DEVELOPMENT-COTE D’IVOIRE: Debt May Cause Cotton Season to Unravel

By Aly Ouattara Reprint | | Print |

Aly Ouattara

KORHOGO, Northern Côte d'Ivoire, Jul 3 2006 (IPS) - The planting season for cotton is fast drawing to a close in Côte d’Ivoire: Jul.10 is the cut-off date. But cotton growers in the north of the country still lack the fertilizers and pesticides essential for producing a successful crop.

Previously, the chemicals would have been distributed to growers’ organisations by cotton companies which obtained the supplies on credit, said Dossongui Diabaté: director of cooperation and credit at the Savannah Industrial Cotton Company, a regional federation of co-operatives of cotton processors.

These companies would deduct the cost of the chemicals from prices paid for raw cotton at the end of the season, to reimburse fertilizer and pesticide suppliers.

During the past four years of political instability, however, the cotton growers have mostly refused to sell their crops to the cotton companies because of arrears on payments for their raw cotton, noted Nadjin Ouattara, a manager at a regional federation of agricultural cooperatives. (Some 30 million dollars are owed.)

Instead, ”They (farmers) sold for cash at ridiculous prices within the country or to neighboring countries. With such changes in the behaviour of the cotton growers, cotton companies have become incapable of paying back the additive suppliers,” he told IPS.

Farmers sold 218,000 tons to Mali and Burkina Faso at approximately 200 dollars a ton in cash, and just 82,000 tons to Ivorian companies for 360 dollars a ton: this higher price took the form of credit at the firms, Diabaté said in an interview with IPS.

Suppliers of fertilizers and pesticides have demanded to be paid what they are owed for the 2005/2006 season, before providing chemicals for the latest cotton crop. Among the country’s five cotton companies only one has managed, since May, to distribute fertilizer and pesticides to its network of producers.

Agriculture minister Amadou Gon has reportedly indicated that government will pay the debts of companies in difficulty, while a Jun. 21 press release from the cabinet pledged some nine million dollars “for the smooth operation of the cotton season.”

According to the release, President Laurent Gbagbo has also asked the minister of agriculture to begin a study on the cotton industry that would include a plan for restructuring the sector financially.

While government attempts to get fertilizers and pesticides to farmers, others have spotted commercial opportunity in the supply crisis.

“The merchants go to Abidjan (the economic capital) to pay cash for the additives to the same suppliers as the cotton companies deal with. Then, they resell these products at prices the growers find reasonable compared to the prices the cotton companies sell them for on credit,” Ali Zerbo, a merchant at Korhogo market in the north, told IPS.

“A bag of fertilizer (of 50 kilogrammes) costs 10,250 CFA francs (about 20.5 dollars) from a neighborhood merchant, compared to 13,000 CFA francs (26 dollars) on credit from the cotton companies.”

And, it doesn’t end there.

“Because they need the money, the cotton farmers resell these same chemicals…to itinerant merchants who visit the country’s hamlets and villages with wads of money during the growing season,” Abdoudramane Sangaré, a seller of chemical products at the Boundiali market, northeast of Korhogo, told IPS.

During the following season, these merchants will again sell the same additives to cotton growers at somewhat more expensive prices – but always lower than the cotton companies’ prices, he added.

In the course of a meeting of the Korhogo regional council last month, Gon said his department would do everything in its power to intervene with chemical suppliers so that the growers would be able to salvage the 2006/2007 season.

Désiré Kambiré, president of a growers’ cooperative in Ferkessedougou, in the north, isn’t overly optimistic about the outcome of such efforts, however.

“Even if the fertilizer arrives, those who began to sow from the second of May will have a good season, compared to those of us whose fertilizer arrives tremendously late.”

Ouattara sounds an even gloomier note, claiming that it is already too late to ensure a good cotton crop with the addition of fertilizer: “The result: cotton production will decrease considerably in quantity and quality, and the cotton industry of Côte d’Ivoire will only regress.”

Cotton growing is the lifeblood of more than a million people in the West African country. The farming is largely located in the north, north-east and centre of the country, where the various cotton companies are also based.

Since an abortive coup in September 2002, Côte d’Ivoire has been divided into a rebel-held north and government-controlled south. Troops in the northern half of the country took up arms to protest alleged discrimination against inhabitants of the region.

Efforts are underway to disarm both parties to the conflict ahead of presidential elections scheduled for Oct. 30.