The preference of cotton growers in Ethiopia has slipped back to improved local seeds

How wide is the gap between the demand and supply of cotton in Ethiopia?

Yared: The current local cotton production cannot satisfy the demands of operational textile factories. There are more factories in the pipeline too. Obviously, these factories will face to source the commodity from the local market. When the [more than dozen] industrial parks become fully operational the demand for cotton will swell further. That’s why we need to boost our production capacity and improve quality well in advance.

What is the government doing in this regard? 

Attracting new investment in the cotton production sector is important. We have planned to establish ‘cotton development corridors’ in different part of the country. These corridors will have all the necessary infrastructures. Establishing ginneries near cotton farms is especially important. Currently cotton growers are located at the peripheries while ginneries are located in towns.

Last October, Ethiopia  launched a 15-Year National Cotton Development Strategy. What will be the role of this strategy to boost production to match the fast growing demand?

The strategy outlines steps to be taken for the next 15 years and highlights the targets to be achieved. More specifically, the strategy envisions producing enough cotton to satisfy the ever growing local demand and start export in the next five years. The country’s vision of becoming a hub of light manufacturing industries in Africa cannot be realized without boosting its potential in cotton.

The study conducted to prepare the Cotton Development Strategy has identified the challenges in the value chain of cotton production; can you itemize some of them? 

The challenges are multifaceted and differ at every stage. At farm level, there is a shortage of improved cotton seeds, pesticide, fertilizer and chemicals. On the other hand, commercial farms cannot be competitive with the available human resource, unless they start mechanization. Shortage of labour was evident particularly in the last fiscal year due to the large number of labour migrations to the sugar sub sector.

There are also structural problems that deteriorate the quality of cotton produced due to poor handling during transportation and storage. Naturally, Ethiopian cotton has no quality problem, but due to poor post harvest management practice and lack of legal frameworks that helps to enforce standards, the quality of cotton is being jeopardized.

Access to finance is also a big challenge. The loan procedure at the Development Bank of Ethiopia (DBE) does not give enough consideration to the specific needs of investors especially in the agriculture sector. There are many cotton investment projects that failed to start operation, due to problems with DBE. In fact, 35Pct of the land provided for cotton growers is currently idle because DBE could not release credit to develop it.

But, this is not only due to the Bank’s policy. The overall financing system need to be rechecked. Even though DBE is the state policy financier, we believe the Bank has to know the different needs and nature of the sector. Of course, there are problems among some investors in managing their loans effectively.

Lack of research and limited support from agricultural extension experts for cotton growers also contributes to the problem. Furthermore, we do not have legislations that dictate the marketing of raw and ginned cotton. So, more is needed to determine when, where and how raw and ginned cotton should be sold. In India, there are market centers accessible to small holder farmers called ‘market yards’ to sell their outputs. In our case brokers benefit most dictating the value chain. Currently, brokers buy cotton with ETB10 to ETB12 per kilogram from the farmers while the final price is around ETB35.

There is also poor coordination between federal and regional governments in terms of allocating land for cotton growers.

What were the major recommendations of the study?

According to the study, Ethiopia’s cotton farming is much different from other cotton growing countries. While the majority of the cotton growers are small holder farmers that depend on rain, in other countries, the majority of cotton growers are large scale farmers that use irrigation and mechanized farming techniques.

The study proposed to establish an institution to coordinate the activities of small scale farmers. But, officials at the Ministry of Industry did not endorse the recommendation.

The study found out that cotton production in Ethiopia is dominated by small scale farmers. Which one of the farming systems do you think is suitable in the Ethiopia’s context?

There is a cotton commercial farming that uses irrigation in Omo valley in the Southern state and another in the state of Afar along Awash River. Small holder farmers that depend on rain are largely found in the states of Amhara and Tigray. So, we have the potential in both farming systems. However, commercial agriculture and irrigation will be very important to transform the sub sector. There are untouched and vast landmass in the States of Afar and Somali that can be used for this purpose.

Currently, there is a price war between cotton growers and textile companies. What are the reasons?

In any country, there will always be peaceful war between cotton growers and textile companies. In Ethiopia, the textile industries try to influence the cotton price, particularly by capitalizing on the problems in the cotton sub sector. On the other hand, cotton growers do not even want to disclose how much area they are cultivating and the output they expect for fear of price fall.

In so many occasions, wrong information circulating in the market distorted the market and affected the cotton subsector significantly. What have you been doing to minimize this?

The solution is to deploy our personnel to collect data and follow-up cotton production and marketing in every stage until it reaches textile factories. In other countries, such task is done by associations that represent cotton growers and textile companies. But these associations in Ethiopia fight each other. We are trying to help them talk face to face.

Cotton farmers in Ethiopia grow mostly short fiber cotton while local textile companies demand long fiber cotton. What is the source of such misunderstanding?

We need to understand the nature of cotton trading in the international market. For instance, India is number one in cotton production. They export the commodity, and add value to it to produce textile and garment. At the same time, India imports cotton types that are not grown in the country. So, exporting the surplus of your best product and importing what you lack is the global trend. In the same manner Ethiopia imports to satisfy half of the local demand annually. Although insignificant compared with imported amount, the country also exports cotton. In the past six months, USD6.2 million was earned from cotton export. So, exporting and importing cotton at the same period is not a strange thing; it is just the nature of the business.

Largest portion of locally grown cotton is short and medium fiber. Besides the inadequate water supply, this is mainly because of the limited seed variety in the country. So, we have to introduce as many varieties as possible. However, the short and medium fiber cottons are also preferable locally for making jeans pants. In vast low lands of the State of Afar and Ethiopian Somali, we can produce long fiber cotton.

Ethiopia import organic cotton as well. Isn’t this locally available?

Part of the reasons why Ethiopia imports cotton is because there are no certified organic cotton cultivation projects until recently. Cotton cultivation becomes inorganic when the pesticide and chemicals used surpasses a certain standard. Currently, there is high demand for organic cotton cultivated in environment friendly manner. For instance, textile industries like Ayka Addis buy organic cotton because of their clients’ needs. So, they import organic cotton.

But, initiatives to reverse the situation are in the pipeline. In fact, farmers in Southern State got certification to cultivate organic cotton recently. Organic cotton is cultivated with the lowest amount of pesticide and chemicals. So, it does not affect the environment adversely. It, instead, uses natural fertilizers, which however reduces productivity. However, farmers are compensating the reduction in productivity by selling it at premium prices. The same goes to textile companies.

Since the market dictates what and how to produce, we have to focus on environment friendly production system. Even if we have to use chemicals, we have to use it in a manner that does not affect the environment in the long run. There is also a global initiative to make all cotton production in environment friendly manner by 2041. Ethiopia is also part of this initiative.

Is this new trend compatible with Ethiopia’s current move to adopt and use genetically modified varieties?

One of the arguments during the preparation of the strategy was whether or not the country should adopt Genetically Modified Organisms (GMO). In the past, there was big push from Ethiopian cotton growers towards the use of GMO. These days, however, the question is reversed and they are arguing against it. Since the first field test was not good, decision on how to continue will be decided after stakeholders agree on the result of the second field test. But, the preference of cotton growers in Ethiopia has slipped back to using improved local seeds.

What will be the next move if the second field test fails?

Personally, I think the privilege of using GMO will be banned. But there is a probability of conducting a third field test because initially we planned to see the field test for three consecutive years.

The experiences of India and Burkina Faso indicate that the use of genetically modified cotton varieties is not risk free. What is the lesson for Ethiopia? 

Most of the damages occurred in these countries are not because of the use of GMO but due to the failure of the regulation and weak monitoring. Since the use and multiplication of GMO are handled by the farmers and the private sectors, low level of awareness, mistakes and poor ethics can have a significant impact on [the issue]. The damage it caused in Burkina Faso was immense. However, its harm in India was less severe and limited to some areas because the country has better regulation and monitoring practices.

Farmers in other countries cultivate even coloured cotton other than white. Are such varieties considered in Ethiopia?

The urgent assignment is to introduce seeds that can resist disease and yield high product. The existing cotton seed supply is not congruent with the climatic conditions of the farm areas. We have also been using the same seed variety throughout the country for the last two decades. We have to address these in time to raise productivity.

Is this why the GMO cotton varieties used in the confined field trials currently have less productivity?

Absolutely! It is disease that has been responsible for lower cotton productivity in Ethiopia. India, one of the top cotton producers in the world, managed to introduce disease resistant varieties and increase productivity by using GMO cotton varieties. In Burkina Faso, the problem that came along with the usage of GMO is largely due to the fact that the varieties failed to resist the disease.

6th Year . December 2017 . No.56