Importance of cotton production and trade in West Africa Karim Hussein Principal Administrator, SWAC, OECD

1. Sahel and West Africa Club / OECD 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

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

3. Where is cotton produced? 1.2 million tons in 2003 (lint) 3 main areas Mali, Burkina Faso, Côte d’Ivoire51 % Chad - Cameroon13 % Togo - Benin20 % Source : SWAC / OECD drawing on FAO data

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

5. Export trends for cotton lint1961 – 2001 (Mt) Logarithmic scale WORLD 5 900 000 Mt 3 700 000 Mt 700 000 Mt WEST AFRICA 100 000 Mt Source : FAO. See http://apps.fao.org/faostat/

6. 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?

7. 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……

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

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

10. 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

11. 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 • ………..

12. 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?

13. 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

14. Annexes Supplementary data

15. Burkina Benin 32.6% 49.7% Togo Mali Cameroun Chad 11,2% 5.8%% 14.6% 36.4% Cotton lintShare of National Export Revenue2001: Examples 6 key producers Source : FAO

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

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

18. Agricultural innovation and cotton production in Mali • 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 • Agricultural revolution in this zone • CMDT facing new reforms, cuts and privatisation: what perspectives for cotton farmers?