COTTON: an abandoned 'White Gold'

The fortunes of the country’s cotton industry continue to dwindle over the years as production areas in 2014/15 was about 2,500 hectors.

 

The drastic decline in the prospects of cotton over the years could be attributed largely to the little attention given to the sector by government; the absence of subsidies to cotton farmers; high interest rates on loans for agriculture; poor loan recovery from farmers; and mostly importantly, a bearish world market price for the commodity. 

A study has revealed that out of 70,000mt total installed ginnery capacity, Ghana’s cotton production per annum now hovers around 4,000mt; an abysmal performance which is mainly attributed to low productivity level of out-growers who still stick to obsolete cotton production technology with heavily reliance on agro-chemicals, resulting in high cost of production.

In November 2010, with the support of the World Bank, Ghana developed and launched the Cotton Revival Strategy with the objective of promoting private investment in the sector.

The effect is that the booming textile industry in the past is now a pale shadow of itself. The few firms still in operation now have to depend heavily on raw material imports. Cheap imported textile products price out those of local firms on the market.

Successes achieved with cotton in some African economies in terms of production levels should serve as a benchmark for Ghana. For instance, while Ghana only managed to produce 36,000 metric tons of seed cotton in 2006/7, Burkina Faso produced a colossal 700,000 metric tonnes.

At a time Ghana is witnessing declining fortunes in the cotton industry, Burkina Faso, which shares a number of similar land and climatic conditions with the three Northern Regions of Ghana, has enhanced yields of up to 75%. As a form of employment, farmers mostly in the three Northern Regions engage in the production of the crop to increase their incomes.

Reviving cotton industry

In 2011, when there was an impressive world market price of cotton, which was expected to be an extra advantage to the country’s economy, government embarked on major strategies to revamp the industry as part of plans to improve the cotton industry.

In view of this, the Ministry of Trade and Industries which spearheaded the drive adopted two major sectorial policies including the assignment of zones to private companies to produce cotton. 

As part of the strategies, government has therefore embarked on a cotton sector revival programme and zoned the cotton belt into three and assigned to three companies for the production of the crop.

The North-Eastern Zone has been allocated to Wienco Ghana Limited in partnership with Geo-Cotton, a French Company. It covers Kasina-Nankana, Tongo/Nabdam, Bawku West, Bawku Municipality, Garu-Tempani, Bongo, Builsa, West Mamprusi, East Mamprusi, Buunkpurugu, Gushiegu, Saboba, Chereponi and Zubzugu.

Olam Ghana Limited has also been allocated the North-Western Zone, covering Sissala East, Sissala West, Jirapa, Lambussie/Karni, Lawra, Nadowli, Wa East and Wa West Districts and Wa Municipality.

Plexus in partnership with Amajaro Ghana Limited was allocated the North-Central Zone, which comprised Savelugu, Tolon/Kumbungu, Bimbilla, Wullensi, Salaga, Bole, Damongo, Buipe, Sawla-Tuna-Kalba and Kpandai districts as well as Yendi Municipality and Tamale Metropolis.

Again, as a long term strategy, it is prudent to work towards the establishment of an autonomous sustainable revolving fund that would support the activities of cotton farmers.

In Tanzania for instance, the Tanzania Gatsby Trust (TGT) has launched a special programme to increase cotton production to 1,500,000 bales by the year 2015 from the current 700,000 bales. It has set aside US$7.2 million for the period 2008 to 2010.

Major policy decisions including the adoption of Genetically Modified (GM) technologies and drip irrigation systems to improve productivity and to reduce costs ought to be considered. The U.S., China, India and many other countries have applied GM Technology with considerable success.

Last year, a nine member board for the Cotton Development Authority was inaugurated in Tamale  with the responsibility to work closely with the Authority to revamp the cotton industry and to increase investor confidence.

According to the Ministry of Trade and Industry, the re-constitution of the Board was a reflection of the government’s commitment to once again position the industry to make it more viable in order to make it a key sector in the overall Agricultural Development Programme. 

As part of boosting investors confidence, the sector ministry has goven assurance of government’s readiness to provide policies, create the enabling environment and the investor framework to encourage the private sector to invest in the industry

Market size of the cotton industry

Cotton is a major cash crop cultivated in most parts of the globe including Ghana. It is a soft, stable fibre shrub native to tropical and sub-tropical regions around the world including the Americas, India and Africa. 

The cultivation of cotton started seven thousand years ago, in the Indus Valley, a place today inhabited by North-western India and Eastern Pakistan. 

The largest producers of cotton in 2009 were China and India with annual production of approximately 34 million and 24 million bales respectively. Textile industries in these two countries consume up to 80% of what they produce.

Raw cotton exports are from the United States and Africa. Sales are $4.9 billion and $2.1 billion respectively. 

The total international trade in cotton is estimated at US$12 billion. Since 1980, Africa's share of the cotton trade has doubled. In the case of Africa, exports of raw cotton are occasioned by an absence of any significant domestic textile industries to add value to cotton grown by numerous small farm holders and the need to earn foreign exchange.

The fibre is spun into yarn or thread and used in the textile industry. Cotton seed is a source of quality edible oil. A by-product after the extraction of oil is a cake that is excellent feed for livestock.