br />
literacy or access to technology.<br />
With a record cott<strong>on</strong> crop <str<strong>on</strong>g>of</str<strong>on</strong>g> over 13 milli<strong>on</strong> bales in <str<strong>on</strong>g>the</str<strong>on</strong>g> current seas<strong>on</strong> and<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> “excess” producti<strong>on</strong> over and above <str<strong>on</strong>g>the</str<strong>on</strong>g> <str<strong>on</strong>g>of</str<strong>on</strong>g>ficial target by 2 to 3 milli<strong>on</strong><br />
bales, real GDP is expected to grow by at least 70 to 80 points. The ec<strong>on</strong>omy<br />
was likely to experience an accelerati<strong>on</strong> in growth, with an unexpected<br />
bounce in agriculture providing greater-than-anticipated uplift since cott<strong>on</strong><br />
c<strong>on</strong>stitutes a large share in Pakistan’s still dominant agricultural sector fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
elucidated by <str<strong>on</strong>g>the</str<strong>on</strong>g> figures below. In both <str<strong>on</strong>g>the</str<strong>on</strong>g> graphs we can observe that <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
relati<strong>on</strong>ship <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> agricultural growth rate and GDP growth rate shows a<br />
str<strong>on</strong>g positive relati<strong>on</strong>ship as seen in Figure1. Though, <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>trary<br />
agricultural cott<strong>on</strong> producti<strong>on</strong> (cott<strong>on</strong> producti<strong>on</strong> from <str<strong>on</strong>g>the</str<strong>on</strong>g> farming sector<br />
without value additi<strong>on</strong>) shows a lesser degree <str<strong>on</strong>g>of</str<strong>on</strong>g> correlati<strong>on</strong>, hence <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
smaller correlati<strong>on</strong> coefficient <str<strong>on</strong>g>of</str<strong>on</strong>g> 0.133 and 0.655 <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
agricultural sector respectively.<br />
212
Figure 1<br />
Agricultural Growth Rate and GDP<br />
Agricultural Growth Rate and GDP<br />
Growth Rate<br />
Growth Rate<br />
15<br />
15<br />
10<br />
10<br />
5<br />
5<br />
0<br />
0<br />
0<br />
-5 0<br />
-5<br />
-10<br />
-10<br />
2<br />
2<br />
4<br />
4<br />
6<br />
6<br />
8<br />
8<br />
10<br />
10<br />
GDP Growth Rate Linear (GDP Growth Rate)<br />
GDP Growth Rate Linear (GDP Growth Rate)<br />
Figure 2<br />
Agricultural Cott<strong>on</strong> Producti<strong>on</strong> and<br />
Agricultural Cott<strong>on</strong> Producti<strong>on</strong> and<br />
GDP growth rate<br />
GDP growth rate<br />
14<br />
12<br />
14<br />
10<br />
12<br />
8<br />
10<br />
6<br />
8<br />
4<br />
6<br />
2<br />
4<br />
0<br />
2<br />
0<br />
0 2 4 6 8 10<br />
0 2 4 6 8 10<br />
GDP Growth Rate Linear (GDP Growth Rate)<br />
GDP Growth Rate Linear (GDP Growth Rate)<br />
The value <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> depends, to a great extent, <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>diti<strong>on</strong> and quality <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> fiber. Better quality enhances price and makes <str<strong>on</strong>g>the</str<strong>on</strong>g> crop more marketable.<br />
Quality cott<strong>on</strong> has str<strong>on</strong>g advantages to textile manufacturers. High speed<br />
spinning equipment requires quality fiber for higher quality end products.<br />
Effective harvest aid chemicals help in getting a head start <strong>on</strong> harvest. Mature<br />
cott<strong>on</strong>, harvested as early as possible, ensures better quality over cott<strong>on</strong> that<br />
remains open and subject to wea<str<strong>on</strong>g>the</str<strong>on</strong>g>r-related deteriorati<strong>on</strong>. Domestic textile<br />
mill use <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> would likely increase substantially with favorable producer<br />
price incentives for <str<strong>on</strong>g>the</str<strong>on</strong>g> qualities that improve mill performance. The more<br />
desirable spinning properties pave <str<strong>on</strong>g>the</str<strong>on</strong>g> way for a more productive, competitive<br />
and pr<str<strong>on</strong>g>of</str<strong>on</strong>g>itable textile industry. C<strong>on</strong>sidering <str<strong>on</strong>g>the</str<strong>on</strong>g> figures below from Table 1,<br />
<strong>on</strong>e can easily infer that <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> should be <str<strong>on</strong>g>of</str<strong>on</strong>g> paramount<br />
213
importance to all developing countries. Since <str<strong>on</strong>g>the</str<strong>on</strong>g> fragile ec<strong>on</strong>omies <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
developing countries must rely <strong>on</strong> value additi<strong>on</strong> for sustainable<br />
development it has become absolutely essential for countries like Pakistan<br />
that possess a comparative advantage in cott<strong>on</strong> producti<strong>on</strong> to cash in <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
pr<str<strong>on</strong>g>of</str<strong>on</strong>g>its from <str<strong>on</strong>g>the</str<strong>on</strong>g> value additi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> this agricultural produce.<br />
Table 1. Value <str<strong>on</strong>g>of</str<strong>on</strong>g> One Bale <str<strong>on</strong>g>of</str<strong>on</strong>g> 170 Kg <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong><br />
C<strong>on</strong>clusively after examining <str<strong>on</strong>g>the</str<strong>on</strong>g> value added figures from <str<strong>on</strong>g>the</str<strong>on</strong>g> price <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong><br />
and its associated products <strong>on</strong>e can easily make <str<strong>on</strong>g>the</str<strong>on</strong>g> logical inference that <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
textile industry is <str<strong>on</strong>g>the</str<strong>on</strong>g> most important industrial sub-sector in Pakistan. Being<br />
based <strong>on</strong> locally available raw cott<strong>on</strong>, providing <str<strong>on</strong>g>the</str<strong>on</strong>g> largest employment to<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> industrial labour force and also <str<strong>on</strong>g>the</str<strong>on</strong>g> largest foreign exchange earner it<br />
should be most sensitive to cott<strong>on</strong> producti<strong>on</strong>. Global textile and clothing<br />
trade has underg<strong>on</strong>e significant changes in <str<strong>on</strong>g>the</str<strong>on</strong>g> last decade. Clothing trade has<br />
grown at a faster rate as compared to textile trade. The textile trade increased<br />
from $150 billi<strong>on</strong> to $155 billi<strong>on</strong> in an eight year period from 1990-98, while<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> clothing trade has grown from $97 billi<strong>on</strong> to $177 billi<strong>on</strong> over <str<strong>on</strong>g>the</str<strong>on</strong>g> same<br />
period <str<strong>on</strong>g>of</str<strong>on</strong>g> time. Textile trade indicates an obvious shift from basic textiles<br />
towards high value added products including apparel and clothing articles.<br />
Today, textiles have a demand <str<strong>on</strong>g>of</str<strong>on</strong>g> around $ 18 trilli<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. Textile<br />
fibres are divided into three basic types according to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir source:<br />
• Cott<strong>on</strong> Fibre<br />
• Manmade Fibre<br />
• Wool<br />
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Nowadays, man made fibres have dominance in world fibre c<strong>on</strong>sumpti<strong>on</strong>.<br />
Manmade fibres include polyester, acrylic, nyl<strong>on</strong>, ray<strong>on</strong> and viscose.<br />
Polyester has by far <str<strong>on</strong>g>the</str<strong>on</strong>g> largest share <str<strong>on</strong>g>of</str<strong>on</strong>g> manmade fibres. Textile producti<strong>on</strong> is<br />
comprised <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> following categories:<br />
Cott<strong>on</strong> ginning Cott<strong>on</strong> yarn Cott<strong>on</strong> fabric<br />
Fabric processing Home textiles Towels<br />
Hosiery & knitwear Readymade garments<br />
The main determinant <str<strong>on</strong>g>of</str<strong>on</strong>g> technological change in this sector is <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
governmental system <str<strong>on</strong>g>of</str<strong>on</strong>g> research and extensi<strong>on</strong>--which has become quite<br />
ineffective over time. At <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r extreme are large scale textile processors<br />
and small scale garment manufacturers, both subject to <str<strong>on</strong>g>the</str<strong>on</strong>g> influence <str<strong>on</strong>g>of</str<strong>on</strong>g> large<br />
internati<strong>on</strong>al corporati<strong>on</strong>s, and indeed a part <str<strong>on</strong>g>of</str<strong>on</strong>g> an internati<strong>on</strong>ally governed<br />
commodity chain. In <str<strong>on</strong>g>the</str<strong>on</strong>g> middle are large scale spinning units and smallscale,<br />
informal sector weaving units, <str<strong>on</strong>g>the</str<strong>on</strong>g> latter numbering in <str<strong>on</strong>g>the</str<strong>on</strong>g> tens <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
thousands, mostly operating as family enterprises, with virtually<br />
no recognized system <str<strong>on</strong>g>of</str<strong>on</strong>g> industrial governance. It would usher well for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
textile industry which now has a bigger appetite for cott<strong>on</strong> c<strong>on</strong>sumpti<strong>on</strong> than<br />
in past years to meet higher world demand under quota free era.<br />
If we look at <str<strong>on</strong>g>the</str<strong>on</strong>g> growth rates <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Yarn and Cott<strong>on</strong> Cloth with respect<br />
to an increase in GDP according to Figures 6 and 7 below we observe an<br />
indirect relati<strong>on</strong>ship while <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>trary agricultural cott<strong>on</strong> producti<strong>on</strong> and<br />
agricultural growth rate shows a positive trend showing <str<strong>on</strong>g>the</str<strong>on</strong>g> importance <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
cott<strong>on</strong> for agriculture as well as GDP as in Figure 2. An interesting fact that<br />
arises from <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>jecture is that according to Figure 4 and 5 agricultural<br />
cott<strong>on</strong> producti<strong>on</strong> in relati<strong>on</strong> to both cott<strong>on</strong> yarn and cott<strong>on</strong> cloth shows a<br />
positive trend. These deducti<strong>on</strong>s hence c<strong>on</strong>clude that <str<strong>on</strong>g>the</str<strong>on</strong>g> comparative<br />
advantage Pakistan possesses in cott<strong>on</strong> producti<strong>on</strong> and abundance <str<strong>on</strong>g>of</str<strong>on</strong>g> raw<br />
material for textiles including cheap labour is not translated into cost<br />
competitiveness in <str<strong>on</strong>g>the</str<strong>on</strong>g> textile industry as a whole. This lack <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
competitiveness results in low value additi<strong>on</strong> to GDP <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> related<br />
products. This relati<strong>on</strong>ship is fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r streng<str<strong>on</strong>g>the</str<strong>on</strong>g>ned from <str<strong>on</strong>g>the</str<strong>on</strong>g> figures available<br />
from <str<strong>on</strong>g>the</str<strong>on</strong>g> Asian <strong>Development</strong> Bank study as show below in Figure 8.<br />
215
Figure 3<br />
Agricultural Cott<strong>on</strong> Producti<strong>on</strong> and<br />
Agricultural Growth Rate<br />
15 15<br />
10 10<br />
5<br />
0<br />
-10 -10 -5 -5 0 5 10 10 15 15<br />
Agricultural Growth Rate Rate<br />
Linear (Agricultural Growth Rate)<br />
Figure 4<br />
Agricultural Cott<strong>on</strong> Producti<strong>on</strong> and<br />
Cott<strong>on</strong> Yarn Producti<strong>on</strong><br />
2000<br />
1500<br />
1000<br />
500 500<br />
0<br />
0 5 10 10 15 15<br />
Agricultural Cott<strong>on</strong> Growth Rate<br />
Linear (Agricultural Cott<strong>on</strong> Growth Rate)<br />
Figure 5<br />
Agricultural Cott<strong>on</strong> Producti<strong>on</strong> and<br />
Cott<strong>on</strong> Cloth Producti<strong>on</strong><br />
700 700<br />
600 600<br />
500 500<br />
400 400<br />
300 300<br />
200 200<br />
100 100<br />
0<br />
0 5 10 10 15 15<br />
Series1 Linear (Series1)<br />
216
2000 2000<br />
1500 1500<br />
1000 1000<br />
500 500<br />
Figure 6<br />
Cott<strong>on</strong> Yarn and GDP growth<br />
0<br />
0 2 4 6 8 10 10<br />
GDP GDP growth growth rate rate Linear Linear (GDP (GDP growth growth rate rate ) )<br />
Figure 7<br />
Cott<strong>on</strong> Cloth and GDP growth<br />
700 700<br />
600 600<br />
500 500<br />
400 400<br />
300 300<br />
200 200<br />
100 100<br />
0<br />
0 2 4 6 8 10 10<br />
Series1 Series1 Linear Linear (Series1) (Series1)<br />
Figure 8: Values <str<strong>on</strong>g>of</str<strong>on</strong>g> Textile and Clothing Exports ($ Milli<strong>on</strong>)<br />
217
Figure 9: Growth Rate <str<strong>on</strong>g>of</str<strong>on</strong>g> Textiles and Clothing Exports (% per annum )<br />
Figure 10: Share <str<strong>on</strong>g>of</str<strong>on</strong>g> Textiles and Clothing in Total Exports (% per annum)<br />
We can easily see from <str<strong>on</strong>g>the</str<strong>on</strong>g> above graphs that Pakistan is faring low <strong>on</strong> value<br />
additi<strong>on</strong> to GDP with respect to cott<strong>on</strong> products. It is <str<strong>on</strong>g>the</str<strong>on</strong>g>refore imperative<br />
that steps are taken to improve <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> process by investing in<br />
technology, human resource development, training, research, and testing<br />
laboratories. Producti<strong>on</strong> inefficiencies arising out <str<strong>on</strong>g>of</str<strong>on</strong>g> poorly trained labour,<br />
weak management and supervisi<strong>on</strong> systems, high wastage levels and low per<br />
capita productivity also accounts for <str<strong>on</strong>g>the</str<strong>on</strong>g> high costs <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> in Pakistan.<br />
According to <str<strong>on</strong>g>the</str<strong>on</strong>g> World Bank, Pakistan’s textile sector will have to improve<br />
its productivity by 63% to reach <str<strong>on</strong>g>the</str<strong>on</strong>g> productivity levels <str<strong>on</strong>g>of</str<strong>on</strong>g> China, <str<strong>on</strong>g>the</str<strong>on</strong>g> latter<br />
being treated as a benchmark. Due to low investment by <str<strong>on</strong>g>the</str<strong>on</strong>g> government in<br />
218
human resource development, <str<strong>on</strong>g>the</str<strong>on</strong>g> absorpti<strong>on</strong> capacity for technology is poor<br />
at all strata <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> pers<strong>on</strong>nel. There is a dearth in <str<strong>on</strong>g>the</str<strong>on</strong>g> number and<br />
quality <str<strong>on</strong>g>of</str<strong>on</strong>g> training Institutes for <str<strong>on</strong>g>the</str<strong>on</strong>g> textile and garments sector. Additi<strong>on</strong>ally,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>re is a shortage <str<strong>on</strong>g>of</str<strong>on</strong>g> trained textile technologist in <str<strong>on</strong>g>the</str<strong>on</strong>g> country. The textile<br />
industry requires about 12,750 textile graduates per annum as against <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
current supply <str<strong>on</strong>g>of</str<strong>on</strong>g> about 7,950. The shortage works out to be 4,800 per annum<br />
similarly; <str<strong>on</strong>g>the</str<strong>on</strong>g> wastage percentage in producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> garments in Pakistan<br />
varies from 20-35% -levels that are unacceptable in competitor countries.<br />
For developing countries in general and Pakistan in particular <str<strong>on</strong>g>the</str<strong>on</strong>g> main<br />
drivers for competitiveness are human resources, technological effort,<br />
technology inflows and supporting instituti<strong>on</strong>s. Pakistan has a weak base for<br />
building competitive capabilities, and it is not improving over time in<br />
resp<strong>on</strong>se to growing internati<strong>on</strong>al challenges. Its l<strong>on</strong>g experience in textiles<br />
and clothing seems to have given it an adequate competitive base in <str<strong>on</strong>g>the</str<strong>on</strong>g>se<br />
activities, but even here new niche markets need to be sought out to keep<br />
pace with internati<strong>on</strong>al competiti<strong>on</strong>.<br />
The base <str<strong>on</strong>g>of</str<strong>on</strong>g> skills and capabilities in essentially low and stable technologies<br />
may not, in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r words, allow Pakistan to diversify into <str<strong>on</strong>g>the</str<strong>on</strong>g> more dynamic<br />
and complex activities that are <str<strong>on</strong>g>the</str<strong>on</strong>g> new engines <str<strong>on</strong>g>of</str<strong>on</strong>g> export growth in <str<strong>on</strong>g>the</str<strong>on</strong>g> global<br />
ec<strong>on</strong>omy. And <str<strong>on</strong>g>the</str<strong>on</strong>g> base may not be sufficient to attract foreign capital and<br />
technology into export-oriented activities in competiti<strong>on</strong> with many o<str<strong>on</strong>g>the</str<strong>on</strong>g>r low<br />
wage ec<strong>on</strong>omies that are vying for similar investments.Essential background<br />
to <str<strong>on</strong>g>the</str<strong>on</strong>g> development <str<strong>on</strong>g>of</str<strong>on</strong>g> such a l<strong>on</strong>g-term perspective is benchmarking <str<strong>on</strong>g>of</str<strong>on</strong>g> an<br />
ec<strong>on</strong>omy's current competitive strengths and weaknesses. Benchmarks have<br />
to be qualitative: comparis<strong>on</strong> with best practice in <str<strong>on</strong>g>the</str<strong>on</strong>g> comparators. This is<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> procedure comm<strong>on</strong>ly used in competitiveness strategy analysis<br />
throughout <str<strong>on</strong>g>the</str<strong>on</strong>g> developed and newly industrialized countries (Lall, 2001.).<br />
NPO has launched <str<strong>on</strong>g>the</str<strong>on</strong>g> Benchmarking in <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Spinning Sector to enable<br />
more value additi<strong>on</strong> and competitiveness for Pakistan’s cott<strong>on</strong> industry. We<br />
hope this would lead to pr<str<strong>on</strong>g>of</str<strong>on</strong>g>it maximizati<strong>on</strong> and a larger c<strong>on</strong>tributi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
textiles and cott<strong>on</strong> products for <str<strong>on</strong>g>the</str<strong>on</strong>g> GDP.<br />
During <str<strong>on</strong>g>the</str<strong>on</strong>g> last four years Pakistan strived hard to accelerate its growth rate <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
clothing and textiles far in excess <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world growth rate. In <str<strong>on</strong>g>the</str<strong>on</strong>g>1990s<br />
textile trade grew at an average rate <str<strong>on</strong>g>of</str<strong>on</strong>g> 4 percent and clothing 6 percent.<br />
Clothing trade’s share in total textile and clothing is 56 percent. Within this<br />
group <str<strong>on</strong>g>the</str<strong>on</strong>g> relative share <str<strong>on</strong>g>of</str<strong>on</strong>g> clothing exports should rise even more rapidly.<br />
This is exactly what has been d<strong>on</strong>e. There has been a reversal <str<strong>on</strong>g>of</str<strong>on</strong>g> shares<br />
219
etween cott<strong>on</strong> innovati<strong>on</strong>s which had an impact <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> competitiveness and<br />
pr<str<strong>on</strong>g>of</str<strong>on</strong>g>itability <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> and processing as explained above.<br />
One <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> soluti<strong>on</strong>s as menti<strong>on</strong>ed before was to have a more productive<br />
spinning sector. During <str<strong>on</strong>g>the</str<strong>on</strong>g> last decade <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning industry went through<br />
serious operati<strong>on</strong>al problems due to <str<strong>on</strong>g>the</str<strong>on</strong>g> increased cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong>. This<br />
had a negative impact <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> replacement and modernizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> technology<br />
installed. Hence, <str<strong>on</strong>g>the</str<strong>on</strong>g> overall productivity <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> mills and quality <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> yarn<br />
deteriorated. Today, most <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> mills are not equipped with modern<br />
machines and are <str<strong>on</strong>g>the</str<strong>on</strong>g>refore handicapped and unable to produce yarn <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
required quality at competitive prices.<br />
Keeping in view <str<strong>on</strong>g>the</str<strong>on</strong>g> forthcoming challenges <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> free global trade regime, a<br />
number <str<strong>on</strong>g>of</str<strong>on</strong>g> large textile groups have embarked up<strong>on</strong> modernizati<strong>on</strong> programs.<br />
The spinning sector comprises 445 spinning mills in <str<strong>on</strong>g>the</str<strong>on</strong>g> country (50<br />
composite and 395 spinning units) with 8.6 milli<strong>on</strong> spindles and 145<br />
thousand rotors installed. Out <str<strong>on</strong>g>of</str<strong>on</strong>g> this, presently 7.2 milli<strong>on</strong> spindles and 64<br />
thousand rotors are in operati<strong>on</strong>. The capacity utilizati<strong>on</strong> has stagnated at<br />
87% in spindles and 45% in rotors. Formerly, spinning units were based <strong>on</strong><br />
Chinese/Japanese machinery, being cost-effective. Now a number <str<strong>on</strong>g>of</str<strong>on</strong>g> mills are<br />
shifting to German technologies. Pakistan has so far invested US$ 400<br />
milli<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> replacement <str<strong>on</strong>g>of</str<strong>on</strong>g> machinery and ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r U$$ 500 milli<strong>on</strong> is in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> pipeline.<br />
The government has also allowed duty-free imports <str<strong>on</strong>g>of</str<strong>on</strong>g> machinery and plants<br />
by export-oriented industries subject to an increase <str<strong>on</strong>g>of</str<strong>on</strong>g> 40% value-additi<strong>on</strong> in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>ir products and 50% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir total sales income in <str<strong>on</strong>g>the</str<strong>on</strong>g> form <str<strong>on</strong>g>of</str<strong>on</strong>g> export<br />
earnings. The textile industry, which c<strong>on</strong>tributes 65% to <str<strong>on</strong>g>the</str<strong>on</strong>g> total foreign<br />
exchange earnings <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan, is taking full benefits from this decisi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
government. As cott<strong>on</strong> is no l<strong>on</strong>ger available at subsidized prices and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
country faces a threat from India and China, where spinning sector is<br />
expanding rapidly. In additi<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> opening up <str<strong>on</strong>g>of</str<strong>on</strong>g> textile markets under <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
WTO arrangement demands revamping <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> textile industry to face <str<strong>on</strong>g>the</str<strong>on</strong>g> new<br />
challenges. Never<str<strong>on</strong>g>the</str<strong>on</strong>g>less, it has been felt that <str<strong>on</strong>g>the</str<strong>on</strong>g> implementati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
replacement/modernizati<strong>on</strong> plans will not automatically lead to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
manufacture <str<strong>on</strong>g>of</str<strong>on</strong>g> quality yarn at competitive prices unless standard levels <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
process c<strong>on</strong>diti<strong>on</strong>s and machinery/labour performance are achieved at each<br />
stage.<br />
The resp<strong>on</strong>siveness <str<strong>on</strong>g>of</str<strong>on</strong>g> individual actors in a producti<strong>on</strong> chain to changing<br />
incentive structures is linked closely to <str<strong>on</strong>g>the</str<strong>on</strong>g> nature <str<strong>on</strong>g>of</str<strong>on</strong>g> governance in <str<strong>on</strong>g>the</str<strong>on</strong>g> chain.<br />
In <str<strong>on</strong>g>the</str<strong>on</strong>g> absence <str<strong>on</strong>g>of</str<strong>on</strong>g> an effective system <str<strong>on</strong>g>of</str<strong>on</strong>g> governance (as in cott<strong>on</strong> producti<strong>on</strong>,<br />
220
ginning, and spinning), transiti<strong>on</strong> costs are likely to be high as well as<br />
inequitably distributed. Fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r communicati<strong>on</strong> between mill operators and<br />
producers is needed to reinforce <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omic viability <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry. Direct<br />
mill c<strong>on</strong>tracts speed <str<strong>on</strong>g>the</str<strong>on</strong>g> communicati<strong>on</strong> process regarding <str<strong>on</strong>g>the</str<strong>on</strong>g> desirable<br />
quality attributes and improve both producer and mill income. The table<br />
below fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r highlights <str<strong>on</strong>g>the</str<strong>on</strong>g> fact that fabrics and yarns dominate Pakistan’s<br />
export product portfolio <str<strong>on</strong>g>of</str<strong>on</strong>g> textiles, whereas <str<strong>on</strong>g>the</str<strong>on</strong>g> high value added segment<br />
such as clothing shows a very low growth.<br />
Table 2. Exports <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Yarn, Cott<strong>on</strong> Thread and Cott<strong>on</strong> Cloth<br />
Year Cott<strong>on</strong> Yarn Cott<strong>on</strong> Thread Cott<strong>on</strong> Cloth<br />
Value Quantity Value Quantity Value Quantity<br />
Rs milli<strong>on</strong> Milli<strong>on</strong> Kg Rs milli<strong>on</strong> Milli<strong>on</strong> Kg Rs milli<strong>on</strong> Milli<strong>on</strong> Sq meter<br />
1997-98 49988 461.9 79 0.3 53991 1271.3<br />
1998-99 47421 421.5 76 0.3 55980 1355.2<br />
1999-00 55485 513.0 66 0.3 56757 1574.9<br />
2000-01 62914 545.1 61 0.2 60486 1735.8<br />
2001-02 57135 540.0 31 0.1 69297 1909.3<br />
2001-02 42260 391.2 27 0.1 49759 1365.6<br />
2002-03 40808 398.3 22 0.8 55742 1469.2<br />
IV. ACHIEVING HIGHER COTTON PRODUCTION AND<br />
EFFICIENCY<br />
1. Technological Improvements<br />
Pakistan suffers from a number <str<strong>on</strong>g>of</str<strong>on</strong>g> problems related to n<strong>on</strong>-applicati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
standard ginning practices and poor management. Although technological up<br />
gradati<strong>on</strong> has been d<strong>on</strong>e by many industrialists but still <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a lot to be<br />
d<strong>on</strong>e in this respect. Hence <str<strong>on</strong>g>the</str<strong>on</strong>g> efficiency and productivity <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> process is<br />
<strong>on</strong>e-fifth <str<strong>on</strong>g>of</str<strong>on</strong>g> that <str<strong>on</strong>g>of</str<strong>on</strong>g> machines currently being used in <str<strong>on</strong>g>the</str<strong>on</strong>g> US or in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
competing countries.<br />
In Pakistan, <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> processing industry has catered to low quality products<br />
- lint, yarn and fabric, over <str<strong>on</strong>g>the</str<strong>on</strong>g> past few decades. Changing global demands<br />
and textile market pr<str<strong>on</strong>g>of</str<strong>on</strong>g>iles are demanding a shift to quality products. In this<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> ginning factory plays a pivotal role for determining quality <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> fibre<br />
as raw material for downstream industry. Yet this comp<strong>on</strong>ent <str<strong>on</strong>g>of</str<strong>on</strong>g> local textile<br />
industry is <str<strong>on</strong>g>the</str<strong>on</strong>g> most neglected and antiquated. Unless up gradati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> this<br />
industry is undertaken, it would not be possible to remain competitive in<br />
export markets.<br />
221
2. Effective Capacity Utilizati<strong>on</strong><br />
Looking at <str<strong>on</strong>g>the</str<strong>on</strong>g> spindles capacity utilizati<strong>on</strong> for major textile exporters,<br />
Pakistan is found to be operating at a very low usage <str<strong>on</strong>g>of</str<strong>on</strong>g> spindles for spinning.<br />
Of <str<strong>on</strong>g>the</str<strong>on</strong>g> total 163 milli<strong>on</strong> spindles in <str<strong>on</strong>g>the</str<strong>on</strong>g> world, 113 milli<strong>on</strong> spindles are<br />
installed in Asia. Major Asian yarn producers al<strong>on</strong>g with <str<strong>on</strong>g>the</str<strong>on</strong>g>ir number <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
installed spindles and share in world and Asia are shown in Table 2 below:<br />
Table 3. Installed Spindles and Their Share in <str<strong>on</strong>g>the</str<strong>on</strong>g> World<br />
Country Spindles Share in Share in Asia Growth rate<br />
(‘000’) World (%)<br />
(%)<br />
(%)<br />
China 41710 25.5 38.6 0.1<br />
India 41710 25.5 38.6 3.7<br />
Ind<strong>on</strong>esia 7050 4.3 6.5 4.6<br />
Turkey 4544 2.8 4.0 2.8<br />
Japan 4630 2.7 4.0 -11.0<br />
Thailand 4100 2.5 3.8 2.0<br />
Taiwan 3334 2.0 3.1 -2.3<br />
Korea 2135 1.3 2.0 -10.1<br />
Iran 1975 1.2 1.8 7.3<br />
Pakistan 8159 5.0 7.6 6.2<br />
Pakistan is operating at 18% utilizati<strong>on</strong> for manmade fibre (MMF) that is<br />
lowest am<strong>on</strong>gst all its competitors. Although local availability <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> is <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
competitive edge <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan and its utilizati<strong>on</strong> should naturally be higher for<br />
cott<strong>on</strong>, it is actually below even India and China who use 40% and 35% <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>ir spindles for spinning MMF, respectively. A comparis<strong>on</strong> with India and<br />
China is more realistic because <str<strong>on</strong>g>the</str<strong>on</strong>g>y are larger cott<strong>on</strong> producers than Pakistan<br />
and <str<strong>on</strong>g>the</str<strong>on</strong>g>ir competitive edge in textiles also stems from local cott<strong>on</strong> producti<strong>on</strong><br />
but <str<strong>on</strong>g>the</str<strong>on</strong>g>y are trying to follow <str<strong>on</strong>g>the</str<strong>on</strong>g> world trend in which Pakistan is lagging far<br />
behind.<br />
Table 4. Spindle Capacity Utilizati<strong>on</strong> for MMF (Percent)<br />
Country Cott<strong>on</strong> MMF<br />
Taiwan 34 66<br />
Thailand 51 49<br />
Korea 57 43<br />
India 60 40<br />
China 65 35<br />
Ind<strong>on</strong>esia 66 34<br />
Pakistan 82 18<br />
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3. Market Emphasis<br />
Major markets that Pakistani manufactures have so far not been able to<br />
explore are <str<strong>on</strong>g>the</str<strong>on</strong>g> Japanese, Far East and Middle East markets. These markets<br />
demand high product standards and in return <str<strong>on</strong>g>of</str<strong>on</strong>g>fer higher unit price<br />
realizati<strong>on</strong>s. The shift towards newer product and n<strong>on</strong>-traditi<strong>on</strong>al markets can<br />
<strong>on</strong>ly be brought about by more emphasis <strong>on</strong> syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic garments and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
development <str<strong>on</strong>g>of</str<strong>on</strong>g> a marketing and research infrastructure for <str<strong>on</strong>g>the</str<strong>on</strong>g> industry.<br />
V. INITIATIVES FOR ENHANCING PRODUCTIVITY<br />
1. Benchmarking in Cott<strong>on</strong> Spinning<br />
Benchmarking is <str<strong>on</strong>g>the</str<strong>on</strong>g> process <str<strong>on</strong>g>of</str<strong>on</strong>g> determining who is <str<strong>on</strong>g>the</str<strong>on</strong>g> very best, who sets<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> standard, and what that standard is.<br />
2. Leading Individual and <str<strong>on</strong>g>Group</str<strong>on</strong>g>s <str<strong>on</strong>g>of</str<strong>on</strong>g> Organizati<strong>on</strong>s in Benchmarking<br />
Efforts;<br />
• Defining high pay<str<strong>on</strong>g>of</str<strong>on</strong>g>f areas for research topics<br />
• C<strong>on</strong>ducting short (survey) and l<strong>on</strong>g (site visit) benchmarking<br />
efforts<br />
• Facilitating project teams in benchmarking efforts<br />
• Attracting top companies to join efforts<br />
• Measuring performance<br />
• Performing Gap analysis<br />
• Leading site visits to best practice companies<br />
• Compiling results and making recommendati<strong>on</strong>s for acti<strong>on</strong><br />
• Providing implementati<strong>on</strong> services<br />
3. Creating Benchmarking Databases to Support Benchmarking Efforts;<br />
• Organizing tax<strong>on</strong>omies <str<strong>on</strong>g>of</str<strong>on</strong>g> business processes used for analytic<br />
purposes<br />
• Creating over study maps and guides to structure benchmarking<br />
efforts<br />
• Developing industry standard databases <str<strong>on</strong>g>of</str<strong>on</strong>g> performance measures<br />
223
• Ga<str<strong>on</strong>g>the</str<strong>on</strong>g>ring company resp<strong>on</strong>ses to specific measures into databases<br />
• Administering databases <str<strong>on</strong>g>of</str<strong>on</strong>g> process owners categorized by industry<br />
and process interest<br />
4. Forming Associati<strong>on</strong>s to Share Benchmarking Informati<strong>on</strong>;<br />
• C<strong>on</strong>ducting member meetings<br />
• Identifying critical topics <str<strong>on</strong>g>of</str<strong>on</strong>g> interest<br />
• Forming study groups<br />
• Collecting Performance data<br />
• Identifying leading companies<br />
• Leading site visits to best practice companies<br />
• Compiling results into summary and detailed management reports<br />
5. Benchmarking Creates Value by<br />
• Focusing <strong>on</strong> key performance gaps;<br />
• Identifying ideas from o<str<strong>on</strong>g>the</str<strong>on</strong>g>r companies;<br />
• Creating a c<strong>on</strong>sensus to move an organizati<strong>on</strong> forward;<br />
• Making better decisi<strong>on</strong>s from a larger base <str<strong>on</strong>g>of</str<strong>on</strong>g> facts.<br />
The benchmarking study in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> spinning sector in Pakistan was<br />
undertaken by <str<strong>on</strong>g>the</str<strong>on</strong>g> Nati<strong>on</strong>al Productivity Organizati<strong>on</strong> (NPO), Ministry <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Industries & Producti<strong>on</strong>, in close collaborati<strong>on</strong> with a number <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
organizati<strong>on</strong>s.<br />
C<strong>on</strong>sidering <str<strong>on</strong>g>the</str<strong>on</strong>g> importance <str<strong>on</strong>g>of</str<strong>on</strong>g> enhancing productivity and quality in this<br />
specific sector <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> textile industry, and also its significant c<strong>on</strong>tributi<strong>on</strong> to<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> exports and foreign exchange earnings <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> county, NPO-Pakistan<br />
decided to undertake a process and result benchmarking. The proposed<br />
survey <strong>on</strong> benchmarking was <str<strong>on</strong>g>the</str<strong>on</strong>g> first <str<strong>on</strong>g>of</str<strong>on</strong>g> its kind in Pakistan.<br />
i. Objectives <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Study<br />
The exercise was designed around <str<strong>on</strong>g>the</str<strong>on</strong>g> following objectives:<br />
• To develop in-depth understanding, and applicati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> benchmarking<br />
in companies;<br />
• To identify and encourage <str<strong>on</strong>g>the</str<strong>on</strong>g> implementati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> best practices so as<br />
to minimize costs, improve efficiencies and productivity;<br />
224
• To collect informati<strong>on</strong> <strong>on</strong> best practices in different producti<strong>on</strong><br />
process/secti<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> mills under <str<strong>on</strong>g>the</str<strong>on</strong>g> survey and to develop<br />
comparative data am<strong>on</strong>gst <str<strong>on</strong>g>the</str<strong>on</strong>g> local mills as well as similar projects<br />
in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r Asian countries. (The idea was to identify functi<strong>on</strong>s and<br />
processes in each department <str<strong>on</strong>g>of</str<strong>on</strong>g> a spinning unit, and <str<strong>on</strong>g>the</str<strong>on</strong>g> related<br />
results being obtained. Subsequently, overall results <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
departments would be linked and evaluated, and reas<strong>on</strong>s for<br />
differences in various mills would be assessed. Simultaneously, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
practices in use would be determined).<br />
The benchmarking methodology adopted was intended to assist in<br />
ascertaining best practices, which need to be adopted in Pakistani mills. It<br />
was decided that necessary guidelines, c<strong>on</strong>crete acti<strong>on</strong> plans and<br />
recommendati<strong>on</strong>s based <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> observati<strong>on</strong>s and empirical findings from <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
exercise would be made. The Government <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan, with <str<strong>on</strong>g>the</str<strong>on</strong>g> assistance <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
NPO-Pakistan, and <str<strong>on</strong>g>the</str<strong>on</strong>g> APO can <str<strong>on</strong>g>the</str<strong>on</strong>g>n toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r take necessary measures and<br />
plans for its implementati<strong>on</strong> and fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r development in order to enhance <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
overall productivity in <str<strong>on</strong>g>the</str<strong>on</strong>g> sector.<br />
ii. Scope <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Study<br />
The study was carried out for enhancing <str<strong>on</strong>g>the</str<strong>on</strong>g> productivity <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> textile<br />
spinning sector. In Pakistan, <str<strong>on</strong>g>the</str<strong>on</strong>g>re are mainly two types <str<strong>on</strong>g>of</str<strong>on</strong>g> mills – average<br />
size <str<strong>on</strong>g>of</str<strong>on</strong>g> up to 25,000 spindles, and large mills having more than 25,000<br />
spindles. Within <str<strong>on</strong>g>the</str<strong>on</strong>g>se mills, despite <str<strong>on</strong>g>the</str<strong>on</strong>g> fact that same machinery is installed<br />
(Chinese/Japanese/German origin), <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a combinati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> yarn counts<br />
being manufactured. It was learnt, <str<strong>on</strong>g>the</str<strong>on</strong>g> available raw cott<strong>on</strong> is best for making<br />
lower count yarn i.e. 20s. Most <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> mills have now upgraded <str<strong>on</strong>g>the</str<strong>on</strong>g>ir facilities<br />
to produce 40s count yarn. Based <strong>on</strong> its discussi<strong>on</strong>s with APTMA and<br />
Spinning Machinery Company (Pvt.) Ltd., NPO decided to focus <strong>on</strong> that<br />
particular segment, <str<strong>on</strong>g>the</str<strong>on</strong>g> product <str<strong>on</strong>g>of</str<strong>on</strong>g> which is mainly exported. Pakistan is<br />
presently exporting a coarse quality <str<strong>on</strong>g>of</str<strong>on</strong>g> yarn. As a short-term goal, NPO<br />
decided to benchmark <str<strong>on</strong>g>the</str<strong>on</strong>g>se mills so that increased productivity in this<br />
segment will directly and immediately affect our exports earnings and GDP.<br />
Subsequently, since benchmarking is a c<strong>on</strong>tinuous learning process,<br />
benchmarking will study improving o<str<strong>on</strong>g>the</str<strong>on</strong>g>r areas <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>cern e.g. energy<br />
c<strong>on</strong>sumpti<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> textile sector.<br />
iii. Steps <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Benchmarking Study<br />
The NPO-Pakistan followed <str<strong>on</strong>g>the</str<strong>on</strong>g> NPC Model for c<strong>on</strong>ducting <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
benchmarking exercise. The procedure adopted is indicated below:<br />
225
Benchmarking steps are:<br />
● What to benchmark<br />
● Plan benchmarking project<br />
Understand & analyze <str<strong>on</strong>g>the</str<strong>on</strong>g> current business practices that have been targeted<br />
●<br />
for reform<br />
● Collect data and informati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> processes to be benchmarked<br />
● Analyze data/informati<strong>on</strong> to determine best practices<br />
● Determine best practices to be adopted<br />
● Implementati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Results<br />
A total number <str<strong>on</strong>g>of</str<strong>on</strong>g> 14 mills in Punjab c<strong>on</strong>sented to become benchmarking<br />
partners, out <str<strong>on</strong>g>of</str<strong>on</strong>g> which 12 mills shared <str<strong>on</strong>g>the</str<strong>on</strong>g>ir data. However, as has been<br />
menti<strong>on</strong>ed before, since <str<strong>on</strong>g>the</str<strong>on</strong>g> prerogative to chose a balanced sample for study<br />
did not rest with NPO, most <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> mills which chose to participate in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
exercise turned out to be above average mills. As such, <str<strong>on</strong>g>the</str<strong>on</strong>g> differences<br />
am<strong>on</strong>gst <str<strong>on</strong>g>the</str<strong>on</strong>g> mills were minor.<br />
Although NPO had specified its criteria, it was also learnt during <str<strong>on</strong>g>the</str<strong>on</strong>g> visits<br />
that most <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> benchmark mills are producing different counts <str<strong>on</strong>g>of</str<strong>on</strong>g> yarns and<br />
different varieties e.g. combed, carded, slub, core-spun,lycra, polyestercott<strong>on</strong>,<br />
etc. The count varied from 20 ne to 40 ne during <strong>on</strong>e shift. Both<br />
labour and machine productivity is influenced by different yarn parameters<br />
i.e. blend (cott<strong>on</strong> type, syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic, waste,etc), count, twist, slub, nep, core yarn.<br />
Hence, although best practices were noted during <str<strong>on</strong>g>the</str<strong>on</strong>g> visits, but <str<strong>on</strong>g>the</str<strong>on</strong>g> aim to set<br />
Productivity Assessment Technique and Productivity Standard for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
Spinning Sector could not be finalized in <str<strong>on</strong>g>the</str<strong>on</strong>g> first phase.<br />
It was hence determined, that in <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d phase <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> benchmarking study,<br />
NPO would undertake <str<strong>on</strong>g>the</str<strong>on</strong>g> formulati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Spinners’ data as d<strong>on</strong>e in<br />
Europe and India. This informati<strong>on</strong> is based <strong>on</strong> assessing labour productivity,<br />
machine productivity, and cost structures, as well as comparing quality data<br />
with <str<strong>on</strong>g>the</str<strong>on</strong>g> Uster Statistics. The procedure entailed three steps:<br />
• Process analysed (classical break down <str<strong>on</strong>g>of</str<strong>on</strong>g> spinning process)<br />
• Process measured<br />
• Data made comparable<br />
Detailed data was collected by NPO. However, in order to compare <str<strong>on</strong>g>the</str<strong>on</strong>g> data,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> / labor values etc. have to be adjusted for comparis<strong>on</strong>. In order<br />
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to formulate a basis for comparis<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>cept <str<strong>on</strong>g>of</str<strong>on</strong>g> A STANDARD MILL<br />
was developed. With <str<strong>on</strong>g>the</str<strong>on</strong>g> help <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>versi<strong>on</strong> tables, mills’ data can <str<strong>on</strong>g>the</str<strong>on</strong>g>n be<br />
c<strong>on</strong>verted <strong>on</strong> a comparable basis to measure <str<strong>on</strong>g>the</str<strong>on</strong>g>ir performance and<br />
productivity. At <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>clusi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> this study, NPO has established <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
following:<br />
• Identificati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> 80 best practices; it is expected that with <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
adopti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> best practices identified, overall productivity <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
spinning sector will improve between 2-5% which would result in<br />
reducti<strong>on</strong> in material handling and c<strong>on</strong>versi<strong>on</strong> costs by rs.7.500<br />
milli<strong>on</strong> per annum in an average mill. This will thus ensure a<br />
substantial increase in pr<str<strong>on</strong>g>of</str<strong>on</strong>g>itability <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> mills;<br />
• A technique to assess productivity <str<strong>on</strong>g>of</str<strong>on</strong>g> a mill; this entails<br />
calculati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> labor and machine productivity <str<strong>on</strong>g>of</str<strong>on</strong>g> each mill;<br />
• A standard mill for comparing <str<strong>on</strong>g>the</str<strong>on</strong>g> performance <str<strong>on</strong>g>of</str<strong>on</strong>g> each mill;<br />
• Comparable data to measure <str<strong>on</strong>g>the</str<strong>on</strong>g> performance <str<strong>on</strong>g>of</str<strong>on</strong>g> each mill with<br />
o<str<strong>on</strong>g>the</str<strong>on</strong>g>r mills in <str<strong>on</strong>g>the</str<strong>on</strong>g> same sector.<br />
Benefits <str<strong>on</strong>g>of</str<strong>on</strong>g> benchmarking: Benchmarking allows <str<strong>on</strong>g>the</str<strong>on</strong>g> formati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> a Best<br />
Practice Network, which generates knowledge <strong>on</strong> global best practices that<br />
are useful to achieve best practice performance standards, supporting <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
transfer <str<strong>on</strong>g>of</str<strong>on</strong>g> best practice knowledge. To perform its role effectively, <str<strong>on</strong>g>the</str<strong>on</strong>g> best<br />
practice network allows <str<strong>on</strong>g>the</str<strong>on</strong>g> development <str<strong>on</strong>g>of</str<strong>on</strong>g> a best practice benchmarking<br />
toolkit, comprising a c<strong>on</strong>sistent and comprehensive framework and<br />
methodology, for benchmarking across mills, firms and even countries.<br />
Comprehensive Benchmarking will:<br />
• Identify where global best practices reside;<br />
• Allow <str<strong>on</strong>g>the</str<strong>on</strong>g> gain <str<strong>on</strong>g>of</str<strong>on</strong>g> useful knowledge <strong>on</strong> global best practices that<br />
will help to achieve superior performance;<br />
• Augment current best practice networks or learning circles to<br />
enhance competitiveness.<br />
VI. CLUSTER DEVELOPMENT OF WEAVING SECTOR<br />
Since <str<strong>on</strong>g>the</str<strong>on</strong>g> 1990’s industrial clusters have generated much excitement am<strong>on</strong>gst<br />
academics and policy makers. The view that competitiveness can be<br />
enhanced in geographically c<strong>on</strong>centrated and sector specialized clusters has<br />
found res<strong>on</strong>ance am<strong>on</strong>gst ec<strong>on</strong>omists and business management specialists.<br />
The allure <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> approach lies in its promise for small scale industry and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
227
importance it attaches to Local Linkages. It shows that with ec<strong>on</strong>omies <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
agglomerati<strong>on</strong> and local joint acti<strong>on</strong> small and medium sized enterprises can<br />
compete al<strong>on</strong>gside large firms in global markets. Cluster specific external<br />
ec<strong>on</strong>omies include <str<strong>on</strong>g>the</str<strong>on</strong>g> presence <str<strong>on</strong>g>of</str<strong>on</strong>g> specialized labor, specialized suppliers<br />
and knowledge spillovers. Ec<strong>on</strong>omies <str<strong>on</strong>g>of</str<strong>on</strong>g> scale and scope both arise where<br />
firms c<strong>on</strong>centrate <strong>on</strong> particular processes and produce complex goods by<br />
interacting with each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r. High levels <str<strong>on</strong>g>of</str<strong>on</strong>g> organizati<strong>on</strong>al flexibility within<br />
small clustered firms, fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r result in cost advantages. Finally, local joint<br />
acti<strong>on</strong> between firms and through local instituti<strong>on</strong>s has <str<strong>on</strong>g>the</str<strong>on</strong>g> potential <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
enhancing <str<strong>on</strong>g>the</str<strong>on</strong>g> capacity <str<strong>on</strong>g>of</str<strong>on</strong>g> small firms and raising <str<strong>on</strong>g>the</str<strong>on</strong>g> overall competitiveness<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cluster.<br />
The essence <str<strong>on</strong>g>of</str<strong>on</strong>g> a competitiveness strategy is to promote in-firm learning, skill<br />
development and technological effort; improve <str<strong>on</strong>g>the</str<strong>on</strong>g> supply <str<strong>on</strong>g>of</str<strong>on</strong>g> informati<strong>on</strong>,<br />
skills and technology from surrounding markets and instituti<strong>on</strong>s; and<br />
coordinate collective learning processes that involve different firms across<br />
related industries or 'clusters', geographical or activity-wise. Realizing <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
benefits <str<strong>on</strong>g>of</str<strong>on</strong>g> cluster development NPO has embarked <strong>on</strong> an initiative in<br />
collaborati<strong>on</strong> with <str<strong>on</strong>g>the</str<strong>on</strong>g> United Nati<strong>on</strong>s Industrial <strong>Development</strong> Organisati<strong>on</strong><br />
(UNIDO) to establish a Weaving Cluster in Hyderabad, Pakistan.<br />
Identificati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> clusters or inter-linked industrial activities share str<strong>on</strong>g<br />
technological externalities, use <str<strong>on</strong>g>the</str<strong>on</strong>g> existing base <str<strong>on</strong>g>of</str<strong>on</strong>g> skills and capabilities,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>se can fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r develop good backward linkages and face rising competiti<strong>on</strong><br />
both locally and abroad. The best way to proceed is to examine closely <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
experience <str<strong>on</strong>g>of</str<strong>on</strong>g> countries that have similar endowments but have been<br />
successful in developing competitive bases. This is an art ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than a<br />
science and involves c<strong>on</strong>siderable benchmarking and policy analysis.<br />
Pakistan's fabrics range from coarse to super fine varieties; while coarse and<br />
medium varieties are mostly exported, fine and super fine is c<strong>on</strong>sumed<br />
locally. Although <str<strong>on</strong>g>the</str<strong>on</strong>g>re has been a declining trend in <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cloth<br />
in <str<strong>on</strong>g>the</str<strong>on</strong>g> mill sector over <str<strong>on</strong>g>the</str<strong>on</strong>g> past few years, <str<strong>on</strong>g>the</str<strong>on</strong>g> n<strong>on</strong>-mill sector or power loom<br />
sector, maintained a rising tempo <str<strong>on</strong>g>of</str<strong>on</strong>g> expansi<strong>on</strong> in capacity and producti<strong>on</strong>.<br />
The producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> cloth in <str<strong>on</strong>g>the</str<strong>on</strong>g> mill sector has increased marginally by<br />
1.5% during July-March 2002-03, while n<strong>on</strong>-mill sector registered a<br />
phenomenal growth <str<strong>on</strong>g>of</str<strong>on</strong>g> 14.6% in <str<strong>on</strong>g>the</str<strong>on</strong>g> same period. The export <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> cloth<br />
witnessed a tremendous increase <str<strong>on</strong>g>of</str<strong>on</strong>g> 18% during July-March 2002-03 in value,<br />
however in quantitative terms; <str<strong>on</strong>g>the</str<strong>on</strong>g> increase was 7.4%, which is almost a 10%<br />
increase in unit value <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> fabrics in <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al markets. The major<br />
c<strong>on</strong>tributi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> power loom sector to exports has been in <str<strong>on</strong>g>the</str<strong>on</strong>g> form <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
different types <str<strong>on</strong>g>of</str<strong>on</strong>g> fabrics, including grey cloth, bed spreads, specialized cloth<br />
etc.<br />
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Presently Pakistan has been producing and exporting relatively low value<br />
added grey fabrics. The quantity exported is woven from coarse to medium<br />
yarn counts and about 70 to 80% is in <str<strong>on</strong>g>the</str<strong>on</strong>g> form <str<strong>on</strong>g>of</str<strong>on</strong>g> sheeting. The importing<br />
countries generally utilize it for curtain linings, coverings, dusters etc.<br />
C<strong>on</strong>siderable quantities <str<strong>on</strong>g>of</str<strong>on</strong>g> imported Pakistan grey cloth are also processed by<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> importing countries for end-uses according to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir respective market<br />
requirements. The power loom sector, which accounts for 90% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> total<br />
grey cloth producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan comprises <str<strong>on</strong>g>of</str<strong>on</strong>g> mostly small family owned<br />
units <str<strong>on</strong>g>of</str<strong>on</strong>g> approximately four looms each. The owners in general lack technical<br />
know how and c<strong>on</strong>tinue to operate old, obsolete shuttle looms without<br />
adequate quality c<strong>on</strong>trol. The cloth marketed is generally <str<strong>on</strong>g>of</str<strong>on</strong>g> poor quality and<br />
is <str<strong>on</strong>g>the</str<strong>on</strong>g>refore sold at low price. C<strong>on</strong>sequently, Pakistani cott<strong>on</strong> cloth suppliers<br />
have developed and retain a poor quality image. Most <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> looms in<br />
Pakistan are old, obsolete shuttle looms and pose a big problem for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
government as to how this sector could be modernized quickly. It was this<br />
sector which was resp<strong>on</strong>sible for giving to Pakistan poorly perceived image<br />
in <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market.<br />
The declining value <str<strong>on</strong>g>of</str<strong>on</strong>g> export per <str<strong>on</strong>g>the</str<strong>on</strong>g> sq.meter emphasizes <str<strong>on</strong>g>the</str<strong>on</strong>g> urgency <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
modernizati<strong>on</strong> and up-gradati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> power loom sector. Under <str<strong>on</strong>g>the</str<strong>on</strong>g> Textile<br />
Visi<strong>on</strong> 2005, it was envisaged that Rs.333 billi<strong>on</strong> would be invested in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
textile industry by <str<strong>on</strong>g>the</str<strong>on</strong>g> year 2005, out <str<strong>on</strong>g>of</str<strong>on</strong>g> which Rs.40 billi<strong>on</strong> was expected to<br />
be invested in air jet and weaving water jet looms. Over <str<strong>on</strong>g>the</str<strong>on</strong>g> last three years,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> textile sector received USD 1.5 billi<strong>on</strong> worth <str<strong>on</strong>g>of</str<strong>on</strong>g> investment. However, a<br />
matter <str<strong>on</strong>g>of</str<strong>on</strong>g> serious c<strong>on</strong>cern is that 89% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> total producti<strong>on</strong> is still being<br />
produced by <str<strong>on</strong>g>the</str<strong>on</strong>g> power loom sector, mainly comprising <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> old shuttle<br />
looms. There has been no c<strong>on</strong>spicuous replacement in this small and medium<br />
enterprise sector.<br />
In support <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> government’s objectives in line with <str<strong>on</strong>g>the</str<strong>on</strong>g> Textile Visi<strong>on</strong> 2005<br />
NPO has c<strong>on</strong>ducted a study to identify <str<strong>on</strong>g>the</str<strong>on</strong>g> specific up-gradati<strong>on</strong> required in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> power loom sector to enhance productivity <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> mills. This study has<br />
designed viable and affordable financial product to support <str<strong>on</strong>g>the</str<strong>on</strong>g> weaving<br />
sector. Up-gradati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> power loom projects is expected to:<br />
• Improve <str<strong>on</strong>g>the</str<strong>on</strong>g> productivity <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> individual projects i.e. <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
quantity and quality <str<strong>on</strong>g>of</str<strong>on</strong>g> fabric produced with <str<strong>on</strong>g>the</str<strong>on</strong>g> effective<br />
utilizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> available resources;<br />
• Support <str<strong>on</strong>g>the</str<strong>on</strong>g> local manufacturing and allied industry;<br />
• Support <str<strong>on</strong>g>the</str<strong>on</strong>g> government’s objective <str<strong>on</strong>g>of</str<strong>on</strong>g> producing value added<br />
products;<br />
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• Improve <str<strong>on</strong>g>the</str<strong>on</strong>g> image <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan as a cloth exporter in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
internati<strong>on</strong>al market and facilitate a break through in textile<br />
exports.<br />
VII. NATIONAL INITIATIVES<br />
1. BMR Requirements <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistani Spinning Industry<br />
Balancing, Modernizati<strong>on</strong> and Rehabilitati<strong>on</strong> (BMR) is a regular requirement<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> any industry. Need for BMR arises as a result <str<strong>on</strong>g>of</str<strong>on</strong>g> any <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> following<br />
reas<strong>on</strong>s:<br />
• There is a change in <str<strong>on</strong>g>the</str<strong>on</strong>g> product features that warrants a newer<br />
technology.<br />
• Levels <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> need to be enhanced.<br />
• Plant/Machinery needs a thorough refurbishment as a result <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
wear and tear.<br />
BMR plays a pivotal role in keeping <str<strong>on</strong>g>the</str<strong>on</strong>g> local industry up to mark and<br />
helping it to remain competitive in internati<strong>on</strong>al markets. The spinning<br />
industry in Pakistan has, in <str<strong>on</strong>g>the</str<strong>on</strong>g> past 53 years, underg<strong>on</strong>e a number <str<strong>on</strong>g>of</str<strong>on</strong>g> BMRs<br />
<strong>on</strong> a unit to unit basis. The requirements for <str<strong>on</strong>g>the</str<strong>on</strong>g>se have varied from additi<strong>on</strong>s<br />
and/or up-gradati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> following processes:<br />
• Back Process<br />
• Spinning<br />
• Winding<br />
• Testing Facilities<br />
The BMR programs result in diversificati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> product and producti<strong>on</strong><br />
efficiencies, coupled with reduced costs. The general level <str<strong>on</strong>g>of</str<strong>on</strong>g> technology in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> Pakistani spinning industry is satisfactory. Most <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> industry is using<br />
state-<str<strong>on</strong>g>of</str<strong>on</strong>g>-<str<strong>on</strong>g>the</str<strong>on</strong>g>-art machinery. Though <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning industry is old and many <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> units are as old as <str<strong>on</strong>g>the</str<strong>on</strong>g> time <str<strong>on</strong>g>of</str<strong>on</strong>g> partiti<strong>on</strong>, most <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>m have underg<strong>on</strong>e<br />
BMR at successive times in order for <str<strong>on</strong>g>the</str<strong>on</strong>g>m to remain operati<strong>on</strong>al in a<br />
competitive manner. However, since <str<strong>on</strong>g>the</str<strong>on</strong>g> industry has suffered due to bad<br />
cott<strong>on</strong> crops in nineties, so <str<strong>on</strong>g>the</str<strong>on</strong>g> investment going towards BMR has decreased.<br />
The result is that currently, BMR requirements in <str<strong>on</strong>g>the</str<strong>on</strong>g> industry are higher than<br />
at previous times and <str<strong>on</strong>g>the</str<strong>on</strong>g> lack <str<strong>on</strong>g>of</str<strong>on</strong>g> BMR emerges as <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> major problems<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning industry.<br />
230
The BMR requirements <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning industry for <str<strong>on</strong>g>the</str<strong>on</strong>g> next five years has<br />
been assessed as part <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> l<strong>on</strong>g-term policy <strong>on</strong> textiles. The exact<br />
requirement <str<strong>on</strong>g>of</str<strong>on</strong>g> BMR varies from <strong>on</strong>e company to ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r. There is no fixed<br />
rule by which an estimate can be made <strong>on</strong> an industry wide basis. However,<br />
BMR requirements have been estimated <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> basis <str<strong>on</strong>g>of</str<strong>on</strong>g> available informati<strong>on</strong><br />
and certain assumpti<strong>on</strong>s.<br />
Table 5. Estimate <str<strong>on</strong>g>of</str<strong>on</strong>g> Investment Required for Urgent BMR <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Textile<br />
Industry Over <str<strong>on</strong>g>the</str<strong>on</strong>g> Next Five Years<br />
Sector Particulars <str<strong>on</strong>g>of</str<strong>on</strong>g> urgent BMR Unit Rate C and F cost Landed cost<br />
(in milli<strong>on</strong>) (In Milli<strong>on</strong>)<br />
Spinning i) Replacement <str<strong>on</strong>g>of</str<strong>on</strong>g> 4.033 milli<strong>on</strong> spindles<br />
including back process machines<br />
@US$ 250 per spindle US$ 1008.25 = Rs. 60,495 Rs. 66,544.<br />
ii) Modernizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> 1.535 milli<strong>on</strong> spindles<br />
including back process machines<br />
iii) Replacement <str<strong>on</strong>g>of</str<strong>on</strong>g> 100,000 rotors<br />
including back process machines<br />
iv) For installati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> compact spinning<br />
mills (approx. 200,000 spindles)<br />
Weaving i) Modernisati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> 5000 old looms<br />
operating in <str<strong>on</strong>g>the</str<strong>on</strong>g> mill sector<br />
Independent<br />
weaving sector<br />
i) Replacement <str<strong>on</strong>g>of</str<strong>on</strong>g> 5000 old projectile and<br />
flexible rapier looms<br />
Power loom sector i) Up gradati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> 50,000 old and obsolete<br />
looms<br />
@ US$ 50 per spindle US$ 76.75 = Rs. 4,605 Rs. 5,065<br />
@ DM 3500/- per rotor DM 350 = Rs. 9,800 Rs. 10,780<br />
231<br />
---- US$ 100 = Rs. 6000 Rs. 6,600<br />
@ Sw. Fr. 4,0000 per<br />
loom<br />
@ JY 10 milli<strong>on</strong> per<br />
loom<br />
Sub-Total Rs. 88,990<br />
Sw. Fr 200 Rs. 7400 Rs. 8,140<br />
JY 50,000 = Rs. 23,085 Rs. 25,393<br />
@ US$ 25000- per loom US$ 1,250 = Rs. 75,000 Rs. 82,500<br />
Sub-Total Rs. 116,033<br />
Total Rs. 170,585 Rs. 205,023<br />
Ex. Rates: US$ Rs. 60, SW. Fr. = Rs. 37, JY = 0.4167, £ = Rs. 87 – D.M. = Rs. 28<br />
2. Textile Visi<strong>on</strong> 2005<br />
Say Rs. 205,042<br />
Realizing that various sectors <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> textile industry <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan were in<br />
urgent need <str<strong>on</strong>g>of</str<strong>on</strong>g> balancing, modernizati<strong>on</strong> and replacement, <str<strong>on</strong>g>the</str<strong>on</strong>g> martial law<br />
government <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan has formulated a new policy called <str<strong>on</strong>g>the</str<strong>on</strong>g> "Textile<br />
Visi<strong>on</strong> 2005". This policy envisages an open, market driven, innovative and<br />
dynamic textile sector which would be internati<strong>on</strong>ally integrated, globally<br />
competitive and fully equipped to exploit <str<strong>on</strong>g>the</str<strong>on</strong>g> opportunities created by MFA<br />
phase out which will enable Pakistan to be am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> top 5 textile exporting<br />
countries in Asia. For <str<strong>on</strong>g>the</str<strong>on</strong>g> implementati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> this textile policy <str<strong>on</strong>g>the</str<strong>on</strong>g> GOP has<br />
allocated investment <str<strong>on</strong>g>of</str<strong>on</strong>g> a total <str<strong>on</strong>g>of</str<strong>on</strong>g> Rs. 333 billi<strong>on</strong> over <str<strong>on</strong>g>the</str<strong>on</strong>g> next five years, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
break up <str<strong>on</strong>g>of</str<strong>on</strong>g> which is given in Table 6. The Textile Visi<strong>on</strong> 2005 besides<br />
providing a road map to enhance <str<strong>on</strong>g>the</str<strong>on</strong>g> exports <str<strong>on</strong>g>of</str<strong>on</strong>g> textile products also<br />
estimated <str<strong>on</strong>g>the</str<strong>on</strong>g> investment requirements for <str<strong>on</strong>g>the</str<strong>on</strong>g> creati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> new capacity and<br />
up-gradati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> existing producti<strong>on</strong> base.
Table 6. Expected Investment in Textile Sector in Asian<br />
Textile Exporting Countries Over <str<strong>on</strong>g>the</str<strong>on</strong>g> Next Five Years<br />
Sector Allocati<strong>on</strong>(in Rs billi<strong>on</strong>)<br />
Stitching machines 39<br />
Processing in weaving 62<br />
Processing in knitting 07<br />
Knitting machines 29<br />
Air jet looms 40<br />
Water jet looms 40<br />
Spinning (spindles) 87<br />
Polyester fibre 29<br />
Total 333<br />
All <str<strong>on</strong>g>the</str<strong>on</strong>g> investment estimates were linked with <str<strong>on</strong>g>the</str<strong>on</strong>g> overall export performance<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> textile sector. The basic objective was to project total investment layout<br />
in order to achieve a specific level <str<strong>on</strong>g>of</str<strong>on</strong>g> exports. For <str<strong>on</strong>g>the</str<strong>on</strong>g> year 2001 a total <str<strong>on</strong>g>of</str<strong>on</strong>g> Rs<br />
24 billi<strong>on</strong> was estimated as <str<strong>on</strong>g>the</str<strong>on</strong>g> investment requirement. Although total<br />
disbursements exceeded <str<strong>on</strong>g>the</str<strong>on</strong>g> requirement by almost 21% <str<strong>on</strong>g>the</str<strong>on</strong>g> directi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
investment was not in alignment with <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>e envisaged in <str<strong>on</strong>g>the</str<strong>on</strong>g> Textile Visi<strong>on</strong><br />
2005. The Textile Visi<strong>on</strong> 2005 clearly menti<strong>on</strong>ed that in <str<strong>on</strong>g>the</str<strong>on</strong>g> initial years<br />
heavy investment will be needed to create additi<strong>on</strong>al capacity in <str<strong>on</strong>g>the</str<strong>on</strong>g> apparel<br />
industry however, total disbursement to this sector was <strong>on</strong>ly 36% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
target. Also processing was suggested to be developed <strong>on</strong> war a footing in<br />
order to support garment manufacturing but unfortunately total disbursement<br />
in processing was <strong>on</strong>ly 49% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> targeted amount. From within <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
traditi<strong>on</strong>al sectors <str<strong>on</strong>g>the</str<strong>on</strong>g> bulk <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> investment has g<strong>on</strong>e to <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning<br />
industry, in-fact 56% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> total investment in <str<strong>on</strong>g>the</str<strong>on</strong>g> textile sector during 2001<br />
has been directed towards <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning industry.<br />
The disbursement to spinning was three times higher than <str<strong>on</strong>g>the</str<strong>on</strong>g> amount<br />
estimated in <str<strong>on</strong>g>the</str<strong>on</strong>g> Textile Visi<strong>on</strong>. Although heavy investment were forecast in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> spinning sector so as to create a processing capacity <str<strong>on</strong>g>of</str<strong>on</strong>g> 13 milli<strong>on</strong> bales<br />
but <str<strong>on</strong>g>the</str<strong>on</strong>g>se were to take place from <str<strong>on</strong>g>the</str<strong>on</strong>g> year 2003 <strong>on</strong>wards. The bright side <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> investments in <str<strong>on</strong>g>the</str<strong>on</strong>g> textile industry is <str<strong>on</strong>g>the</str<strong>on</strong>g> high investment in <str<strong>on</strong>g>the</str<strong>on</strong>g> Air Jet<br />
weaving segment, <str<strong>on</strong>g>the</str<strong>on</strong>g> actual disbursement for which has exceeded <str<strong>on</strong>g>the</str<strong>on</strong>g> target.<br />
Such investments are likely to fuel value additi<strong>on</strong> in garments manufacturing<br />
by indigenously providing a diverse range <str<strong>on</strong>g>of</str<strong>on</strong>g> fabrics. However, <str<strong>on</strong>g>the</str<strong>on</strong>g> Textile<br />
Visi<strong>on</strong> also menti<strong>on</strong>ed <str<strong>on</strong>g>the</str<strong>on</strong>g> importance <str<strong>on</strong>g>of</str<strong>on</strong>g> state <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> art syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fabric<br />
weaving technology. This can play an instrumental role in providing high<br />
quality syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fabrics to <str<strong>on</strong>g>the</str<strong>on</strong>g> apparel sector which can penetrate <str<strong>on</strong>g>the</str<strong>on</strong>g> global<br />
woven women-wear markets. The investments in <str<strong>on</strong>g>the</str<strong>on</strong>g> Water Jet weaving<br />
sector are not at all in line with <str<strong>on</strong>g>the</str<strong>on</strong>g> recommendati<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Textile Visi<strong>on</strong><br />
2005.<br />
232
VIII. POLICY RECOMMENDATIONS<br />
Looking bey<strong>on</strong>d 2005, complete quota removals and a recent success in<br />
exports may lead to a false sense <str<strong>on</strong>g>of</str<strong>on</strong>g> being impassive. Assuming c<strong>on</strong>stant<br />
demand, it is crucial that Pakistan develops its comparative advantage in<br />
textile producti<strong>on</strong> which is mainly due to low labour costs and cheap access<br />
to raw materials. This comparative advantage is vital for maintaining a str<strong>on</strong>g<br />
market share as eventually supply <str<strong>on</strong>g>of</str<strong>on</strong>g> textiles would increase after 2005<br />
leading to falling prices which will first and foremost drive out <str<strong>on</strong>g>the</str<strong>on</strong>g> inefficient<br />
producer. Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r potential benefit to Pakistan could be <str<strong>on</strong>g>the</str<strong>on</strong>g> increased export<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> low value added products to countries which have already gained market<br />
share as <str<strong>on</strong>g>the</str<strong>on</strong>g>se would need to increase producti<strong>on</strong> in order to meet <str<strong>on</strong>g>the</str<strong>on</strong>g>ir export<br />
obligati<strong>on</strong>s.<br />
Textile in <str<strong>on</strong>g>the</str<strong>on</strong>g> west has underg<strong>on</strong>e massive restructuring and is becoming<br />
more and more capital intensive. As trade in this sector is liberalised, a highly<br />
competitive envir<strong>on</strong>ment awaits us. The removal <str<strong>on</strong>g>of</str<strong>on</strong>g> quotas will pitch Pakistan<br />
into open competiti<strong>on</strong> with o<str<strong>on</strong>g>the</str<strong>on</strong>g>r exporting countries, <str<strong>on</strong>g>the</str<strong>on</strong>g> impending gain and<br />
loss in market share primarily depends <strong>on</strong> productivity indices and relative<br />
efficiency <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> domestic instituti<strong>on</strong>al framework <str<strong>on</strong>g>of</str<strong>on</strong>g> each country. A major<br />
drawback <str<strong>on</strong>g>of</str<strong>on</strong>g> efficiency in Pakistan is <str<strong>on</strong>g>the</str<strong>on</strong>g> emphasis placed <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning<br />
activity in <str<strong>on</strong>g>the</str<strong>on</strong>g> textile sector in comparis<strong>on</strong> to o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs as shown in <str<strong>on</strong>g>the</str<strong>on</strong>g> figure.<br />
An imperative structural weakness <str<strong>on</strong>g>of</str<strong>on</strong>g> our textile industry is <str<strong>on</strong>g>the</str<strong>on</strong>g> export <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
most <str<strong>on</strong>g>of</str<strong>on</strong>g> our good quality yarn to o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries, ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than being utilised for<br />
producing high value-added products like fabrics or garments locally. This<br />
yarn is imported by countries like Japan, a major export market for yarn,<br />
China, and South Korea. These countries have a well-flourished textile<br />
industry to c<strong>on</strong>vert this yarn into high value added products that fetch much<br />
higher prices in <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market. The stilling disc<strong>on</strong>tent is fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
provided by <str<strong>on</strong>g>the</str<strong>on</strong>g> fact, that <str<strong>on</strong>g>the</str<strong>on</strong>g>se countries do not grow cott<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g>y have a<br />
well-established textile industry because <str<strong>on</strong>g>the</str<strong>on</strong>g>y have invested in modern<br />
manufacturing technology as well as in a qualified and well-trained work<br />
force which greatly enhances <str<strong>on</strong>g>the</str<strong>on</strong>g> productivity <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir textile sector, enabling<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>m to overcome <str<strong>on</strong>g>the</str<strong>on</strong>g> handicap <str<strong>on</strong>g>of</str<strong>on</strong>g> imported yarn.<br />
The new ec<strong>on</strong>omic world order, with deeply integrated global markets will be<br />
increasingly marked with intense competiti<strong>on</strong> and specifically <str<strong>on</strong>g>the</str<strong>on</strong>g> textile<br />
industry will face challenges in <str<strong>on</strong>g>the</str<strong>on</strong>g> development <str<strong>on</strong>g>of</str<strong>on</strong>g> pervasive technology and<br />
communicati<strong>on</strong> networks, massive improvements in internati<strong>on</strong>al logistics<br />
and transportati<strong>on</strong>s, and most <str<strong>on</strong>g>of</str<strong>on</strong>g> all a surmountable impediment in today’s<br />
rapidly growing investment towards human capital and an innovati<strong>on</strong> driven<br />
industry.<br />
233
Figure 11. Sectoral Shares in Total Investment, 1999-2003<br />
50<br />
40<br />
30<br />
20<br />
10<br />
0<br />
Spinning<br />
Weaving<br />
Knitwear<br />
and<br />
Textile<br />
Processing<br />
Made-ups<br />
234<br />
Syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic<br />
Textile<br />
The task that lies ahead requires stimulati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> policies towards fostering a<br />
highly competitive and productivity enhanced industry focusing <strong>on</strong> some <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> following issues:<br />
1. Market <strong>Development</strong><br />
• Demand Oriented Strategy: Producers should try to increase <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
market power by producing high price fashi<strong>on</strong> clothing according to<br />
current demands, and since apparels and garments provide <str<strong>on</strong>g>the</str<strong>on</strong>g> highest<br />
value added product am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> textile items, maximum focus should be<br />
towards <str<strong>on</strong>g>the</str<strong>on</strong>g>se units. Proporti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fibres in our textile products<br />
should be increased especially from <str<strong>on</strong>g>the</str<strong>on</strong>g> export point <str<strong>on</strong>g>of</str<strong>on</strong>g> view, and<br />
realising that this segment is more capital-intensive increase in<br />
technological resources would be required.<br />
• Supply Oriented Strategy: N<strong>on</strong>-price factors <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> supply side play a<br />
crucial role in <str<strong>on</strong>g>the</str<strong>on</strong>g> export performance <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> country and diversificati<strong>on</strong><br />
is needed in <str<strong>on</strong>g>the</str<strong>on</strong>g> directi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> trade. More than 50 percent <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan’s<br />
exports are directed towards European and North American markets and<br />
given <str<strong>on</strong>g>the</str<strong>on</strong>g>ir technological superiority Pakistan’s textiles would certainly<br />
be at disadvantage. This is <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> major drawbacks for <str<strong>on</strong>g>the</str<strong>on</strong>g> low level<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistani exports especially <str<strong>on</strong>g>of</str<strong>on</strong>g> apparels making it worthwhile to<br />
workout new markets in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r parts <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world.
2. Product Differentiati<strong>on</strong> and Quality Standards<br />
Producers should go for product differentiati<strong>on</strong> through <str<strong>on</strong>g>the</str<strong>on</strong>g> promoti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
brand names and advertising and also try to increase <str<strong>on</strong>g>the</str<strong>on</strong>g> efficiency <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
distributi<strong>on</strong>. With an increase in market power <str<strong>on</strong>g>the</str<strong>on</strong>g>y can easily transfer rising<br />
costs to <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>sumer in <str<strong>on</strong>g>the</str<strong>on</strong>g> form <str<strong>on</strong>g>of</str<strong>on</strong>g> rising prices. We need to develop<br />
modern technology that emphasises <strong>on</strong> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> finished products. There<br />
should be should be an introducti<strong>on</strong> and m<strong>on</strong>itoring <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> global quality<br />
standards, ISO 9000 and ISO 14000 in <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> all textile products<br />
in line with envir<strong>on</strong>mental standards.<br />
3. Value Additi<strong>on</strong><br />
Instead <str<strong>on</strong>g>of</str<strong>on</strong>g> emphasising too much <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning activity our industry should<br />
focus more <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> fine quality cloth. Major porti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> good<br />
quality yarn should be utilised domestically in <str<strong>on</strong>g>the</str<strong>on</strong>g> organised mill sector for<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> high value added fabrics <str<strong>on</strong>g>of</str<strong>on</strong>g> better quality and later this<br />
fabric should be used in <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> garments.<br />
4. Technological Up-Gradati<strong>on</strong><br />
Investment in more efficient machinery has become a cliché for this industry,<br />
but n<strong>on</strong>e<str<strong>on</strong>g>the</str<strong>on</strong>g>less we still need to stress <strong>on</strong> its acute significance towards<br />
productivity. Specifically, <str<strong>on</strong>g>the</str<strong>on</strong>g> industry’s reliance <strong>on</strong> low technology power<br />
looms for <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> fabrics should be reduced and <str<strong>on</strong>g>the</str<strong>on</strong>g> number <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
shuttle less looms should be increased, which have <str<strong>on</strong>g>the</str<strong>on</strong>g> capacity to produce<br />
wider width and superior quality fabric for <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market. The<br />
current government initiative has encouraged up gradati<strong>on</strong> in ginning and<br />
spinning which has significantly improved <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> products.<br />
5. Enhancement <str<strong>on</strong>g>of</str<strong>on</strong>g> Human Capital<br />
The current enhancement in productivity is mainly due to increase in capitaloutput<br />
ratios but labour productivity must also increase to fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r improve<br />
overall productivity <str<strong>on</strong>g>of</str<strong>on</strong>g> this sector. Increasing investment towards improving<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> skill level <str<strong>on</strong>g>of</str<strong>on</strong>g> workers, leads not <strong>on</strong>ly to a more qualified and efficient<br />
work force, but also generates a “learning by doing” positive externality,<br />
which provides <str<strong>on</strong>g>the</str<strong>on</strong>g> much needed competitively driven comparative<br />
advantage.<br />
235
6. Resource <strong>Development</strong><br />
Pragmatic competitiveness in global trade for textile would require highly<br />
innovative producti<strong>on</strong> techniques which require investment in research and<br />
development <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> textile sector. More efficient means <str<strong>on</strong>g>of</str<strong>on</strong>g> producing cott<strong>on</strong><br />
in <str<strong>on</strong>g>the</str<strong>on</strong>g> past has mainly focused <strong>on</strong> introducti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> new seed varieties. What is<br />
needed are policies towards <str<strong>on</strong>g>the</str<strong>on</strong>g> development <str<strong>on</strong>g>of</str<strong>on</strong>g> bio-technology and more<br />
efficient producti<strong>on</strong> techniques through <str<strong>on</strong>g>the</str<strong>on</strong>g> establishment <str<strong>on</strong>g>of</str<strong>on</strong>g> vocati<strong>on</strong>al and<br />
technical learning centres, that c<strong>on</strong>duct training and research in <str<strong>on</strong>g>the</str<strong>on</strong>g> industry<br />
so as to produce cutting edge innovative soluti<strong>on</strong>s. A natural corollary would<br />
be <str<strong>on</strong>g>the</str<strong>on</strong>g> establishment <str<strong>on</strong>g>of</str<strong>on</strong>g> clusters leading to centralisati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> expertise in areas<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> high industrial activity. The extraordinary growth achieved by H<strong>on</strong>g K<strong>on</strong>g,<br />
South Korea and now mainland China depends more than anything <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
ability <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>se countries to exploit <str<strong>on</strong>g>the</str<strong>on</strong>g> shifting comparative advantage in<br />
world textile and clothing industry. Only low wages cannot guarantee a cost<br />
advantage in textile producti<strong>on</strong>. Pakistan retrospectively has had <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
advantage <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> and labour, but <str<strong>on</strong>g>the</str<strong>on</strong>g> textile industry still c<strong>on</strong>tinues to<br />
suffer due to lack <str<strong>on</strong>g>of</str<strong>on</strong>g> competitiveness in <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market.<br />
In order to tap <str<strong>on</strong>g>the</str<strong>on</strong>g> immense opportunities available from world trade, an<br />
increase in overall productivity in labour, technology and innovati<strong>on</strong> is<br />
intrinsic to create <str<strong>on</strong>g>the</str<strong>on</strong>g> ripple effect, to give a competitive edge to <str<strong>on</strong>g>the</str<strong>on</strong>g> industry.<br />
To quote <str<strong>on</strong>g>the</str<strong>on</strong>g> Total Factor Productivity Growth (growth in real GDP per unit<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> labour and capital combined) for Pakistan stands at -0.19 percent, Korea<br />
2.02 percent and India 3.06 percent is just <str<strong>on</strong>g>the</str<strong>on</strong>g> tip <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> iceberg in <str<strong>on</strong>g>the</str<strong>on</strong>g> algebra<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> growth indices.<br />
IX. CONCLUSION<br />
As textile and clothing quotas under <str<strong>on</strong>g>the</str<strong>on</strong>g> Multi-Fibre Arrangement are<br />
removed in c<strong>on</strong>formity with <str<strong>on</strong>g>the</str<strong>on</strong>g> Uruguay Round Agreement <strong>on</strong> Textiles and<br />
Clothing. Pakistan already has a large potential in cott<strong>on</strong>, textiles and clothing<br />
trade and <str<strong>on</strong>g>the</str<strong>on</strong>g> sustainability <str<strong>on</strong>g>of</str<strong>on</strong>g> this quota-free trade depends as much <strong>on</strong><br />
Pakistan’s own domestic policies as <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> new export and import<br />
opportunities available. Trade liberalisati<strong>on</strong> brings <str<strong>on</strong>g>the</str<strong>on</strong>g> market and <str<strong>on</strong>g>the</str<strong>on</strong>g> state<br />
toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r in playing two very important roles in <str<strong>on</strong>g>the</str<strong>on</strong>g> phases <str<strong>on</strong>g>of</str<strong>on</strong>g> rapid growth and<br />
export expansi<strong>on</strong> in developing countries. One represents <str<strong>on</strong>g>the</str<strong>on</strong>g> “widening” <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> domestic framework while <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r is <str<strong>on</strong>g>the</str<strong>on</strong>g> “deepening” <str<strong>on</strong>g>of</str<strong>on</strong>g> this<br />
framework.<br />
Widening <str<strong>on</strong>g>of</str<strong>on</strong>g> domestic instituti<strong>on</strong>s is <str<strong>on</strong>g>the</str<strong>on</strong>g> opening up <str<strong>on</strong>g>of</str<strong>on</strong>g> traditi<strong>on</strong>al ec<strong>on</strong>omies<br />
and <str<strong>on</strong>g>the</str<strong>on</strong>g> vent for surplus <str<strong>on</strong>g>the</str<strong>on</strong>g>ory <str<strong>on</strong>g>of</str<strong>on</strong>g> trade. The prime example being <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
spectacular expansi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> labour-intensive manufacturing exports and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
236
corresp<strong>on</strong>ding high rates <str<strong>on</strong>g>of</str<strong>on</strong>g> ec<strong>on</strong>omic growth in <str<strong>on</strong>g>the</str<strong>on</strong>g> East Asian ec<strong>on</strong>omies<br />
such as Korea and Taiwan in <str<strong>on</strong>g>the</str<strong>on</strong>g> 1960s.The deepening phase <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> domestic<br />
instituti<strong>on</strong>al framework is easily explained by <str<strong>on</strong>g>the</str<strong>on</strong>g> factor proporti<strong>on</strong>s <str<strong>on</strong>g>the</str<strong>on</strong>g>ory <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
comparative advantage when countries with initial c<strong>on</strong>diti<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> scarce land<br />
and abundant labour produce labour intensive exports. These countries have<br />
been enjoying c<strong>on</strong>tinued growth from free trade by starting from highly<br />
labour intensive exports and <str<strong>on</strong>g>the</str<strong>on</strong>g>n climbing <str<strong>on</strong>g>the</str<strong>on</strong>g> ladder <str<strong>on</strong>g>of</str<strong>on</strong>g> comparative<br />
advantage towards less labour intensive and more capital intensive exports, as<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> tightening <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> labour market and rising wages shifts <str<strong>on</strong>g>the</str<strong>on</strong>g>ir comparative<br />
advantage. The crucial clause in this lucid <str<strong>on</strong>g>the</str<strong>on</strong>g>ory is that a developing country<br />
like Pakistan can <strong>on</strong>ly c<strong>on</strong>vert its abundant and cheap labour supply into a<br />
comparative advantage in labour intensive exports by first increasing<br />
agricultural productivity while keeping wages down. Then release this labour<br />
towards manufacturing and thus sec<strong>on</strong>dly increase productivity <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
manufacturing, relative to low wages to gain a comparative advantage in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
world market for labour-intensive manufactures like textiles. Korea and<br />
Taiwan were fortunate in inheriting a valuable instituti<strong>on</strong>al legacy in both<br />
agriculture and manufacturing from <str<strong>on</strong>g>the</str<strong>on</strong>g> Japanese col<strong>on</strong>ial period which was<br />
mainly Japan’s own adaptati<strong>on</strong> to its abundant labour supply as it started its<br />
successful ec<strong>on</strong>omic development.<br />
Incentive packages al<strong>on</strong>e cannot help <str<strong>on</strong>g>the</str<strong>on</strong>g> industry to compete in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
internati<strong>on</strong>al markets. The manufacturers have to broaden <str<strong>on</strong>g>the</str<strong>on</strong>g>ir visi<strong>on</strong> and try<br />
to remove <str<strong>on</strong>g>the</str<strong>on</strong>g> label 'Pakistan is a source <str<strong>on</strong>g>of</str<strong>on</strong>g> low-quality, low-priced products'.<br />
This requires rapid modernizati<strong>on</strong> and up-gradati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong><br />
facilities not <strong>on</strong>ly in <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning sector, but also in <str<strong>on</strong>g>the</str<strong>on</strong>g> upstream ginning and<br />
downstream power loom sectors.<br />
For <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>sumer, productivity gains mean lower prices <str<strong>on</strong>g>of</str<strong>on</strong>g> goods and<br />
services. Productivity improvement will decrease producti<strong>on</strong> cost per unit<br />
which may c<strong>on</strong>tribute to <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>sumers in terms <str<strong>on</strong>g>of</str<strong>on</strong>g> lower prices and more<br />
goods and services at better quality. As <str<strong>on</strong>g>the</str<strong>on</strong>g> level <str<strong>on</strong>g>of</str<strong>on</strong>g> productivity rises, outputs<br />
become more competitive, both in terms <str<strong>on</strong>g>of</str<strong>on</strong>g> quantity and quality. Thus, better<br />
quality goods and services are made available to <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>sumers. With <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
dawn <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> new millennium, Pakistan like all developing countries is facing<br />
a major challenge <str<strong>on</strong>g>of</str<strong>on</strong>g> a free and borderless, global market. Not <strong>on</strong>ly does it<br />
need to improve <str<strong>on</strong>g>the</str<strong>on</strong>g> range and quality <str<strong>on</strong>g>of</str<strong>on</strong>g> its products, innovati<strong>on</strong> and<br />
creativity are equally imperative crux to c<strong>on</strong>sider becoming competitive in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> world arena. Value additi<strong>on</strong> should <str<strong>on</strong>g>the</str<strong>on</strong>g>re be <str<strong>on</strong>g>the</str<strong>on</strong>g> focal point all ec<strong>on</strong>omic<br />
policies and agendas. To <str<strong>on</strong>g>the</str<strong>on</strong>g> broad public and communities, higher<br />
productivity means reducing <str<strong>on</strong>g>the</str<strong>on</strong>g> effects <str<strong>on</strong>g>of</str<strong>on</strong>g> inflati<strong>on</strong>, a higher standard <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
living, provisi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> more employment opportunities, reducing social c<strong>on</strong>flicts<br />
237
since more goods and services are made available at affordable prices due to<br />
increase in c<strong>on</strong>sumers' purchasing power, a better natural envir<strong>on</strong>ment and<br />
community services. To <str<strong>on</strong>g>the</str<strong>on</strong>g> government, improved productivity means <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
capability to provide more and better social services and to carry out<br />
development programs more efficiently.<br />
The government could greatly c<strong>on</strong>tribute to productivity movement through<br />
developing a supportive envir<strong>on</strong>ment by maintaining a productivity<br />
m<strong>on</strong>itoring system, c<strong>on</strong>ducting policy evaluati<strong>on</strong>s, formulating supportive<br />
policies and providing support services and infrastructure for productivity<br />
movement. It can also c<strong>on</strong>tribute to public awareness raising, setting-up<br />
nati<strong>on</strong>al awards and recogniti<strong>on</strong> systems as well as building-up <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al<br />
capabilities such as nati<strong>on</strong>al HRD programs, provisi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> supportive<br />
instituti<strong>on</strong>al infrastructure.<br />
238
Year<br />
Annex 1<br />
Pakistan Cott<strong>on</strong> Producti<strong>on</strong> Statistics<br />
GDP<br />
Growth Rate<br />
Agriculture<br />
Growth Rate<br />
239<br />
Cott<strong>on</strong> (Ag)<br />
Mln. Bales<br />
Cott<strong>on</strong><br />
Yarn Mln.<br />
Kg.<br />
Cott<strong>on</strong> Cloth<br />
Output- Mln.<br />
Sq. Mtr.<br />
1990-1991 5.6 5.0 9.6 1041 293<br />
1991-1992 7.7 9.5 12.8 1171 308<br />
1992-1993 2.1 -5.3 9.1 1219 325<br />
1993-1994 4.4 5.2 8.0 1310 315<br />
1994-1995 5.1 6.6 8.7 1403 322<br />
1995-1996 6.6 11.7 10.6 1495 327<br />
1996-1997 1.7 0.1 9.4 1521 334<br />
1997-1998 3.5 4.5 9.2 1533 340<br />
1998-1999 4.2 1.9 8.8 1540 385<br />
1999-2000 3.9 6.1 11.2 1672 435<br />
2000-2001 1.8 -2.2 10.7 1721 490<br />
2001-2002 3.1 0.1 10.6 1809 568<br />
2002-2003 5.1 4.1 10.2 1902 578<br />
2003-2004 6.4 2.6 10.0 1456 485
240
ENHANCING THE ROLE OF<br />
PRIVATE SECTOR<br />
241
242
ENHANCING THE ROLE OF PRIVATE SECTOR<br />
I. INTRODUCTION<br />
Masood A. Majeed<br />
Director, Asia Ghee Mills Company Ltd., Pakistan<br />
Pakistan is <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> those few lucky IDB cott<strong>on</strong> producing countries where<br />
most <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> chain is c<strong>on</strong>trolled by <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector. Now, we know<br />
that a truly vibrant and str<strong>on</strong>g ec<strong>on</strong>omy emerges where <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector is<br />
fully involved and in c<strong>on</strong>trol. However, we d<strong>on</strong>’t see that in Pakistan as <str<strong>on</strong>g>the</str<strong>on</strong>g>re<br />
are numerous short comings in <str<strong>on</strong>g>the</str<strong>on</strong>g> way. These private sectors are operating,<br />
but for example, <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>cept <str<strong>on</strong>g>of</str<strong>on</strong>g> research and development – <str<strong>on</strong>g>the</str<strong>on</strong>g> very<br />
important R&D, does not exist. Thus enhancing <str<strong>on</strong>g>the</str<strong>on</strong>g> role <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector<br />
is <str<strong>on</strong>g>the</str<strong>on</strong>g> pressing need <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> day which can be achieved by increasing <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
quality <str<strong>on</strong>g>of</str<strong>on</strong>g> work, its efficiency, and fur<str<strong>on</strong>g>the</str<strong>on</strong>g>rmore finding ways <str<strong>on</strong>g>of</str<strong>on</strong>g> privatizing<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> sectors which are still under government c<strong>on</strong>trol.<br />
II. THE ROLE OF PRIVATE SECTOR<br />
The following are areas in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> chain I would like to discuss:<br />
• Cott<strong>on</strong> Farming.<br />
• Cott<strong>on</strong> Research & Breeding.<br />
• Agriculture Credit.<br />
• Agriculture Supplies, Pesticide and fertilizer.<br />
• Agriculture Machinery Manufacturing.<br />
• Cott<strong>on</strong> Handling, Farm to Markets.<br />
• Cott<strong>on</strong> Ginning.<br />
• Ginning Machinery Manufacturing.<br />
• Formal Ginning Training.<br />
• Cott<strong>on</strong> Standards and Evaluati<strong>on</strong> Centers.<br />
• Cott<strong>on</strong> Trade and Export. Role <str<strong>on</strong>g>of</str<strong>on</strong>g> Public & Private Sectors.<br />
• Spinning.<br />
1. Cott<strong>on</strong> Farming<br />
In <str<strong>on</strong>g>the</str<strong>on</strong>g> year 2004, cott<strong>on</strong> was planted <strong>on</strong> about 3.2 milli<strong>on</strong> hectares <str<strong>on</strong>g>of</str<strong>on</strong>g> land in<br />
Pakistan. Almost all cott<strong>on</strong> farming is d<strong>on</strong>e by private farmers. A small<br />
243
quantity <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> is planted at cott<strong>on</strong> research centers in <str<strong>on</strong>g>the</str<strong>on</strong>g> public sector.<br />
Even though Pakistan enjoys an extensive canal irrigati<strong>on</strong> system with<br />
wea<str<strong>on</strong>g>the</str<strong>on</strong>g>r and soil c<strong>on</strong>ducive to cott<strong>on</strong> plantati<strong>on</strong> and growth, Pakistan gets less<br />
yield per hectare than many o<str<strong>on</strong>g>the</str<strong>on</strong>g>r developed countries. This seas<strong>on</strong> it may<br />
reach 781 kg/hectare. The Pakistani farmer is not well aware <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> new<br />
c<strong>on</strong>cepts in water c<strong>on</strong>servati<strong>on</strong> where he can apply water efficiently and<br />
make <str<strong>on</strong>g>the</str<strong>on</strong>g> maximum use <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> mineral rich canal water. Drip irrigati<strong>on</strong>,<br />
sprinkler irrigati<strong>on</strong>, and tilt bed irrigati<strong>on</strong> to preserve water are hard to find<br />
am<strong>on</strong>g farmers. Some farmers have moved towards <str<strong>on</strong>g>the</str<strong>on</strong>g> beds and furrows<br />
method to preserve water. Similarly, a lot <str<strong>on</strong>g>of</str<strong>on</strong>g> fertilizer is wasted when it is<br />
manually spread and rests for hours in <str<strong>on</strong>g>the</str<strong>on</strong>g> sun and open air until it gets<br />
watered. Applying fertilizer in a gaseous state or through o<str<strong>on</strong>g>the</str<strong>on</strong>g>r optimal<br />
methods is also unheard <str<strong>on</strong>g>of</str<strong>on</strong>g> in Pakistan.<br />
The majority <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistani farms are c<strong>on</strong>trolled and owned by small farmers<br />
who d<strong>on</strong>’t have <str<strong>on</strong>g>the</str<strong>on</strong>g> advantages <str<strong>on</strong>g>of</str<strong>on</strong>g> ec<strong>on</strong>omies <str<strong>on</strong>g>of</str<strong>on</strong>g> scale. Large scale farmers<br />
can afford to spend <strong>on</strong> R&D to improve <str<strong>on</strong>g>the</str<strong>on</strong>g>ir farming practices. The<br />
government is trying to encourage corporate farming in <str<strong>on</strong>g>the</str<strong>on</strong>g> country which is<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> need <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> hour, and if effectively promoted it can remedy many <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
above menti<strong>on</strong>ed problems.<br />
2. Cott<strong>on</strong> Research & Breeding<br />
The cott<strong>on</strong> breeding program nourished in government departments is still<br />
dominated by <str<strong>on</strong>g>the</str<strong>on</strong>g>m. Even though private, local and multinati<strong>on</strong>al companies<br />
are working towards providing seeds, n<strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>m are able to provide good<br />
varieties or come up with good breeding programs. Government programs are<br />
slow to resp<strong>on</strong>d to new requirements. Besides cott<strong>on</strong>, hybrid seeds are being<br />
imported by many companies for oil seed crops and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r crops, but n<strong>on</strong>e are<br />
provided for cott<strong>on</strong>. Some private companies have started breeding programs<br />
<strong>on</strong> a very small scale and have also provided BT cott<strong>on</strong> seed for about 5,000<br />
acres during <str<strong>on</strong>g>the</str<strong>on</strong>g> current seas<strong>on</strong> which appears to be quite successful. Pakistan<br />
produces a good number <str<strong>on</strong>g>of</str<strong>on</strong>g> agriculture graduates in its agriculture<br />
universities and programs that can provide a good work force for <str<strong>on</strong>g>the</str<strong>on</strong>g> private<br />
sector. There is a large area for improvement in <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector in Cott<strong>on</strong><br />
Research & Breeding.<br />
3. Agriculture Credit<br />
Agricultural credit is provided by public and private sector banks and by<br />
private agricultural supply companies and cott<strong>on</strong> ginners for <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong><br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>. Pakistan has leapt forward as private sector banks are more<br />
244
aggressively seen marketing to farmers. Similarly pesticide and fertilizer<br />
companies also extended more than five billi<strong>on</strong> Rupees in <str<strong>on</strong>g>the</str<strong>on</strong>g> shape <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
products as loan to farmers and to cott<strong>on</strong> ginners which can be fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />
extended to farmers against bank guarantees.<br />
4. Agricultural Supplies, Pesticides and Fertilizers<br />
The private sector in Pakistan is doing a remarkable job <str<strong>on</strong>g>of</str<strong>on</strong>g> providing<br />
fertilizers and pesticides to farmers. Local and multinati<strong>on</strong>al companies are<br />
meeting <str<strong>on</strong>g>the</str<strong>on</strong>g> local needs and many types <str<strong>on</strong>g>of</str<strong>on</strong>g> fertilizers are available <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
market. Similarly, a huge variety <str<strong>on</strong>g>of</str<strong>on</strong>g> pesticides from various origins are<br />
available. These companies also provide <str<strong>on</strong>g>the</str<strong>on</strong>g>ir products <strong>on</strong> credit against bank<br />
guarantees. The <strong>on</strong>ly disadvantage faced by cott<strong>on</strong> growers sometimes is that<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>y are sold some pesticides by <str<strong>on</strong>g>the</str<strong>on</strong>g> sales team <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>se pesticide firms which<br />
are not really needed or not appropriate.<br />
5. Agriculture Machinery Manufacturing<br />
Almost all agricultural machinery manufacturers are in <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector.<br />
Only tractor manufacturers are more organised and operate <strong>on</strong> a larger scale.<br />
All o<str<strong>on</strong>g>the</str<strong>on</strong>g>r implements are made by small scale manufacturers in un-organised<br />
sector. The farming tools used by Pakistani farmers are old fashi<strong>on</strong>ed and<br />
made <str<strong>on</strong>g>of</str<strong>on</strong>g> heavy steel which weigh heavy <strong>on</strong> tractors and are not efficient at all.<br />
Inaccuracies and <str<strong>on</strong>g>the</str<strong>on</strong>g> malfuncti<strong>on</strong>ing <str<strong>on</strong>g>of</str<strong>on</strong>g> agricultural implements result in<br />
lower yields, expensive, and time c<strong>on</strong>suming farming. There is a huge<br />
potential for investment in <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector to manufacture agriculture<br />
machinery.<br />
6. Cott<strong>on</strong> Handling, Farm to Markets<br />
A large amount <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> in Pakistan comes from small farmers and it passes<br />
through many hands and numerous places before reaching <str<strong>on</strong>g>the</str<strong>on</strong>g> ginneries.<br />
There is a chain <str<strong>on</strong>g>of</str<strong>on</strong>g> middlemen that provide an important role in <str<strong>on</strong>g>the</str<strong>on</strong>g> rural<br />
ec<strong>on</strong>omy <strong>on</strong> <strong>on</strong>e hand but are also resp<strong>on</strong>sible for <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>taminati<strong>on</strong> in cott<strong>on</strong><br />
such as <str<strong>on</strong>g>of</str<strong>on</strong>g> hair, jute, colored cloth, polypropylene etc.<br />
There are markets in almost all small towns in <str<strong>on</strong>g>the</str<strong>on</strong>g> rural area where growers<br />
send <str<strong>on</strong>g>the</str<strong>on</strong>g>ir cott<strong>on</strong> and all agricultural products for sale through <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
commissi<strong>on</strong> agents. Cott<strong>on</strong> is stored <strong>on</strong> open platforms and <str<strong>on</strong>g>of</str<strong>on</strong>g>fered for<br />
aucti<strong>on</strong> in small lots. In <str<strong>on</strong>g>the</str<strong>on</strong>g>se markets different varieties <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> are mixed<br />
with each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r before reaching <str<strong>on</strong>g>the</str<strong>on</strong>g> ginning factories. All this is d<strong>on</strong>e by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
245
private sector and <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a vast need for improvement, by applying new<br />
techniques for <str<strong>on</strong>g>the</str<strong>on</strong>g> handling and transportati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> from farm to market.<br />
7. Cott<strong>on</strong> Ginning<br />
The entire cott<strong>on</strong> ginning industry, with about 1200 ginning units, is owned<br />
and operated by <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector in Pakistan except for three government<br />
ginneries set up for <str<strong>on</strong>g>the</str<strong>on</strong>g>ir seed programs. Some <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>se ginning units are run<br />
by people whose families have been ginning for generati<strong>on</strong>s. In additi<strong>on</strong>,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>re are new owners every year.<br />
Pakistan’s ginning sector is not as efficient as it could be. Due to a lack <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
quality ginning machinery much more power is drawn and c<strong>on</strong>sumed in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
entire ginning operati<strong>on</strong> including pneumatics, ginning, and bale pressing. No<br />
automati<strong>on</strong> process exist in <str<strong>on</strong>g>the</str<strong>on</strong>g> Pakistani ginning envir<strong>on</strong>ment and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
c<strong>on</strong>cept <str<strong>on</strong>g>of</str<strong>on</strong>g> ‘Intelligin’ is altoge<str<strong>on</strong>g>the</str<strong>on</strong>g>r absent. The c<strong>on</strong>cept <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> efficient<br />
working <str<strong>on</strong>g>of</str<strong>on</strong>g> machines such as gins, pre and post cleaners and <str<strong>on</strong>g>the</str<strong>on</strong>g> impact <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
moisture, trash and inputs <strong>on</strong> it are not as refined and researched as in many<br />
o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries. BMR in <str<strong>on</strong>g>the</str<strong>on</strong>g> Pakistan Cott<strong>on</strong> Ginning industry is badly<br />
needed to bringing it to world standards.<br />
8. Ginning Machinery Manufacturing<br />
Since all ginning machinery is locally made, Pakistan lacks <str<strong>on</strong>g>the</str<strong>on</strong>g> expertise to<br />
make quality ginning machinery which could gin world class cott<strong>on</strong>. In <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
absence <str<strong>on</strong>g>of</str<strong>on</strong>g> material sciences and <str<strong>on</strong>g>the</str<strong>on</strong>g> availability <str<strong>on</strong>g>of</str<strong>on</strong>g> light and str<strong>on</strong>g alloys, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
performance <str<strong>on</strong>g>of</str<strong>on</strong>g> ginning machinery is not good.<br />
At present a government organizati<strong>on</strong>, “Small and Medium Enterprises<br />
<strong>Development</strong> Authority” called SMEDA, is running a project to up-grade<br />
Pakistan’s cott<strong>on</strong> ginning machinery. All <str<strong>on</strong>g>the</str<strong>on</strong>g> work is in <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector,<br />
SMEDA <strong>on</strong>ly provides technical assistance. There is a need for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
development and manufacture <str<strong>on</strong>g>of</str<strong>on</strong>g> quality cott<strong>on</strong> ginning machinery in private<br />
sector.<br />
9. Formal Ginning Training<br />
There has been a lot <str<strong>on</strong>g>of</str<strong>on</strong>g> talk regarding providing formal training in <str<strong>on</strong>g>the</str<strong>on</strong>g> field <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
ginning. There is a need for <str<strong>on</strong>g>the</str<strong>on</strong>g> establishment <str<strong>on</strong>g>of</str<strong>on</strong>g> a ginning institute which<br />
could train pers<strong>on</strong>nel in <str<strong>on</strong>g>the</str<strong>on</strong>g> field <str<strong>on</strong>g>of</str<strong>on</strong>g> selecti<strong>on</strong>, grading, machinery operati<strong>on</strong><br />
and maintenance.<br />
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10. Cott<strong>on</strong> Standards and Evaluati<strong>on</strong> Centers<br />
Pakistan Cott<strong>on</strong> Standard Institute –a government sector entity, is mainly<br />
resp<strong>on</strong>sible to design and uphold standards for cott<strong>on</strong>. It developed its<br />
standards with <str<strong>on</strong>g>the</str<strong>on</strong>g> help <str<strong>on</strong>g>of</str<strong>on</strong>g> internati<strong>on</strong>al organizati<strong>on</strong>s such as FAO. Pakistan<br />
Cott<strong>on</strong> Standards have been approved by many internati<strong>on</strong>al cott<strong>on</strong><br />
organisati<strong>on</strong>s.<br />
Pakistan Cott<strong>on</strong> Standard Institute has <strong>on</strong>ly two cott<strong>on</strong> classing labs with HVI<br />
machines. Almost all <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning mills have <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own cott<strong>on</strong> testing labs but<br />
ginners do not have easy access to testing labs. In c<strong>on</strong>trast to <str<strong>on</strong>g>the</str<strong>on</strong>g> practice in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> USA and Australia where each and every bale is tested, most Pakistani<br />
ginners seldom get <str<strong>on</strong>g>the</str<strong>on</strong>g>ir products tested at all. And even if some ginneries get<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>ir product tested, it is tested <strong>on</strong>ly <strong>on</strong>ce for each lot (100 bales). Great<br />
progress can be achieved by establishing such labs and cott<strong>on</strong> evaluati<strong>on</strong><br />
centers in <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector.<br />
11. Cott<strong>on</strong> Trade and Export: Role <str<strong>on</strong>g>of</str<strong>on</strong>g> Public & Private Sectors<br />
Almost all <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> ginned within Pakistan is purchased by <str<strong>on</strong>g>the</str<strong>on</strong>g> Pakistani<br />
spinning industry a 100% private sector entity. Even this year, in <str<strong>on</strong>g>the</str<strong>on</strong>g> wake <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
a bumper cott<strong>on</strong> crop crossing 14.312 milli<strong>on</strong> bales (167.72 kg), <str<strong>on</strong>g>the</str<strong>on</strong>g> market is<br />
still bullish and Pakistani spinners are ready to bid for every available lot at<br />
comparable internati<strong>on</strong>al rates. In <str<strong>on</strong>g>the</str<strong>on</strong>g> presence <str<strong>on</strong>g>of</str<strong>on</strong>g> numerous private sector<br />
exporters, not all <str<strong>on</strong>g>of</str<strong>on</strong>g> which were reliable business houses, <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
exports is questi<strong>on</strong>able and no reliable agency has <str<strong>on</strong>g>the</str<strong>on</strong>g> expertise or visi<strong>on</strong> to<br />
determine its quality. This made most <str<strong>on</strong>g>of</str<strong>on</strong>g> internati<strong>on</strong>al houses shy away from<br />
buying Pakistani raw cott<strong>on</strong>.<br />
However, in this regard credit must be given to <str<strong>on</strong>g>the</str<strong>on</strong>g> Trading Corporati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Pakistan (T.C.P.) a government entity which intervened during <str<strong>on</strong>g>the</str<strong>on</strong>g> 2004-05<br />
cott<strong>on</strong> seas<strong>on</strong> when prices were about to go down. They bought some <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
cott<strong>on</strong> which again stabilized <str<strong>on</strong>g>the</str<strong>on</strong>g> price and restored buying c<strong>on</strong>fidence. The<br />
role <str<strong>on</strong>g>of</str<strong>on</strong>g> T.C.P., is appreciated by cott<strong>on</strong> people and <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a general<br />
c<strong>on</strong>sensus that this organizati<strong>on</strong> should stay alive to support <str<strong>on</strong>g>the</str<strong>on</strong>g> market and<br />
farmers in <str<strong>on</strong>g>the</str<strong>on</strong>g> wake <str<strong>on</strong>g>of</str<strong>on</strong>g> an abnormal drop in prices- which are, most <str<strong>on</strong>g>of</str<strong>on</strong>g>ten,<br />
temporary.<br />
12. Spinning<br />
Pakistan’s spinning industry is c<strong>on</strong>sidered quite efficient as almost all <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
machinery used by spinning mills is imported and works efficiently. Pakistani<br />
247
spinners have achieved a high level <str<strong>on</strong>g>of</str<strong>on</strong>g> BMR recently and have updated and<br />
improved <str<strong>on</strong>g>the</str<strong>on</strong>g>ir operati<strong>on</strong>s remarkably. It is probably <str<strong>on</strong>g>the</str<strong>on</strong>g> issue <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong><br />
c<strong>on</strong>taminati<strong>on</strong> which hampers <str<strong>on</strong>g>the</str<strong>on</strong>g>ir efficiency and makes <str<strong>on</strong>g>the</str<strong>on</strong>g>m uncompetitive<br />
to some extent. Removing c<strong>on</strong>taminati<strong>on</strong> at <str<strong>on</strong>g>the</str<strong>on</strong>g> mills is a cost and time<br />
intensive operati<strong>on</strong> and it slows down producti<strong>on</strong>.<br />
Looking at <str<strong>on</strong>g>the</str<strong>on</strong>g> 9.6 milli<strong>on</strong> spindles in 455 spinning mills <str<strong>on</strong>g>of</str<strong>on</strong>g> Pakistan, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is<br />
a dire need for spinning and textile machinery to be produced locally.Pakistan<br />
produces more yarn than its c<strong>on</strong>sumpti<strong>on</strong> and ends up exporting most <str<strong>on</strong>g>of</str<strong>on</strong>g> it –<br />
sometimes at very cheap rates. This calls for more weaving units. Vertical<br />
integrati<strong>on</strong> is required which would add value to its products.<br />
III. COOPERATION AMONG IDB COTTON PRODUCING<br />
MEMBER COUNTRIES<br />
So far no co-operati<strong>on</strong> exists or seems to exist am<strong>on</strong>g cott<strong>on</strong> producing IDB<br />
member countries. Islam gave us <str<strong>on</strong>g>the</str<strong>on</strong>g> b<strong>on</strong>d <str<strong>on</strong>g>of</str<strong>on</strong>g> bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rhood. We have<br />
w<strong>on</strong>derful platforms to work toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r <strong>on</strong>, such as <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a need for<br />
closer co-operati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> fields <str<strong>on</strong>g>of</str<strong>on</strong>g> research, trade, joint ventures and helping<br />
each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r in bringing us out <str<strong>on</strong>g>of</str<strong>on</strong>g> any farming or trade related troubles. Now as<br />
we have awareness <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> problems we can facilitate each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r with close cooperati<strong>on</strong><br />
in <str<strong>on</strong>g>the</str<strong>on</strong>g> fields <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> farming to finished products. Close cooperati<strong>on</strong><br />
am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector <str<strong>on</strong>g>of</str<strong>on</strong>g> IDB member countries is a requirement<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> time.<br />
248
COTTON CULTIVATION IN THE REPUBLIC OF MALI<br />
Mahamdou Cisse<br />
Director, Cott<strong>on</strong> Global Ltd., Mali<br />
(Original in French)<br />
I. QUALITY OF COTTON PRODUCTION<br />
Cott<strong>on</strong> producti<strong>on</strong> in Mali is c<strong>on</strong>sidered <str<strong>on</strong>g>the</str<strong>on</strong>g> driving force <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy and<br />
rural development in <str<strong>on</strong>g>the</str<strong>on</strong>g> areas where <str<strong>on</strong>g>the</str<strong>on</strong>g> Malian Textile <strong>Development</strong><br />
Company (CMDT) and <str<strong>on</strong>g>the</str<strong>on</strong>g> Upper River Niger Bureau (OHVN) are active.<br />
Cott<strong>on</strong> producti<strong>on</strong> is <str<strong>on</strong>g>the</str<strong>on</strong>g> major source <str<strong>on</strong>g>of</str<strong>on</strong>g> income for <str<strong>on</strong>g>the</str<strong>on</strong>g> farmers, so its<br />
extensi<strong>on</strong> helps to improve <str<strong>on</strong>g>the</str<strong>on</strong>g> living c<strong>on</strong>diti<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> people. Over <str<strong>on</strong>g>the</str<strong>on</strong>g> past<br />
50 years, <str<strong>on</strong>g>the</str<strong>on</strong>g> CFDT, currently called DAGRIS, and <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT have tried to<br />
reach <str<strong>on</strong>g>the</str<strong>on</strong>g> largest number <str<strong>on</strong>g>of</str<strong>on</strong>g> villages and farms in <str<strong>on</strong>g>the</str<strong>on</strong>g> area. Owing to this mass<br />
development policy, all farmers have gradually become cott<strong>on</strong> producers. In<br />
fact, cott<strong>on</strong> producti<strong>on</strong> systems have been generalized in many regi<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
sou<str<strong>on</strong>g>the</str<strong>on</strong>g>rn Mali. This has helped modernize agricultural farms and improve <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
living c<strong>on</strong>diti<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> inhabitants.<br />
However, this strategy has reached its limits because it is increasingly<br />
difficult to combine mass development and quality. There are huge<br />
discrepancies between farms, soil, proper handling techniques and harvests<br />
(low yield, uneven soil rotati<strong>on</strong>, obsolete methods <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> collecti<strong>on</strong>, labour<br />
capacity, and l<strong>on</strong>g periods <str<strong>on</strong>g>of</str<strong>on</strong>g> harvests). As a result, we are witnessing low<br />
cott<strong>on</strong> standards and average cott<strong>on</strong> fibre. The CMDT’s promoti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong><br />
cultivati<strong>on</strong> should, in <str<strong>on</strong>g>the</str<strong>on</strong>g> medium term, seek to identify agricultural and<br />
envir<strong>on</strong>mental z<strong>on</strong>es and <str<strong>on</strong>g>the</str<strong>on</strong>g> farms that better satisfy <str<strong>on</strong>g>the</str<strong>on</strong>g> requirements <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
quality cott<strong>on</strong> producti<strong>on</strong>. C<strong>on</strong>tinued cott<strong>on</strong> cultivati<strong>on</strong> in areas <str<strong>on</strong>g>of</str<strong>on</strong>g> low rain<br />
fall and <str<strong>on</strong>g>the</str<strong>on</strong>g> training <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers that are ill equipped in oxen drawn ploughs<br />
and remote from decisi<strong>on</strong> making areas cause financial losses for both <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
farmers and <str<strong>on</strong>g>the</str<strong>on</strong>g> society. Because <str<strong>on</strong>g>of</str<strong>on</strong>g> low yield, cott<strong>on</strong> producers cannot repay<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>ir debts.<br />
The cott<strong>on</strong> fibre obtained is <str<strong>on</strong>g>of</str<strong>on</strong>g> poor quality (lack <str<strong>on</strong>g>of</str<strong>on</strong>g> fertilizers and<br />
immaturity), and <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> collecting and processing cott<strong>on</strong> is very high.<br />
The extensi<strong>on</strong> policy must be streamlined with <str<strong>on</strong>g>the</str<strong>on</strong>g> producers’ technical<br />
standard, with <str<strong>on</strong>g>the</str<strong>on</strong>g> quantity produced and <str<strong>on</strong>g>the</str<strong>on</strong>g> land area where <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> is<br />
collected, and <str<strong>on</strong>g>the</str<strong>on</strong>g> viability <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> activity. The private sector should also be<br />
more involved in <str<strong>on</strong>g>the</str<strong>on</strong>g> privatizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> industry.<br />
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II. THE PRIVATE SECTOR AND THE PRODUCTION OF COTTON<br />
SEED<br />
Mali's partners have agreed <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> need to enhance <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> and<br />
management <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> seeds. The seeds c<strong>on</strong>stitute <str<strong>on</strong>g>the</str<strong>on</strong>g> back b<strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> this<br />
agricultural activity and increases <str<strong>on</strong>g>the</str<strong>on</strong>g> quantity and improves <str<strong>on</strong>g>the</str<strong>on</strong>g> technical<br />
characteristics <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> fibre. It has emerged in discussi<strong>on</strong>s that serious<br />
disrupti<strong>on</strong>s cause loss in seed producti<strong>on</strong> in factories <str<strong>on</strong>g>the</str<strong>on</strong>g>reby nullifying<br />
efforts to increase cott<strong>on</strong> seeds through selecti<strong>on</strong> and m<strong>on</strong>itoring. Bags <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
seeds are not properly stored. Farmer associati<strong>on</strong>s manage seeds in a<br />
disorderly manner <str<strong>on</strong>g>the</str<strong>on</strong>g>reby compelling <str<strong>on</strong>g>the</str<strong>on</strong>g>m to always request an increase in<br />
quantity per hectare. The private sector must draw up a strategy designed to<br />
choose cott<strong>on</strong> varieties and manage cott<strong>on</strong> seeds. Measures to increase Seed<br />
Producti<strong>on</strong> are:<br />
• Set up an internal multi-disciplinary c<strong>on</strong>sultative body in <str<strong>on</strong>g>the</str<strong>on</strong>g> CMDT<br />
that will choose cott<strong>on</strong> varieties<br />
• Ga<str<strong>on</strong>g>the</str<strong>on</strong>g>r informati<strong>on</strong> about <str<strong>on</strong>g>the</str<strong>on</strong>g> market, trends and expectati<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
weavers c<strong>on</strong>cerning <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> fibre, and progress <str<strong>on</strong>g>of</str<strong>on</strong>g> research <strong>on</strong><br />
cott<strong>on</strong> varieties<br />
• Establish a seed multiplicati<strong>on</strong> centre during <str<strong>on</strong>g>the</str<strong>on</strong>g> <str<strong>on</strong>g>of</str<strong>on</strong>g>f seas<strong>on</strong>.<br />
• Install a small factory that gins cott<strong>on</strong> seeds and c<strong>on</strong>ducts tests and<br />
research <strong>on</strong> cott<strong>on</strong> ginning<br />
• Install a unit for scraping cott<strong>on</strong> lint<br />
• Encourage <str<strong>on</strong>g>the</str<strong>on</strong>g> introducti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> genetically modified cott<strong>on</strong> varieties in<br />
collaborati<strong>on</strong> with researchers<br />
1. The Private Sector and Phytosanitary Producti<strong>on</strong><br />
Phytosanitary protecti<strong>on</strong> is essential for <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> seeds,<br />
especially when it comes to greater productivity. It is <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector that<br />
should supply pesticides to <str<strong>on</strong>g>the</str<strong>on</strong>g> producers so that <str<strong>on</strong>g>the</str<strong>on</strong>g>y can take advantage <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> market i.e. supply and demand.<br />
i. Cott<strong>on</strong> Ginning<br />
• <str<strong>on</strong>g>Meeting</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> requirements <str<strong>on</strong>g>of</str<strong>on</strong>g> introducing cott<strong>on</strong> seed in <str<strong>on</strong>g>the</str<strong>on</strong>g> ginning<br />
chain is a good way <str<strong>on</strong>g>of</str<strong>on</strong>g> using <str<strong>on</strong>g>the</str<strong>on</strong>g> ginnery.<br />
• Supplying <str<strong>on</strong>g>the</str<strong>on</strong>g> ginnery with bales <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong><br />
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Not <strong>on</strong>ly do cott<strong>on</strong> bales increase <str<strong>on</strong>g>the</str<strong>on</strong>g> ginning rate through regular supply,<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>y also eliminate dirt because <str<strong>on</strong>g>the</str<strong>on</strong>g>y prevent <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> from falling to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
ground.<br />
ii. Cott<strong>on</strong> Ginning According to Homogeneous Areas<br />
Officials <str<strong>on</strong>g>of</str<strong>on</strong>g> factories that gin cott<strong>on</strong> according to agro-climatic regi<strong>on</strong>s should<br />
do so as so<strong>on</strong> as possible in order to ensure that cott<strong>on</strong> fibre is produced in<br />
homogeneous packages. It is advisable that cott<strong>on</strong> ginneries be installed<br />
according to agro-climatic regi<strong>on</strong>s so that cott<strong>on</strong> fibre can be produced<br />
homogeneously. This would help standardize and better c<strong>on</strong>trol <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> fibre produced.<br />
iii. Streamlined Ginning<br />
Although <str<strong>on</strong>g>the</str<strong>on</strong>g> ginning rate prescribed by designers (12-15 bales/hour per<br />
ginner) helps to make <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> machine more pr<str<strong>on</strong>g>of</str<strong>on</strong>g>itable, factories<br />
generally operate at a slower rate <str<strong>on</strong>g>of</str<strong>on</strong>g> 10 bales per hour per ginner so as to<br />
maintain <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> fibre: good silk length, good uniformity,<br />
fewer neps and less preparati<strong>on</strong>. Ginnery <str<strong>on</strong>g>of</str<strong>on</strong>g>ficials know exactly how to adapt<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g>ir ginning rate to <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> received and <str<strong>on</strong>g>the</str<strong>on</strong>g> equipment<br />
available.<br />
2. The Private Sector and Cott<strong>on</strong> Transport<br />
To ensure that cott<strong>on</strong> ginneries operate at full capacity, <str<strong>on</strong>g>the</str<strong>on</strong>g>y must be supplied<br />
with raw materials by a good fleet <str<strong>on</strong>g>of</str<strong>on</strong>g> mechanically slow solid vehicles.<br />
C<strong>on</strong>sidering <str<strong>on</strong>g>the</str<strong>on</strong>g> huge volume <str<strong>on</strong>g>of</str<strong>on</strong>g> investments, <str<strong>on</strong>g>the</str<strong>on</strong>g> government must adopt,<br />
through <str<strong>on</strong>g>the</str<strong>on</strong>g> banks, a voluntary policy toward promoters. This will definitely<br />
help to reduce transport costs and ensure <str<strong>on</strong>g>the</str<strong>on</strong>g> raw material is <str<strong>on</strong>g>of</str<strong>on</strong>g> good quality.<br />
III. THE PRIVATE SECTOR AND COTTON FIBER CLASSIFICATION<br />
Over <str<strong>on</strong>g>the</str<strong>on</strong>g> past decade most African cott<strong>on</strong> companies have d<strong>on</strong>e a lot to<br />
classify <str<strong>on</strong>g>the</str<strong>on</strong>g>ir infrastructure, equipment and human resources. Classing can be<br />
improved by:<br />
• Sp<strong>on</strong>soring and training <str<strong>on</strong>g>of</str<strong>on</strong>g> classing <str<strong>on</strong>g>of</str<strong>on</strong>g>ficers by experts<br />
• Enrolling classing <str<strong>on</strong>g>of</str<strong>on</strong>g>ficers at <str<strong>on</strong>g>the</str<strong>on</strong>g> Memphis Cott<strong>on</strong> Institute<br />
• C<strong>on</strong>ducting study trips am<strong>on</strong>g classing departments in countries <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> sub-regi<strong>on</strong>.<br />
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• Modernized Classing Services<br />
Although c<strong>on</strong>venti<strong>on</strong>al classing is still <str<strong>on</strong>g>the</str<strong>on</strong>g> method used to c<strong>on</strong>stitute batches,<br />
major cott<strong>on</strong> firms have been equipped with HVI series and <str<strong>on</strong>g>the</str<strong>on</strong>g> AFIS system.<br />
The use <str<strong>on</strong>g>of</str<strong>on</strong>g> this equipment can help provide informati<strong>on</strong> that is more rati<strong>on</strong>al<br />
than <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>e provided through c<strong>on</strong>venti<strong>on</strong>al classing. For every producti<strong>on</strong><br />
sector, <strong>on</strong>e can m<strong>on</strong>itor <str<strong>on</strong>g>the</str<strong>on</strong>g> progress <str<strong>on</strong>g>of</str<strong>on</strong>g> quality according to technological<br />
specificati<strong>on</strong>s measured by HVI: micr<strong>on</strong>, extensi<strong>on</strong>, colour, brightness,<br />
quantity <str<strong>on</strong>g>of</str<strong>on</strong>g> dirt. If <str<strong>on</strong>g>the</str<strong>on</strong>g> informati<strong>on</strong> is used properly, <strong>on</strong>e can anticipate<br />
problems related to quality, provide <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> research units with good<br />
informati<strong>on</strong> about variety selecti<strong>on</strong> and assess better <str<strong>on</strong>g>the</str<strong>on</strong>g> genuineness <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
claims made by customers.<br />
Once installati<strong>on</strong>, training, and <str<strong>on</strong>g>the</str<strong>on</strong>g> mastering <str<strong>on</strong>g>of</str<strong>on</strong>g> measurement instruments are<br />
completed, <str<strong>on</strong>g>the</str<strong>on</strong>g> equipped cott<strong>on</strong> firms can seek to improve <str<strong>on</strong>g>the</str<strong>on</strong>g> maintenance <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> equipment and devise standardized procedures and exact measures. The<br />
private sector can also take part in <str<strong>on</strong>g>the</str<strong>on</strong>g> classing process, especially with regard<br />
to expertise.<br />
IV. CONCLUSION<br />
The privatizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> African cott<strong>on</strong> industry is necessary to ensure<br />
sustainable producti<strong>on</strong>, but it should be d<strong>on</strong>e in a streamlined manner<br />
according to a “method approach and quality”. In a market where supply is in<br />
excess and whose mechanisms are deregulated by subsidies, better quality is<br />
not <strong>on</strong>ly a requirement for <str<strong>on</strong>g>the</str<strong>on</strong>g> customer but also for pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>als <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
cott<strong>on</strong> industry as <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> surest ways <str<strong>on</strong>g>of</str<strong>on</strong>g> addressing a difficult situati<strong>on</strong><br />
while preparing for <str<strong>on</strong>g>the</str<strong>on</strong>g> future. In this quest for quality, all <str<strong>on</strong>g>the</str<strong>on</strong>g> phases <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
producti<strong>on</strong> line are involved: researchers, farmers, extensi<strong>on</strong> workers,<br />
forwarding agents must come toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r to preserve and improve <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> produce introduced into <str<strong>on</strong>g>the</str<strong>on</strong>g> marketBetter quality requires c<strong>on</strong>stant efforts<br />
and huge investments. This also means that cott<strong>on</strong> companies must develop a<br />
global visi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> requirements <str<strong>on</strong>g>of</str<strong>on</strong>g> quality and c<strong>on</strong>sider <str<strong>on</strong>g>the</str<strong>on</strong>g> comp<strong>on</strong>ents <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
an enterprising project. This comprises several parts ranging from major<br />
stages to <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> and its delivery to <str<strong>on</strong>g>the</str<strong>on</strong>g> final customers.<br />
Quality <str<strong>on</strong>g>of</str<strong>on</strong>g> an enterprise depends <strong>on</strong>:<br />
• Producti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong><br />
• Transport from <str<strong>on</strong>g>the</str<strong>on</strong>g> field to <str<strong>on</strong>g>the</str<strong>on</strong>g> ginnery<br />
• Delivery <str<strong>on</strong>g>of</str<strong>on</strong>g> bales to <str<strong>on</strong>g>the</str<strong>on</strong>g> weavers<br />
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The measures taken should all seek to improve <str<strong>on</strong>g>the</str<strong>on</strong>g> quality <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> so as<br />
to obtain <str<strong>on</strong>g>the</str<strong>on</strong>g> best fibre. The o<str<strong>on</strong>g>the</str<strong>on</strong>g>r measures should be c<strong>on</strong>cerned with<br />
harvesting and ginning.<br />
Such measures have an effect <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> grading properties and <str<strong>on</strong>g>the</str<strong>on</strong>g> colour <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
fibre. It is <str<strong>on</strong>g>the</str<strong>on</strong>g> characteristics <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> emerging from <str<strong>on</strong>g>the</str<strong>on</strong>g> ginning process<br />
that <str<strong>on</strong>g>the</str<strong>on</strong>g> weaver or <str<strong>on</strong>g>the</str<strong>on</strong>g> trader will buy and not <str<strong>on</strong>g>the</str<strong>on</strong>g> fibre. However, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
customer should receive clean, unadulterated and well packaged bales <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
cott<strong>on</strong> and a fibre that is exempt <str<strong>on</strong>g>of</str<strong>on</strong>g> all forms <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>taminati<strong>on</strong>.<br />
Customer c<strong>on</strong>fidence and <str<strong>on</strong>g>the</str<strong>on</strong>g> reputati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> producer will grow <strong>on</strong>ce<br />
producti<strong>on</strong>, ginning and delivery take <str<strong>on</strong>g>the</str<strong>on</strong>g>se c<strong>on</strong>cerns into c<strong>on</strong>siderati<strong>on</strong>.<br />
“Quality is not affected by crisis”.<br />
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Background<br />
COTTON IN TURKEY<br />
Tugrul Yemisci & Hamdi Bagci<br />
Izmir Mercantile Exchange & Turkish Derivatives Exchange<br />
In <str<strong>on</strong>g>the</str<strong>on</strong>g> light <str<strong>on</strong>g>of</str<strong>on</strong>g> developments in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector <str<strong>on</strong>g>of</str<strong>on</strong>g> Turkey, below are<br />
proposals devoted to improve <str<strong>on</strong>g>the</str<strong>on</strong>g> cooperati<strong>on</strong> between <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>Islamic</strong><br />
<strong>Development</strong> Bank and cott<strong>on</strong> producing member countries.<br />
I. THE IMPORTANCE OF COTTON AS A STRATEGIC CROP IN<br />
TURKEY<br />
Cott<strong>on</strong> has strategic importance in <str<strong>on</strong>g>the</str<strong>on</strong>g> Turkish Ec<strong>on</strong>omy. Am<strong>on</strong>g agricultural<br />
products, it is <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> leading crops creating a high added value. With<br />
regard to producti<strong>on</strong>, employment and exports, cott<strong>on</strong> has a character <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
fundamental & nodal input for <str<strong>on</strong>g>the</str<strong>on</strong>g> textile and c<strong>on</strong>fecti<strong>on</strong>ary sector which is<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> engine <str<strong>on</strong>g>of</str<strong>on</strong>g> Turkish ec<strong>on</strong>omy. The textile and c<strong>on</strong>fecti<strong>on</strong>ary sectors<br />
comprise 33% <str<strong>on</strong>g>of</str<strong>on</strong>g> total exports and provide employment for 3.5 milli<strong>on</strong><br />
people. There have been c<strong>on</strong>siderable investments in <str<strong>on</strong>g>the</str<strong>on</strong>g> textile and<br />
c<strong>on</strong>fecti<strong>on</strong>ary industry in Turkey. Turkey has 2.8 milli<strong>on</strong> t<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> fibre<br />
producti<strong>on</strong> capacity. Almost 70% <str<strong>on</strong>g>of</str<strong>on</strong>g> this producti<strong>on</strong> capacity uses cott<strong>on</strong> and<br />
short fibre like cott<strong>on</strong>.In Turkey, <strong>on</strong>e hundred thousand growers produce<br />
cott<strong>on</strong>. Cott<strong>on</strong> provides employment for several milli<strong>on</strong> people. Cott<strong>on</strong> seed<br />
is also c<strong>on</strong>sumed as oil and margarine additive. Cott<strong>on</strong> producti<strong>on</strong> provides<br />
raw material for <str<strong>on</strong>g>the</str<strong>on</strong>g> food industry.<br />
II. DEVELOPMENTS IN THE TURKISH COTTON SECTOR<br />
1. <strong>Development</strong>s in Cott<strong>on</strong> Producti<strong>on</strong><br />
Turkey has an important place in <str<strong>on</strong>g>the</str<strong>on</strong>g> world cott<strong>on</strong> market. Turkey is <str<strong>on</strong>g>the</str<strong>on</strong>g> sixth<br />
largest producer country, <str<strong>on</strong>g>the</str<strong>on</strong>g> fifth largest cott<strong>on</strong> c<strong>on</strong>sumer and <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d<br />
largest importer country in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. With regard to <str<strong>on</strong>g>the</str<strong>on</strong>g> changes in domestic<br />
and global prices, fluctuati<strong>on</strong>s in total, <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> area is observed. Due to a<br />
rise in <str<strong>on</strong>g>the</str<strong>on</strong>g> yield, cott<strong>on</strong> producti<strong>on</strong> was enlarged over <str<strong>on</strong>g>the</str<strong>on</strong>g> years. Due to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
impact <str<strong>on</strong>g>of</str<strong>on</strong>g> recent decreases in prices, <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> in Turkey dropped<br />
by 6.7% in <str<strong>on</strong>g>the</str<strong>on</strong>g> 2003/04 seas<strong>on</strong>.In Turkey, it is observed that cott<strong>on</strong><br />
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producti<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> Sou<str<strong>on</strong>g>the</str<strong>on</strong>g>astern Regi<strong>on</strong> has increased significantly due to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
introducti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> GAP(Sou<str<strong>on</strong>g>the</str<strong>on</strong>g>astern Anatolia Project). When <str<strong>on</strong>g>the</str<strong>on</strong>g> GAP is totally<br />
completed, irrigati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> 1.7 milli<strong>on</strong> hectares <str<strong>on</strong>g>of</str<strong>on</strong>g> land and <str<strong>on</strong>g>the</str<strong>on</strong>g> expansi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
cott<strong>on</strong> producti<strong>on</strong> are expected.<br />
Table1. <strong>Development</strong>s in Cott<strong>on</strong> Producti<strong>on</strong> and Yields in Turkey<br />
Seas<strong>on</strong>s Area (000 Ha) Producti<strong>on</strong> (000 T<strong>on</strong>nes) Yield (Kg/Ha)<br />
1980/81 672 500 744<br />
1985/86 660 518 785<br />
1990/91 641 655 1021<br />
1995/96 757 851 1125<br />
2000/01 654 880 1340<br />
2001/02 693 922 1330<br />
2002/03 695 964 1388<br />
2003/04 630 899 1428<br />
2. <strong>Development</strong>s in <str<strong>on</strong>g>the</str<strong>on</strong>g> Cott<strong>on</strong> Trade <str<strong>on</strong>g>of</str<strong>on</strong>g> Turkey<br />
Turkey was a net cott<strong>on</strong> exporter country until <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d half <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> 1980s. From<br />
1985/86, due to <str<strong>on</strong>g>the</str<strong>on</strong>g> developments in <str<strong>on</strong>g>the</str<strong>on</strong>g> textile and c<strong>on</strong>fecti<strong>on</strong>ary sectors, it<br />
started to import cott<strong>on</strong>. In <str<strong>on</strong>g>the</str<strong>on</strong>g> 2001/02 seas<strong>on</strong>, Turkey was <str<strong>on</strong>g>the</str<strong>on</strong>g> largest importer<br />
country in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. The USA and Greece provided 77 % <str<strong>on</strong>g>of</str<strong>on</strong>g> total cott<strong>on</strong> imports<br />
to Turkey in <str<strong>on</strong>g>the</str<strong>on</strong>g> last seas<strong>on</strong>. The share <str<strong>on</strong>g>of</str<strong>on</strong>g> USA in <str<strong>on</strong>g>the</str<strong>on</strong>g> total imports is 60%.<br />
Countries having important shares in total imports are Syria, Turkmenistan, Iraq,<br />
Uzbekistan, Tajikistan, Azerbaijan (<str<strong>on</strong>g>the</str<strong>on</strong>g> members <str<strong>on</strong>g>of</str<strong>on</strong>g> <strong>Islamic</strong> <strong>Development</strong><br />
Bank).There are no restricti<strong>on</strong>s in exports and imports <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>, and no duty is<br />
charged for <str<strong>on</strong>g>the</str<strong>on</strong>g> foreign trade <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>. In o<str<strong>on</strong>g>the</str<strong>on</strong>g>r words, cott<strong>on</strong> is freely traded.<br />
Table 2. <strong>Development</strong> In Cott<strong>on</strong> Foreign Trade <str<strong>on</strong>g>of</str<strong>on</strong>g> Turkey<br />
Seas<strong>on</strong>s Cott<strong>on</strong> Exports (000 T<strong>on</strong>es) Cott<strong>on</strong> Imports (000 T<strong>on</strong>es)<br />
1980/81 228 1<br />
1985/86 68 16<br />
1990/91 164 46<br />
2000/01 21 383<br />
2001/02 20 626<br />
2002/03 68 494<br />
2003/04 77 517<br />
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III. SUBSIDY POLICIES BEING APPLIED IN TURKEY<br />
The cott<strong>on</strong> growers <str<strong>on</strong>g>of</str<strong>on</strong>g> Turkey are supported by <str<strong>on</strong>g>the</str<strong>on</strong>g> government in <str<strong>on</strong>g>the</str<strong>on</strong>g> form <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
direct income support and premium payments. In additi<strong>on</strong>, in recent years, diesel<br />
oil was sold at a reduced tariff. In 1993/94, <str<strong>on</strong>g>the</str<strong>on</strong>g> premium system was put into<br />
effect for <str<strong>on</strong>g>the</str<strong>on</strong>g> first time. Premium payments amounted to 12 US cent/kg for 99/00,<br />
9 US cent/kg 00/01, 4.3 cent/kg for 2001/02, 5.2 cent/kg for 2002//03 and 6.6 cent<br />
for 2003/04. They are determined by taking budget facilities into c<strong>on</strong>siderati<strong>on</strong>.<br />
From <str<strong>on</strong>g>the</str<strong>on</strong>g> 2003/04 seas<strong>on</strong>, it has been observed that producers have started to stop<br />
producing cott<strong>on</strong>. Because <str<strong>on</strong>g>of</str<strong>on</strong>g> this fact, during <str<strong>on</strong>g>the</str<strong>on</strong>g> 2004/05 seas<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> government<br />
decided to increase <str<strong>on</strong>g>the</str<strong>on</strong>g> premium amount in order to maintain <str<strong>on</strong>g>the</str<strong>on</strong>g> sustainability <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
cott<strong>on</strong> producti<strong>on</strong>. The premium was set at 15 cent/kg.<br />
IV. SPOT MARKETS AND FUTURE MARKETS IN TURKEY<br />
Cott<strong>on</strong> prices are being determined at spot markets in Turkey under free<br />
market c<strong>on</strong>diti<strong>on</strong>s. In Turkey, cott<strong>on</strong> is being transacted at about thirty<br />
commodity exchanges. But at many <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>se commodity exchanges, <strong>on</strong>ly <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
registrati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> trade <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> is being accomplished. Every working day,<br />
between 12:00-12:30 pm, at <str<strong>on</strong>g>the</str<strong>on</strong>g> İzmir Mercantile Exchange(İME), demand<br />
and supply faces <str<strong>on</strong>g>of</str<strong>on</strong>g>f under market c<strong>on</strong>diti<strong>on</strong>s in <str<strong>on</strong>g>the</str<strong>on</strong>g> trading pit and <str<strong>on</strong>g>the</str<strong>on</strong>g>n <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
current market price is determined. The textile and clothing industry closely<br />
follow <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> trading prices <str<strong>on</strong>g>of</str<strong>on</strong>g> İME. Apart from that, <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r exchanges<br />
in Turkey utilise İME prices as <str<strong>on</strong>g>the</str<strong>on</strong>g> base index. In Turkey, <str<strong>on</strong>g>the</str<strong>on</strong>g> İzmir<br />
Mercantile Exchange has had a very important role since 1981 in cott<strong>on</strong><br />
trade.<br />
Aside from that, appropriate studies have been initiated for <str<strong>on</strong>g>the</str<strong>on</strong>g> organisati<strong>on</strong><br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> a cott<strong>on</strong> futures exchange in Turkey. On 4 February, 2005 TURDEX<br />
(Turkish Derivatives Exchange) launched. At Turkdex, Cott<strong>on</strong> Future<br />
C<strong>on</strong>tracts traded via an electr<strong>on</strong>ic trading platform.<br />
V. PROBLEMS OF COTTON SECTOR IN TURKEY<br />
The fundamental problem <str<strong>on</strong>g>of</str<strong>on</strong>g> Turkey, which has been <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> leading cott<strong>on</strong><br />
importing countries in recent years, is <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>tinuous increase <str<strong>on</strong>g>of</str<strong>on</strong>g> deficient supply.<br />
Cott<strong>on</strong> c<strong>on</strong>sumpti<strong>on</strong> started to increase rapidly in <str<strong>on</strong>g>the</str<strong>on</strong>g> 1990s, but a proporti<strong>on</strong>al<br />
increase in producti<strong>on</strong> could not be realized. On <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r hand, <str<strong>on</strong>g>the</str<strong>on</strong>g> downward<br />
trend in world cott<strong>on</strong> prices emerged in recent years making imports attractive.<br />
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Cott<strong>on</strong> producers could not compete with producers supported by premium<br />
payments <str<strong>on</strong>g>of</str<strong>on</strong>g> 61 cents per kg in Greece, and 23 cents per kg in USA.<br />
Table 3: Subsidies in USA, EU and Turkey(*)<br />
Seas<strong>on</strong>s USA (USD/kg) Greece (USD/Kg) Turkey (USD/KG)<br />
1999/00 0.23 0.45 0.12<br />
2000/01 0.11 0.35 0.09<br />
2001/02 0.26 0.49 0.04<br />
2002/03 0.23 0.61 0.05<br />
(*):For seed cott<strong>on</strong><br />
As it is known, almost 40% <str<strong>on</strong>g>of</str<strong>on</strong>g> world cott<strong>on</strong> exports is realized by <str<strong>on</strong>g>the</str<strong>on</strong>g> USA. The<br />
dominati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> USA will get higher and higher as l<strong>on</strong>g as <str<strong>on</strong>g>the</str<strong>on</strong>g>y c<strong>on</strong>tinue to provide<br />
subsidies to cott<strong>on</strong> producti<strong>on</strong>. On <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>trary, <str<strong>on</strong>g>the</str<strong>on</strong>g> competitive power <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
developing countries, which do not have sufficient funds to subsidize <str<strong>on</strong>g>the</str<strong>on</strong>g>ir cott<strong>on</strong><br />
producti<strong>on</strong>s, will decrease gradually. The c<strong>on</strong>diti<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> world markets enforce<br />
Turkey to import more and more each year.<br />
Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r factor having an effect <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> increase <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> imports to Turkey is<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> fact that no c<strong>on</strong>taminati<strong>on</strong> is observed particularly in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> imported<br />
from <str<strong>on</strong>g>the</str<strong>on</strong>g> USA. The problem <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>taminati<strong>on</strong> in Turkish cott<strong>on</strong> increased in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> last few years. It caused great financial losses for <str<strong>on</strong>g>the</str<strong>on</strong>g> textile and<br />
c<strong>on</strong>fecti<strong>on</strong>ary sectors.<br />
VI. PROPOSALS FOR IMPROVING COOPERATION BETWEEN<br />
IDB COTTON-PRODUCING MEMBER COUNTRIES<br />
In order for <str<strong>on</strong>g>the</str<strong>on</strong>g> Turkish textile and c<strong>on</strong>fecti<strong>on</strong>ary sector, <str<strong>on</strong>g>of</str<strong>on</strong>g> which <str<strong>on</strong>g>the</str<strong>on</strong>g> basic<br />
raw material is cott<strong>on</strong>, to be able to compete in global markets, it must supply<br />
high quality products at suitable prices.In terms <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong>,<br />
competitiveness with developed countries such as <str<strong>on</strong>g>the</str<strong>on</strong>g> USA&EU countries,<br />
can <strong>on</strong>ly be realized by accelerating technological developments, particularly<br />
improving seeds. By creating sources (funds) for studies aimed at increasing<br />
productivity and reducing producti<strong>on</strong> costs. Important studies <strong>on</strong> new cott<strong>on</strong><br />
species are being carried out by Nazilli Cott<strong>on</strong> Research Institute which has<br />
significant experience in cott<strong>on</strong> improvement studies in Turkey.<br />
Collective seed producti<strong>on</strong> projects supported by mutual financial, and<br />
technological aid programmes can be executed by members countries under<br />
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<str<strong>on</strong>g>the</str<strong>on</strong>g> coordinati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> Turkey. High quality producti<strong>on</strong> and high productivity<br />
will play an important role in increasing <str<strong>on</strong>g>the</str<strong>on</strong>g> power <str<strong>on</strong>g>of</str<strong>on</strong>g> competitiveness. Total<br />
cott<strong>on</strong> exports <str<strong>on</strong>g>of</str<strong>on</strong>g> producer members <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> bank was 2.8 milli<strong>on</strong> t<strong>on</strong>s. This<br />
figure is 38% <str<strong>on</strong>g>of</str<strong>on</strong>g> global exports. Total imports <str<strong>on</strong>g>of</str<strong>on</strong>g> members was 1.9 milli<strong>on</strong><br />
t<strong>on</strong>s. The top three importers were Ind<strong>on</strong>esia, Turkey and Pakistan<br />
respectively.<br />
respect to cott<strong>on</strong> trade, a coordinati<strong>on</strong> model should be developed am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
members by taking import and export potentials into c<strong>on</strong>siderati<strong>on</strong>. For<br />
instance, GSM (General Sales Manager) credits are important factors having<br />
an impact <strong>on</strong> cott<strong>on</strong> exports in <str<strong>on</strong>g>the</str<strong>on</strong>g> USA. The members must be enabled to<br />
export cott<strong>on</strong> in deferred terms under <str<strong>on</strong>g>the</str<strong>on</strong>g> guaranty and sp<strong>on</strong>sorship <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
bank.<br />
It is observed, that a majority <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producing member countries are raw<br />
cott<strong>on</strong> exporters. Particularly a group <str<strong>on</strong>g>of</str<strong>on</strong>g> African countries and Turkic<br />
Republics export cott<strong>on</strong> in raw character, and <str<strong>on</strong>g>the</str<strong>on</strong>g>y can not benefit from <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
added value that <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g>fers. Countries which are cott<strong>on</strong> producers and,<br />
exporters <str<strong>on</strong>g>of</str<strong>on</strong>g> textile and c<strong>on</strong>fecti<strong>on</strong> products in significant volumes are Egypt,<br />
Pakistan, Iran, Uzbekistan and Turkey. While Iran and Uzbekistan <strong>on</strong>ly<br />
export textiles, Egypt, Pakistan and Turkey export both textiles and<br />
c<strong>on</strong>fecti<strong>on</strong>ary.<br />
Turkey’s share <str<strong>on</strong>g>of</str<strong>on</strong>g> textiles exports is 3.1% and c<strong>on</strong>fecti<strong>on</strong>ary exports at 4.4%.<br />
As it is obviously observed, regarding <str<strong>on</strong>g>the</str<strong>on</strong>g> exports <str<strong>on</strong>g>of</str<strong>on</strong>g> textiles and<br />
c<strong>on</strong>fecti<strong>on</strong>ary , am<strong>on</strong>g members countries, Turkey has <str<strong>on</strong>g>the</str<strong>on</strong>g> biggest share in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
world. Turkey can share informati<strong>on</strong> and experience it has in <str<strong>on</strong>g>the</str<strong>on</strong>g> textile and<br />
c<strong>on</strong>fecti<strong>on</strong>ary sector, which were gained due to improvements realized. For<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omies <str<strong>on</strong>g>of</str<strong>on</strong>g> member African countries, cott<strong>on</strong> producti<strong>on</strong> denotes huge<br />
importance. The negative impact <str<strong>on</strong>g>of</str<strong>on</strong>g> subsidies <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> global trade that <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
USA implements and <str<strong>on</strong>g>the</str<strong>on</strong>g> fall <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> prices below normal levels has lead to an<br />
ec<strong>on</strong>omic and social crisis in member countries, mostly in Mali, Benin,<br />
Burkina Faso and Chad where almost 30-40% <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> export incomes <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g>se<br />
countries is about 10-12% <str<strong>on</strong>g>of</str<strong>on</strong>g> total revenue. Within <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO, members<br />
countries must act in a corporate manner against cott<strong>on</strong> subsidies that <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
USA implements.<br />
As a result, if a secretariat (Instituti<strong>on</strong>al Body) is established, it can provide<br />
technical assistance for cott<strong>on</strong> producti<strong>on</strong>, trade and cott<strong>on</strong> productivity.<br />
Turkey may play a leading role in this process. Turkey may transfer its<br />
experience and know-how in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector (regulati<strong>on</strong>, statistics,<br />
informati<strong>on</strong> disseminati<strong>on</strong>, productivity).<br />
259
260
PART FOUR<br />
RECOMMENDATIONS AND ACTION PLAN<br />
261
262
GENERAL FRAMEWORK AND ACTION PLAN FOR ENHANCING<br />
COOPERATION AMONG IDB COTTON-PRODUCING MEMBER<br />
COUNTRIES<br />
I. INTRODUCTION<br />
The <str<strong>on</strong>g>Expert</str<strong>on</strong>g> <str<strong>on</strong>g>Group</str<strong>on</strong>g> <str<strong>on</strong>g>Meeting</str<strong>on</strong>g> (EGM) <strong>on</strong> "Enhancing Producti<strong>on</strong> Efficiency<br />
and Internati<strong>on</strong>al Competitiveness in IDB Cott<strong>on</strong>-Producing Countries"<br />
took place from 12-13 Safar 1426H (22-23 March 2005) at <str<strong>on</strong>g>the</str<strong>on</strong>g> Headquarters<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>Islamic</strong> <strong>Development</strong> Bank (IDB) in Jeddah, Saudi Arabia. The<br />
purpose <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> meeting was to discuss <str<strong>on</strong>g>the</str<strong>on</strong>g> main issues and challenges faced<br />
by <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB cott<strong>on</strong>-producing member countries, propose c<strong>on</strong>crete acti<strong>on</strong>s to<br />
tackle <str<strong>on</strong>g>the</str<strong>on</strong>g>se issues and lay down a General Framework and Acti<strong>on</strong> Plan for<br />
enhancing cooperati<strong>on</strong> am<strong>on</strong>g cott<strong>on</strong>-producing member countries. The EGM<br />
was inaugurated by Dr. Syed Jaafar Aznan, Vice-President (Trade & Policy),<br />
IDB and chaired by Dr. Abdin Mohamed Ali El-Faki, Director General, The<br />
Sudan Cott<strong>on</strong> Company Ltd., Sudan. Eighteen eminent experts from public<br />
and private companies and productivity centers <str<strong>on</strong>g>of</str<strong>on</strong>g> member countries heavily<br />
dependent <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector attended <str<strong>on</strong>g>the</str<strong>on</strong>g> meeting including Benin, Burkina<br />
Faso, Egypt, Mali, Pakistan, Sudan, Syria, Turkey and Uganda.<br />
The EGM emphasized <str<strong>on</strong>g>the</str<strong>on</strong>g> significance <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al ec<strong>on</strong>omies <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
many IDB member countries. These countries shared 29 per cent <str<strong>on</strong>g>of</str<strong>on</strong>g> world<br />
producti<strong>on</strong>, 25 per cent <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>sumpti<strong>on</strong> and 36 per cent <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> traded in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
internati<strong>on</strong>al markets in 2004/05. Cott<strong>on</strong> provides employment opportunities<br />
and generates cash flow in <str<strong>on</strong>g>the</str<strong>on</strong>g> rural sector and provides foreign exchange<br />
earnings ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r from raw cott<strong>on</strong> exports or from value added products. It was<br />
also emphasized that <str<strong>on</strong>g>the</str<strong>on</strong>g> eliminati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> subsidies and quotas will accelerate<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> shift <str<strong>on</strong>g>of</str<strong>on</strong>g> textile manufacturing to countries with lower textile<br />
manufacturing costs. To this end, <str<strong>on</strong>g>the</str<strong>on</strong>g> EGM has developed <str<strong>on</strong>g>the</str<strong>on</strong>g> following<br />
General Framework and Acti<strong>on</strong> Plan for enhancing cooperati<strong>on</strong> am<strong>on</strong>g IDB<br />
cott<strong>on</strong>-producing member countries, particularly in areas related to<br />
productivity and competitiveness.<br />
II. GENERAL FRAMEWORK<br />
Given <str<strong>on</strong>g>the</str<strong>on</strong>g> importance <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> in many IDB member countries, <str<strong>on</strong>g>the</str<strong>on</strong>g> EGM<br />
identified major challenges/c<strong>on</strong>straints faced by <str<strong>on</strong>g>the</str<strong>on</strong>g>se countries in<br />
streng<str<strong>on</strong>g>the</str<strong>on</strong>g>ning <str<strong>on</strong>g>the</str<strong>on</strong>g>ir producti<strong>on</strong> efficiency and internati<strong>on</strong>al competitiveness<br />
263
and priority areas to enhance cooperati<strong>on</strong> am<strong>on</strong>g cott<strong>on</strong>-producing member<br />
countries. The EGM highlighted <str<strong>on</strong>g>the</str<strong>on</strong>g> possible role <str<strong>on</strong>g>of</str<strong>on</strong>g> multilateral financing<br />
instituti<strong>on</strong>s, like <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB.<br />
1. Major Challenges/C<strong>on</strong>straints<br />
The EGM identified <str<strong>on</strong>g>the</str<strong>on</strong>g> following major challenges/c<strong>on</strong>straints in cott<strong>on</strong>producing<br />
member countries.<br />
• Limited access <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> growers to inputs needed for achieving high<br />
yields in many countries, particularly in <str<strong>on</strong>g>the</str<strong>on</strong>g> African cott<strong>on</strong>-producing<br />
countries.<br />
• Poor supply <str<strong>on</strong>g>of</str<strong>on</strong>g> inputs due to insufficient producti<strong>on</strong>, high costs and poor<br />
rural infrastructure.<br />
• High levels <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cost <str<strong>on</strong>g>of</str<strong>on</strong>g> producti<strong>on</strong> for farmers due to a high<br />
dependence <strong>on</strong> pesticide based producti<strong>on</strong> practices and lower yields.<br />
• Limited access to many emerging technologies like <str<strong>on</strong>g>the</str<strong>on</strong>g> use <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
biotechnological applicati<strong>on</strong>s and rapid instrument testing.<br />
• Unavailable means and resources for direct communicati<strong>on</strong>s am<strong>on</strong>g<br />
cott<strong>on</strong>-producing countries.<br />
• Small size <str<strong>on</strong>g>of</str<strong>on</strong>g> growers and fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r fragmentati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> land into smaller<br />
units and difficulty to adopt mechanizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> producti<strong>on</strong> and<br />
harvesting.<br />
• Weak role <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector in cott<strong>on</strong> producti<strong>on</strong>, processing and<br />
allied industries.<br />
• Limited resources for cott<strong>on</strong> research and for credit to meet <str<strong>on</strong>g>the</str<strong>on</strong>g> needs <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
producti<strong>on</strong> operati<strong>on</strong>s.<br />
• Weak instituti<strong>on</strong>s and bureaucratic procedures affecting producti<strong>on</strong> and<br />
research efficiency.<br />
• Inadequate price levels for quality cott<strong>on</strong> produced due to various reas<strong>on</strong>s<br />
such as c<strong>on</strong>taminati<strong>on</strong>.<br />
• Traditi<strong>on</strong>al ways <str<strong>on</strong>g>of</str<strong>on</strong>g> marketing cott<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> slow privatizati<strong>on</strong> process<br />
in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector.<br />
• Weak domestic c<strong>on</strong>sumpti<strong>on</strong> in cott<strong>on</strong>-producing countries, particularly<br />
in African countries.<br />
• High subsidies by developed countries and <str<strong>on</strong>g>the</str<strong>on</strong>g> artificially low level <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
cott<strong>on</strong> prices.<br />
• Insufficient public and private investment due to producti<strong>on</strong> and price<br />
uncertainties.<br />
• Shortage <str<strong>on</strong>g>of</str<strong>on</strong>g> irrigati<strong>on</strong> water and inefficiency in water use in irrigated<br />
cott<strong>on</strong> cultivati<strong>on</strong>.<br />
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2. Priority Areas for Cooperati<strong>on</strong><br />
In order to face <str<strong>on</strong>g>the</str<strong>on</strong>g> challenges and overcome <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>straints, <str<strong>on</strong>g>the</str<strong>on</strong>g> EGM<br />
identified <str<strong>on</strong>g>the</str<strong>on</strong>g> following four major priority areas for cooperati<strong>on</strong>:<br />
i. Producti<strong>on</strong><br />
IDB member countries can enhance productivity and efficiency by learning<br />
from each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r’s experiences in producti<strong>on</strong> practices models, up-to-date<br />
irrigati<strong>on</strong> system, cott<strong>on</strong> standardizati<strong>on</strong> and grading system at <str<strong>on</strong>g>the</str<strong>on</strong>g> ginnery<br />
level, high yielding varieties, certified planting seed, least use <str<strong>on</strong>g>of</str<strong>on</strong>g> pesticides,<br />
biological c<strong>on</strong>trol, agr<strong>on</strong>omic management and transfer <str<strong>on</strong>g>of</str<strong>on</strong>g> technology.<br />
Greater efforts are also needed to enhance <str<strong>on</strong>g>the</str<strong>on</strong>g> technical awareness <str<strong>on</strong>g>of</str<strong>on</strong>g> small<br />
and uneducated farmers in increasing <str<strong>on</strong>g>the</str<strong>on</strong>g> quantity and quality <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong>.<br />
ii. Marketing<br />
IDB cott<strong>on</strong>-producing member countries may cooperate to enhance domestic<br />
c<strong>on</strong>sumpti<strong>on</strong> and promote exports. They can help each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r to promote an<br />
orderly and efficient marketing <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> by developing, disseminating, and<br />
encouraging <str<strong>on</strong>g>the</str<strong>on</strong>g> use <str<strong>on</strong>g>of</str<strong>on</strong>g> universal cott<strong>on</strong> classificati<strong>on</strong> standards, and by<br />
sharing market news that meets <str<strong>on</strong>g>the</str<strong>on</strong>g> needs and expectati<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> and<br />
textile industries.<br />
iii. Instituti<strong>on</strong>al <strong>Development</strong><br />
The cott<strong>on</strong> sector suffers from <str<strong>on</strong>g>the</str<strong>on</strong>g> absence <str<strong>on</strong>g>of</str<strong>on</strong>g> specialized instituti<strong>on</strong>s both at<br />
regi<strong>on</strong>al and internati<strong>on</strong>al levels such as an internati<strong>on</strong>al cott<strong>on</strong> research<br />
center, an internati<strong>on</strong>al germplasm center and a regi<strong>on</strong>al cott<strong>on</strong>-classing<br />
laboratory for African countries. While cooperati<strong>on</strong> am<strong>on</strong>g cott<strong>on</strong>-producing<br />
countries is needed to establish <str<strong>on</strong>g>the</str<strong>on</strong>g>se internati<strong>on</strong>al or regi<strong>on</strong>al organizati<strong>on</strong>s,<br />
more effort is required to establish and streng<str<strong>on</strong>g>the</str<strong>on</strong>g>n nati<strong>on</strong>al specialized<br />
instituti<strong>on</strong>s, particularly those dealing with training, research and<br />
development in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> sector. The regulatory envir<strong>on</strong>ment should also be<br />
improved in order to enhance <str<strong>on</strong>g>the</str<strong>on</strong>g> role <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector by adopting<br />
adequate intellectual property rights legislati<strong>on</strong>.<br />
iv. Financing<br />
Cott<strong>on</strong> farmers mostly suffer from <str<strong>on</strong>g>the</str<strong>on</strong>g> poor performance <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> financial<br />
sector in rural areas. In this c<strong>on</strong>text, IDB cott<strong>on</strong>-producing member countries<br />
265
need assistance to establish or streng<str<strong>on</strong>g>the</str<strong>on</strong>g>n commodity funds c<strong>on</strong>tributed for<br />
and managed by farmers <str<strong>on</strong>g>the</str<strong>on</strong>g>mselves to reduce both price and producti<strong>on</strong><br />
uncertainties and to rebuild <str<strong>on</strong>g>the</str<strong>on</strong>g> rural financial facilities for providing<br />
emergency seas<strong>on</strong>al credit and enhancing <str<strong>on</strong>g>the</str<strong>on</strong>g> role <str<strong>on</strong>g>of</str<strong>on</strong>g> small rural savers.<br />
Greater efforts are also needed to finance projects related to infrastructure<br />
development, farm, ginning machinery manufacturing, and export credit<br />
guarantees/financing.<br />
III. ACTION PLAN<br />
Given <str<strong>on</strong>g>the</str<strong>on</strong>g> General Framework for enhancing cooperati<strong>on</strong> am<strong>on</strong>g IDB cott<strong>on</strong>producing<br />
countries, <str<strong>on</strong>g>the</str<strong>on</strong>g> EGM recommended <str<strong>on</strong>g>the</str<strong>on</strong>g> following acti<strong>on</strong>s at<br />
nati<strong>on</strong>al, regi<strong>on</strong>al and IDB/internati<strong>on</strong>al levels to promote cott<strong>on</strong> producti<strong>on</strong><br />
efficiency and competitiveness:<br />
1. Acti<strong>on</strong>s at Nati<strong>on</strong>al Level<br />
The IDB cott<strong>on</strong>-producing member countries may c<strong>on</strong>sider <str<strong>on</strong>g>the</str<strong>on</strong>g> following<br />
acti<strong>on</strong>s:<br />
• Enhance <str<strong>on</strong>g>the</str<strong>on</strong>g> awareness <str<strong>on</strong>g>of</str<strong>on</strong>g> farmers for improving productivity and<br />
producing quality cott<strong>on</strong> through effective means <str<strong>on</strong>g>of</str<strong>on</strong>g> technology transfer.<br />
• Adopt precise measurements <str<strong>on</strong>g>of</str<strong>on</strong>g> quality characteristics through<br />
instrument-based systems.<br />
• Improve ginning which c<strong>on</strong>stitutes <str<strong>on</strong>g>the</str<strong>on</strong>g> weakest link in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> chain.<br />
• Enhance <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector participati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong> chain, including<br />
variety development and seed producti<strong>on</strong>.<br />
• Adopt adequate intellectual property rights legislati<strong>on</strong> in order to enhance<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> role <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector.<br />
• Develop bio-safety regulati<strong>on</strong>s and educate <str<strong>on</strong>g>the</str<strong>on</strong>g> public about <str<strong>on</strong>g>the</str<strong>on</strong>g> new<br />
technologies (biotechnology and o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs) in order to remain competitive in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al cott<strong>on</strong> market.<br />
• Rebuild rural financial facilities with <str<strong>on</strong>g>the</str<strong>on</strong>g> view <str<strong>on</strong>g>of</str<strong>on</strong>g> providing emergency<br />
seas<strong>on</strong>al credit in <str<strong>on</strong>g>the</str<strong>on</strong>g> medium term and enhance <str<strong>on</strong>g>the</str<strong>on</strong>g> role <str<strong>on</strong>g>of</str<strong>on</strong>g> small<br />
producers in <str<strong>on</strong>g>the</str<strong>on</strong>g> rural financial system.<br />
• Undertake suitable measures for greater market liberalizati<strong>on</strong> in order to<br />
enhance cott<strong>on</strong> productivity and internati<strong>on</strong>al competitiveness.<br />
• Provide assistance to improve water use efficiency at <str<strong>on</strong>g>the</str<strong>on</strong>g> farm level.<br />
• Support <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector to enhance domestic raw cott<strong>on</strong> c<strong>on</strong>sumpti<strong>on</strong><br />
for value additi<strong>on</strong>.<br />
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2. Acti<strong>on</strong>s at Regi<strong>on</strong>al Level<br />
IDB cott<strong>on</strong>-producing member countries may bilaterally or multilaterally<br />
c<strong>on</strong>sider <str<strong>on</strong>g>the</str<strong>on</strong>g> following acti<strong>on</strong>s:<br />
• Establish a network <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> researchers and start a cott<strong>on</strong> newsletter,<br />
<strong>on</strong>-line or hard copy, to keep IDB member countries c<strong>on</strong>nected to each<br />
o<str<strong>on</strong>g>the</str<strong>on</strong>g>r.<br />
• Establish a regi<strong>on</strong>al cott<strong>on</strong>-classing laboratory for African countries.<br />
• Streng<str<strong>on</strong>g>the</str<strong>on</strong>g>n transport linkages <str<strong>on</strong>g>of</str<strong>on</strong>g> landlocked cott<strong>on</strong>-producing countries.<br />
3. Acti<strong>on</strong>s at <str<strong>on</strong>g>the</str<strong>on</strong>g> Internati<strong>on</strong>al/IDB <str<strong>on</strong>g>Group</str<strong>on</strong>g> Level<br />
The IDB <str<strong>on</strong>g>Group</str<strong>on</strong>g>, in collaborati<strong>on</strong> with relevant internati<strong>on</strong>al organizati<strong>on</strong>s,<br />
may c<strong>on</strong>sider <str<strong>on</strong>g>the</str<strong>on</strong>g> following acti<strong>on</strong>s:<br />
• Support facilities for sharing experiences and for specialized training in<br />
areas like integrated crop/pest management am<strong>on</strong>g member countries.<br />
• Disseminate informati<strong>on</strong> stories about best practices related to zero<br />
pesticide plant producti<strong>on</strong> in countries like Syria and productivity<br />
enhancement in <str<strong>on</strong>g>the</str<strong>on</strong>g> spinning sector in countries like Pakistan.<br />
• Provide support for cott<strong>on</strong> development programs and projects,<br />
particularly related to marketing and vertical expansi<strong>on</strong>.<br />
• Provide assistance for improving training facilities in cott<strong>on</strong> ginning.<br />
• Support quality farm and ginning machinery manufacturing in IDB<br />
member countries.<br />
• Support commodity funds aimed at reducing cott<strong>on</strong> prices and producti<strong>on</strong><br />
uncertainties through <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al development financing instituti<strong>on</strong>s.<br />
• Sp<strong>on</strong>sor small and short-term research projects related to producti<strong>on</strong> and<br />
fiber quality.<br />
• Facilitate cott<strong>on</strong> intra-exports by providing export credit guarantees/<br />
financing to promote cott<strong>on</strong> trade am<strong>on</strong>g IDB member countries.<br />
• C<strong>on</strong>tribute in upgrading <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> existing germplasm facilities to an<br />
internati<strong>on</strong>al germplasm center <strong>on</strong> cott<strong>on</strong> and prepare a germplasm<br />
catalogue.<br />
4. General Acti<strong>on</strong><br />
Many <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> issues and c<strong>on</strong>cerns expressed by <str<strong>on</strong>g>the</str<strong>on</strong>g> delegates could be resolved<br />
by establishing a commercially viable Internati<strong>on</strong>al Cott<strong>on</strong> Research<br />
Center capable <str<strong>on</strong>g>of</str<strong>on</strong>g> providing a variety <str<strong>on</strong>g>of</str<strong>on</strong>g> cott<strong>on</strong> related services to cott<strong>on</strong>producing<br />
countries. Delegates dem<strong>on</strong>strated str<strong>on</strong>g need for such a center.<br />
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The H<strong>on</strong>orable Delegates,<br />
Bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs and Sister,<br />
CLOSING REMARKS<br />
Dato Syed Jaafar Aznan<br />
Vice President Trade & Policy, IDB<br />
Assalamu Alaikum Wa Rahmatullahi Wa Barakatuh<br />
It is my pleasure to <strong>on</strong>ce again address you <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> occasi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> closing<br />
cerem<strong>on</strong>y <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> <str<strong>on</strong>g>Expert</str<strong>on</strong>g>s <str<strong>on</strong>g>Group</str<strong>on</strong>g> <str<strong>on</strong>g>Meeting</str<strong>on</strong>g> <strong>on</strong> "Enhancing Producti<strong>on</strong><br />
Efficiency and Internati<strong>on</strong>al Competitiveness in IDB Cott<strong>on</strong>-Producing<br />
Member Countries". I would like to c<strong>on</strong>gratulate all <str<strong>on</strong>g>of</str<strong>on</strong>g> you for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
successful outcome, which is <strong>on</strong>ly possible due to your active participati<strong>on</strong> in<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> events <str<strong>on</strong>g>of</str<strong>on</strong>g> this meeting.<br />
It would have been a great h<strong>on</strong>our for me to have been able to attend your<br />
deliberati<strong>on</strong>s in last two days. But my o<str<strong>on</strong>g>the</str<strong>on</strong>g>r engagements have prevented me<br />
from doing so. Never<str<strong>on</strong>g>the</str<strong>on</strong>g>less, this does not change my sense <str<strong>on</strong>g>of</str<strong>on</strong>g> support for<br />
your endeavours.<br />
I have learnt about <str<strong>on</strong>g>the</str<strong>on</strong>g> fruitful discussi<strong>on</strong> where a lot <str<strong>on</strong>g>of</str<strong>on</strong>g> interesting ideas have<br />
come up. I assure you that <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB would carefully look at <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
recommendati<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> EGM and take appropriate follow-up acti<strong>on</strong>. I hope<br />
that all <str<strong>on</strong>g>the</str<strong>on</strong>g> cott<strong>on</strong>-producing member countries would also benefit from your<br />
deliberati<strong>on</strong>s in order to enhance cott<strong>on</strong> productivity and competitiveness. In<br />
fact, this is essential to fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r improve <str<strong>on</strong>g>the</str<strong>on</strong>g>ir share in <str<strong>on</strong>g>the</str<strong>on</strong>g> world cott<strong>on</strong> market.<br />
I am grateful to all <str<strong>on</strong>g>of</str<strong>on</strong>g> you for traveling so l<strong>on</strong>g, to participate in this meeting,<br />
and thank you <strong>on</strong>ce again for all your efforts and c<strong>on</strong>tributi<strong>on</strong>s.<br />
With <str<strong>on</strong>g>the</str<strong>on</strong>g>se remarks I declare <str<strong>on</strong>g>the</str<strong>on</strong>g> meeting closed.<br />
Thank you and Wassalamu Alaikum Wa Rahmatullahi Wa Barakatuh.<br />
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ANNEX<br />
<str<strong>on</strong>g>Expert</str<strong>on</strong>g> <str<strong>on</strong>g>Group</str<strong>on</strong>g> <str<strong>on</strong>g>Meeting</str<strong>on</strong>g> <strong>on</strong><br />
“Enhancing Producti<strong>on</strong> Efficiency and Internati<strong>on</strong>al Competitiveness<br />
in IDB Cott<strong>on</strong>-Producing Member Countries”<br />
12-13 Safar 1426H (22-23 March 2005),IDB Headquarters, Jeddah<br />
Programme<br />
Tuesday, 12 Safar 1426H (22 March 2005)<br />
8:30-9:00: Registrati<strong>on</strong><br />
Inaugurati<strong>on</strong><br />
9:00-9:05: Recitati<strong>on</strong> from <str<strong>on</strong>g>the</str<strong>on</strong>g> Holy Qura’n<br />
9:05-9:10: Welcome and Opening Remarks by Dr. Faiz Mohammad, Director,<br />
Ec<strong>on</strong>omic Policy and Strategic Planning Department<br />
9:10-9:20: Opening Address by Dr. Syed Jaafar Aznan, Vice-President (Trade &<br />
Policy)<br />
9:20-9:30: Electi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Chairman and Drafting Committee<br />
THEME ONE : MAJOR CHALLENGES TO IDB COTTON-PRODUCING MEMBER<br />
COUNTRIES<br />
Sessi<strong>on</strong> 1:<br />
9:30–10:30 : Big Picture<br />
• Presentati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> working Paper by <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>sultant: Dr. Rafiq<br />
Chaudhry, Head <str<strong>on</strong>g>of</str<strong>on</strong>g> Technical Informati<strong>on</strong>, Internati<strong>on</strong>al Cott<strong>on</strong><br />
Advisory Committee (ICAC)<br />
• Discussi<strong>on</strong><br />
THEME TWO: ISSUES RELATED TO COTTON PRODUCTION EFFICIENCY AND<br />
INTERNATIONAL COMPETITIVENESS:<br />
Sessi<strong>on</strong> 2:<br />
10:45–13:00: Country Experiences from <str<strong>on</strong>g>the</str<strong>on</strong>g> African Regi<strong>on</strong><br />
• Presentati<strong>on</strong> by:<br />
- Dr. Fede Blaise, Directeur du CRA-CF, Institut Nati<strong>on</strong>al des<br />
Recherches Agricoles, Ministry <str<strong>on</strong>g>of</str<strong>on</strong>g> Agriculture (Benin)<br />
- Dr. Seydou N. Traoré, Chef de Service, Producti<strong>on</strong> et Appui<br />
Technique /Directi<strong>on</strong> de l’INERA. (Burkina Faso)<br />
- Mr. Ibrahim Malloum, Executive General Manager <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Cott<strong>on</strong>chad, (Chad)<br />
- Dr. Mohamed Ahmed Raafat, Director <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Research<br />
Institute (CRI) (Egypt)<br />
- Dr. Amadou Aly Yattara, Sélecti<strong>on</strong>neur, Chef de programme<br />
cot<strong>on</strong> (IER) (Mali).<br />
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- Dr. El Fadil Abdel Rahman Babiker, Nati<strong>on</strong>al Coordinator<br />
Cott<strong>on</strong> Research Program, Agricultural Research<br />
Corporati<strong>on</strong> (ARC) (Sudan)<br />
- Ms. Nabakka Lubwama Damalie, Cott<strong>on</strong> <strong>Development</strong><br />
Organizati<strong>on</strong> (CDO) Uganda)<br />
• Discussi<strong>on</strong><br />
Sessi<strong>on</strong> 3:<br />
14:00–15:30: Country Experiences from <str<strong>on</strong>g>the</str<strong>on</strong>g> Asian Regi<strong>on</strong><br />
• Presentati<strong>on</strong> by:<br />
- Dr. Ibad Siddiqui, Vice President, Pakistan Central Cott<strong>on</strong><br />
Committee, (PCCC) (Pakistan)<br />
- Dr. Mohamed Nayef Al Salti, Director <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Research<br />
Administrati<strong>on</strong>, Cott<strong>on</strong> Bureau (Syria)<br />
- Dr. Isa Ozkan, Head, Nazili Cott<strong>on</strong> Research Institute (NCRI)<br />
(Turkey).<br />
• Discussi<strong>on</strong><br />
Wednesday, 13 Safar 1426H (23 March 2005)<br />
THEME THREE: ROLE OF PRODUCTIVITY INSTITUTIONS AND PRIVATE SECTOR<br />
IN COTTON SECTOR<br />
Sessi<strong>on</strong> 4:<br />
9:00–10:30: Enhancing <str<strong>on</strong>g>the</str<strong>on</strong>g> Role <str<strong>on</strong>g>of</str<strong>on</strong>g> Nati<strong>on</strong>al Productivity Instituti<strong>on</strong>s<br />
• Presentati<strong>on</strong> by:<br />
- Mr. Balafraj Anis, Morocco Productivity Instituti<strong>on</strong> (Morocco)<br />
- Dr. Saquib Mohyoddin, Nati<strong>on</strong>al Productivity Organizati<strong>on</strong><br />
(Pakistan)<br />
• Discussi<strong>on</strong><br />
Sessi<strong>on</strong> 5:<br />
10:45–13:00: Enhancing <str<strong>on</strong>g>the</str<strong>on</strong>g> Role <str<strong>on</strong>g>of</str<strong>on</strong>g> Private Sector<br />
• Presentati<strong>on</strong> by:<br />
- Mr. Masood Ahmed Majeed, Chief Executive and Director,<br />
Asia Ghee Mills (Pvt) ltd (Pakistan)<br />
- Dr. Abdin Mohamed Ali El Faki, General Director, Sudan<br />
Cott<strong>on</strong> Company Ltd (Sudan)<br />
- Mr. Cissé Mahamadou, Director <str<strong>on</strong>g>of</str<strong>on</strong>g> Cott<strong>on</strong> Global Ltd (Mali)<br />
- Mr. Tugurl Yemisci, Chairman <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Board <str<strong>on</strong>g>of</str<strong>on</strong>g> Directors, Izmir<br />
Mercantile Exchange, (Turkey)<br />
• Discussi<strong>on</strong><br />
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THEME FOUR: RECOMMENDATIONS AND ACTION PLAN<br />
Closing Sessi<strong>on</strong>:<br />
14:00-15:30: Acti<strong>on</strong> Plan for Enhancing Cooperati<strong>on</strong> am<strong>on</strong>g IDB Cott<strong>on</strong>-<br />
Producing Member Countries<br />
• Adopti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Acti<strong>on</strong> Plan: Report by <str<strong>on</strong>g>the</str<strong>on</strong>g> Chairman <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> Drafting<br />
Committee<br />
• Closing Remarks by Dr. Syed Jaafar Aznan, Vice-President<br />
(Trade & Policy).<br />
Note: The EGM was chaired by Dr. Abdin Mohamed Ali El Faki, General Director,<br />
Sudan Cott<strong>on</strong> Company Ltd.<br />
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