Facilitates Access To Cash Income, Jobs And Improved Livelihoods (Traditional Textiles Industry)

Importance of cotton production and trade in West Africa Karim Hussein Principal Administrator, SWAC, OECD Contribution to WTO Regional Workshop on Cotton, Cotonou 23-24 March 2004 Sahel and West Africa Club / OECD

500 000 to 1 000 000 inhab. 100 000 à 500 000 inhabitants Cities and roads > 2000 000 inhabitants 1 à 2 000 000 inhabitants Main paved roads C.Vert Mauritanie Senegal Gambie G. Bissau Guinea S. Leone Liberia Mali Burkina C. d’Ivoire Ghana Togo Benin Nigeria Niger Chad Cameroon SWAC’s coverage in West Africa 0 1000 km

Where is cotton produced? Mali, Burkina Faso, Côte d’Ivoire 51 % Togo - Benin 20 % Chad - Cameroon 13 % 1.2 million tons in 2003 (lint) 3 main areas Source : SWAC / OECD drawing on FAO data

Production trends for cotton lint 1961 – 2003 (Mt) 1961 1970 1980 1990 2000 2003 WEST AFRICA MALI – BKF –CIV TOG - BEN CHAD - CAM 200 000 t 400 000 t 600 000 t 800 000 t 1000 000 t 1200 000 t Source : FAO.See http://apps.fao.org/faostat/

Export trends for cotton lint 1961 – 2001 (Mt) WEST AFRICA WORLD 100 000 Mt 700 000 Mt 3 700 000 Mt 5 900 000 Mt Logarithmic scale Source : FAO. See http:// apps . fao . org / faostat /

Cotton and the transformation of West African agriculture

Most agricultural & cotton production by family farms

Trend of increased production of key export crops

Cotton linked with increased cereals production

Reliance on traditional export crops is risky

Population growth and urbanisation: increased demand

Cotton remains central to many farming systems

Increased importance of producer voice

Key issue: Has cotton generated an agricultural revolution? Where? How?

Economic and social importance of cotton in West Africa

Draws on West African comparative advantage : high quality, low cost, internationally competitive until recently

Complements production of staples and cereals

Facilitates access to cash income , jobs and improved livelihoods (traditional textiles industry, education, health)

Capitalises on existing infrastructure (e.g. FCFA zone)

Fosters agricultural innovation , even beyond cotton

Contributes to community development and strong POs

But

Risks: climate, volatile markets……

Cotton yeld (kg/ha) 500 1000 1500 62 76 84 97 10 000 30 000 70 000 Maize Production (Mt) From cash crop production to commercial farming : Sikasso zone (Mali) 1962 - 1997 Source : SWAC /OECD (ECOLOC Study of SIKASSO)

Mali : maize and cotton production 1961 – 2003 (Mt 000) Cotton Maize Source : FAO. See http:// apps . fao . org / faostat /

Key stakes according to regional actors

Cotton is special : limited alternatives in the Sahel. It is urgent to find solutions to address price volatility

Diversification is important but insufficient

Actions needed to preserve quality and competitiveness (cost/price )

Scepticism on value-added of new reforms after liberalisation

Foster regional demand and processing

Raise public awareness of potential negative impacts of international trade and agricultural policies

Work to address related challenges facing other sub-sectors and African agriculture as a whole as it integrates with the global economy

New initiatives: some examples

Regional approaches: agricultural support, developing markets, demand, processing capacities and the textile industry

Diversification – identify opportunities to develop alternative agricultural and non-agricultural value-added activities that generate hard currency

Risk management / insurance scheme against price volatility

Mechanisms to monitor impact of subsidies

Trade capacity building initiatives: initiatives to enhance developing country / private sector and producer voice

……… ..

Challenges and questions new initiatives need to address (i) What are the empirical impacts of international agriculture and trade policies on West Africa? (ii) How can West Africa address new competition generated by the adaptation of existing policies and trade regimes? (iii) How can processing really foster a profitable and competitive textile industry in W.A.? Lessons from the past? Who will invest? (iv) How might diversification provide alternative opportunities for adding value - particularly for small farms ? (v) What conditions are required to attract local and foreign investment? (vi) What institutional issues need to be addressed to ensure international negotiation processes help foster agreement that addresses African and international concerns? (vii) Regional initiatives and regional integration?

Thank you Additional resources SWAC web pages on agricultural transformation and cotton www.oecd.org/sah (icon - cotton) www. sahel-club.org /en/agri/ index.htm www. sahel-club.org / fr /index.htm OECD initiative on Policy Coherence for Development www.oecd.org/development/policycoherence DAC guidelines on strengthening trade capacity www.oecd.org/dac/trade

Annexes Supplementary data

Cotton lint Share of National Export Revenue 2001: Examples 6 key producers Source : FAO 32.6% Benin Burkina 49.7% 36.4% Chad Mali 14.6% Togo 11,2% Cameroun 5.8%%

Cotton yield (kg/ha) 500 1000 1500 62 76 84 97 10 000 30 000 70 000 Maize Production (Mt) The Mali case From cash crops to commercial farming in Sikasso 1962-1997 Source : SWAC /OECD (ECOLOC Study of SIKASSO)

Mali : Maize and cotton production 1961 – 2003 (Mt 000) Cotton Maize Source : FAO

Cotton support system favoured high access to agricultural innovation by farmers in the CMDT area: - long term financial and technical support - demand-led innovation process - close extension support - efficient upstream and downstream agricultural services