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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 />

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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 />

2<br />

3<br />

4<br />

5<br />

6<br />

7<br />

8<br />

9<br />

10<br />

11<br />

12<br />

13<br />

14<br />

15<br />

16<br />

17<br />

18<br />

19<br />

20<br />

21<br />

22<br />

23<br />

24<br />

25<br />

26<br />

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 />

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(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 />

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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 />

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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 />

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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 />

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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 />

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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 />

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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 />

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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 />

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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 />

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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 />

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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 />

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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&