Discussion Paper

Cotton sector organisation models and their impact on farmer’s productivity and income

Peltzer, Roger / Daniela Röttger
Discussion Paper (4/2013)

Bonn: German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE)

ISBN: 978-3-88985-627-2
Price: 6 €

The cotton sector in different countries of sub-Saharan Africa shows different organisational models, ranging from atomistic competition to monopolistic structures. Each model differs in its type of service provision and purchase agreements offered to smallholder farmers, who are the main producers of cotton in sub-Sahara Africa. As a result there is an ongoing debate over which form of cotton sector organisation offers more benefits to smallholders. This paper contributes to the discussion in comparing different cotton sector organisation models according to well published indicators, e.g. the capability to reduce cotton contamination, the provision of inputs and the increase of yields and incomes of farmers. It also introduces new criteria, such as the capacity to stabilise purchase prices for farmers, the ability to combine cotton and food crop production and the capability to guarantee social and ecological sustainability to cotton textile buyers in the retail sector. The empirical basis of this paper is a rich panel data set from African partners of the Competitive African Cotton Initiative (COMPACI) as well as many years of insight and experience gained through the initiative. COMPACI endeavours to improve the income and living conditions of around 500,000 African cotton farmers in seven countries.