Throughout much of francophone West Africa, cotton is a major export crop, bringing in significant foreign exchange earnings and providing livelihoods for millions of small-scale farmers. From the days of French colonial rule, much of the cotton sector in these countries has been organized in an "integrated" manner. State enterprises provide farmers with seeds, credits and extension services. They buy and gin their crops and market the cotton abroad. In recent years, the World Bank and IMF, in line with their general push for privatization, have pressed governments to sell off or open up their cotton agencies to private participation.
Côte d'Ivoire sold portions
of its cotton company in 1998 but most other countries have been
very reluctant to privatize. Resistance has come from both governments
and the Compagnie française pour le développement
des fibres textiles (CFDT), a French state enterprise that owns
significant minority shares in most of the francophone cotton
agencies. Critics charge that the CFDT opposes privatization because
it simply wants to preserve its semi-monopoly position.
However, both CFDT and government officials point to major economic and development considerations. As with other export crops, they worry that liberalization could lead to a decline in the quality of cotton exports. More significantly, in Burkina Faso, Central African Republic, Mali and elsewhere, cotton enterprises provide subsidized inputs and guaranteed markets for many rural farmers. They limit the impact of world market fluctuations on some of the poorest farmers.
Such protection could disappear if the sectors are broken up and privatized, notes Mr. Jean-Luc Lecorre, deputy director of the Africa Merchant Bank which manages investments in agro-industrial enterprises undergoing privatization. Liberalization of markets for fertilizers and other inputs could also bring a reduction in cotton yields if prices are raised higher than farmers can afford, he says. "For such a highly integrated sector, the risks of privatization are many." If privatization becomes necessary, he suggests that governments try to bring in established agro-industrial companies willing to make long-term investments as opposed to commercial enterprises simply after quick profits.
Another option is to sell or turn over portions of these cotton
enterprises to the producers themselves. This already is under
way in Senegal where 30 per cent of the shares in the state cotton
company are being ceded to farmers' associations, with plans to
later sell other portions to employees, the general public and
a "strategic investor."
