This presentation shows the Support to the cotton sector in Burkina Faso of AFD. A cotton price smoothing scheme is also discussed as a way to facilitate farmers access to markets

1. Contract farming in the cotton sector :
an exemple in the West Africa/Burkina Faso

2. Support to the cotton sector in Burkina Faso :
Moving from a support to increase production to a
more global value chain approach
different stakeholders, different objectives,
different contract.

3. Support the cotton production sector in Burkina
Faso
Two activities to reinforce the cotton value chain in Burkina :
Support to the cotton producers : Project PRFCB
Development of a scheme to manage international price
volatility

4. Support to cotton producers in Burkina Faso
Budget : 21 M€ (of witch 11 provided by AfD as grant) ;
Duration : 5 years (2006-2011)
Delegated contracting authority : UNPC-B (producers union
for cotton sector in Burkina Faso)
Objectives :
Capacity building and institutional support to UNPC-B
Secure the cotton industry procurement
Main activités :
Provision of inputs (credit)
Provision of technical support to producers
Fixation of an annual price for cotton grain

5. At the beginning, individual contact between cotton company and
producers (payment was done when the cotton was delivered), but :
Increase in the number of producers
Increase in producer claims (during the weighing)
Second step : Establishement of producer organisation in charge of :
Buying to the producers
Serve as a group guarantee
Establishing a formal contract with the cotton industry
Other actors :
MFI : Receive the producers payment to be devided between the
producers
Management centres for producer organisations
A basic model progressevely
institutionalized..

6. Agro-industry
Micro
Finance
Institution
s
X
X
X
X
Cotton Producer
Organisation
Cotton
Inputs
Net to pay to
producers :
Cotton price –
inputs price
Credit
management
committee
Management
Centers
… Involving many stakeholders1

7. dd mmmm yyyyTitle of the presentation 7
The cotton price smoothing scheme
Scheme bases :
Rules agreed by the cotton “interprofession”
Special legal vehicle created by AICB : Burkina Cotton
Interprofession (producers organisations + cotton industry)
One-to-one indisputable references : Cotlook A based formula
Externalized management fund : BOA (commercial bank)
Before the cotton campaign : fiber trend price calculation from 5
year moving average world price and adoption of producer price
for the campaign;
At the end according to the actual price : drawing rights for the
ginning companies, replenishment of the fund, complementary
price for the producers
Support of AFD : loan (15 M euros) + grant (3 M euros) to
Burkina Government to be retroceded to the Smoothing Fund
Management Association
1

8. dd mmmm yyyyTitle of the presentation 8
The cotton price smoothing scheme
First results :
A scheme that succeeded in smoothing the yearly cotton
price instability
Good professionnalism in smoothing fund management
Analysis :
An interesting tool, improved recently (2010/2011) to be
able to deal with very high volatility on short period
Implementation in a very disturbed period ; not sufficient
to maintain production

9. Merci de votre attention