Why Ghana must Reconsider its Cotton Industry to Conquer Poverty

Cotton production in Ghana has contributed much to the economic development of its inhabitants, especially in the northern parts in particular and the textile industry in general.

Historically, the country started commercial production in 1968 but sad to recount it has encountered numerous challenges, resulting in production decline.

In spite of efforts by successive governments to resuscitate the cotton sector inherent problems within the industry seem to defy solution. For instance, out of the three private companies given the nod by the government in 2009, it is only Wienco Cotton that is still alive in the cotton industry in the North right now albeit with so much difficulties and challenges.

It is against this background that the recent RMG Ghana Limited, an agricultural input distribution company‘s injection of 10 million dollars into revamping the industry is a step in the right direction.

The five-year project to be implemented by Wienco Cotton Ltd with a target of increasing the units of cultivation from the current 4,000 to 50,000 units is aimed at boosting the cotton sector to feed the fabric industry to enhance economic growth.

Research shows that over 60% of the world’s cotton is produced by smallholder cotton farmers, who are among the poorest and most vulnerable in the world. Around 90% of these estimated 100 million smallholder farmers live in developing countries and grow the crop on less than two hectares.

Many smallholder cotton farmers live below the poverty line, earning less for the sale of their cotton than they need to meet basic needs such as food, healthcare and tools.

Smallholder farmers often suffer high levels of debt, in part due to high input costs (such as pesticides and fertilisers). Along with other market factors, this can contribute to a perpetual cycle of poverty for many.

Sustainable cotton has the potential to lift millions of people out of poverty by providing a more stable income and improved working conditions. Cotton is an important rotation crop for smallholders, both for fibre, fuel and food (such as cotton seed oil) and the cash income it generates is vital to improved living standards.

Cotton farming systems vary hugely between geographical areas. In countries such as the USA, Australia and Brazil, cotton is grown on larger, modernised farms using more mechanised technology and systems. In other parts of the world like India and Mali, it’s more likely to see small-scale, labour-intensive production like hand weeding and picking.

Wherever it is grown, unless produced according to sustainable practices, cotton production can present significant challenges, and in some parts of the world may be associated with high social, environmental and economic impacts.

Experts say the price of cotton can be volatile, due to a range of factors such as national regulation, stockpiling, and government subsidies for farmers. This, combined with other factors, creates an uncertain market for farmers, which can make cotton a less attractive crop to grow.

Additionally, they point out that the financialisation of cotton is a lesser-known issue significantly impacting the stability of cotton markets.

Where these markets were once used to manage risk, they are now used in times of low returns in conventional stock markets and investments as a source of profit.

This result in significant fluctuations in price and therefore instability in the cotton price farmers can realise at a given time, despite having no real connection to physical supply and demand.

The government should therefore put in place pragmatic and farmer-friendly measures to ensure that interest in the industry does not fluctuate with times and seasons. This would make the cotton industry play its expected role in the planting for jobs and export programme.

Source: Oppong Baah || African Eye Report

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