Once the predominant cash crop of the north and key generator of export earnings, the cotton sector saw production fall from 400,000 tonnes per year in 2001 to 100,000 tonnes in 2008. Mismanaged liberalisation policies, a fall in global cotton prices and civil war led to farmers abandoning cotton for other cash and staple food crops like cashew nut, maize and sorghum. Notably, farmers started to plant cashew nut in place of cotton, with production jumping from 185,000 tonnes in 2005 to 475,000 tonnes in 2012.

EFFICIENCY: To realise the potential of these key cash crops for the north’s economy, the government has drafted a reform agenda that will create a single regulatory body with the primary goal of guaranteeing cotton and cashew farmers 60% of the cost, insurance and freight (CIF) price of their output. For cashew, authorities aim to establish a minimum price by 2014, according to the local press. No timescale has yet been offered for forming a regulatory body for cotton and cashew. In the spirit of the National Agriculture Investment Programme (Programme National d’ Investissement Agricole, PNIA), government officials also plan to set up public-private partnerships with private investors to develop agro-progressing facilities.

In the cotton sector, the reform’s main goal is to boost yields to 500,000 tonnes by 2015 to meet current ginning capacity of 600,000 tonnes. The reform has a two-pronged strategy: the reorganisation of producers into zones and the restructuring of cooperatives. The new buying zones are designed to improve the efficiency of the marketing process, whereby cotton companies will be assigned to certain zones for purchases. This new structure will help guarantee the new minimum farm gate price upon its implementation, and also facilitate the coordinated distribution of fertilisers, herbicides and other inputs that are purchased in advanced by cotton companies, the costs of which are recuperated upon cotton deliveries.

COOPERATIVES & INPUTS: Cooperatives will also be restructured with a goal of increasing professionalism. During the liberalisation period, fraud at some cooperatives meant they were unable to pay for the costs of inputs, leading to lower yields. With EU funding, the sector’s regulatory bodies have identified 287 legal cooperatives, with 25 unions in 2011/12.

The new regulatory body will also oversee the distribution of inputs by companies. In the past, the Ginners Association had launched tenders for fertiliser purchases and then allowed operators to select the amount of supplies and mode of payment, which resulted in variable input prices and indebtedness among some operators. While the government has spent CFA7bn (€10.5m) on subsidised fertilisers since the 2007/08 season, assistance needs to be increased given the high costs of inputs for the average producer. The price of 50 kg of fertiliser has nearly doubled from CFA9000 (€13.5) to CFA17,500 (€26.25). Farmers need 200 kg of fertiliser to plant 1 ha of cultivable land.

VALUE ADDED: Another key component of the reform programme is the development of value-added activities. Seven companies are active in the sector that have a combined total of 14 factories with capacity of 530,000-600,000 tonnes: CIDT, Ivoire Coton, COIC, M’Bengue Coton, SECO, SICOSA and DOPA. In addition, there are few companies engaging in activities further up the value chain. In textiles, COTIVO and Société de Filature Tissage produce spinning thread from a combined annual capacity of 15,500 tonnes of grain cotton. There was also good news for the sector in 2012, when UTEXI, which closed in 2002, was acquired by Sotexi, a consortium of Ivoirian investors who plan to invest €15m over a five-year period. The firm intends to diversify into starching activities in the medium term and to triple production to 5m metres of fabric and 15m metres of fibres by 2017. A fifth of the output will be sold on the domestic market, with the remainder exported to Europe and the US.

COTTONSEED OIL: In cottonseed oil, Europe-based Ivoirian businessman Alexandre Keita bought a cottonseed oil processing plant in Bouake in late 2009 and has already injected CFA2bn (€3m) into its renovation. The company, Olheol, will have a capacity to treat 200,000 tonnes of cottonseed, although production in 2013 is only likely to reach 100,000 tonnes.

To encourage farmers to remain in the cotton industry, the government is working to increase value-added activities in the sector. Now that farmers are returning to cotton given higher prices during the 2012 season – the seed cotton price stood at CFA265 (€0.40) for premium quality and CFA240 (€0.30) for second-tier quality – ginning companies will be able to increase production of lint cotton, given the ample raw material for textiles companies. With farmers switching back to cotton, production is expected to increase to 340,000 tonnes for the 2012/13 season with yields remaining constant at around 1000 tonnes per ha.

However, key aspects of the reform, such as zoning, are unlikely to take place in the short term due to lack of funding. The government is trying to secure funds for the initiative from the World Bank, yet any financing deal is contingent on the complete privatisation of currently state-owned CIDT, which could push back the implementation of zoning to 2016.

CASHEW: Contrary to cotton, cashew saw its production take off in the 2000s, with output rising to 475,000 tonnes in 2012 from 185,000 tonnes in 2005. The sector had 250,000 producers farming cashew on an area of 750,000 ha as of 2012. Annual yields reached 650 kg per ha. Côte d’Ivoire is at present the largest exporter of cashew nuts globally, with the majority of exports (65%) bound for India and Vietnam (29%). In 2012 the sector’s export earnings reached CFA136.44bn (€204.6m) and the government collected CFA3.25bn (€4.9m) in export taxes. Producers saw gross revenues of CFA139.5bn (€209m).

Given the rapid development of cashew in the absence of state institutions during a period of political unrest, the sector lacks organised structures, which has led to low yields and poor quality. Average plot sizes of 1-3 ha produce yields of 300 to 500 kg per ha, against 2-6 tonnes in India. Compared to nuts from Benin or Guinea-Bissau, Côte d’Ivoire’s cashews are of mediocre quality, leading to a wide range of prices at market. In the industry, quality is measured by out turn, the weight (lbs) of usable kernels per one 80-kg bag of raw nuts. While 48 lbs per bag is considered standard quality, the preference amongst buyers is for 48-51 lbs. For the 2012 season, the average out turn for cashew nuts was 45.53 lbs, which decreased throughout the purchasing period. Indeed, most producers are not organised into cooperatives, and thus often lack the technological capacity in planting, drying, sorting and stocking to produce better-quality nuts.

EXPORT MARKETS: As Côte d’Ivoire produces only raw cashews, and not the finished cashew kernels sought by the US and EU markets, the country relies on India, Vietnam and Brazil as trading partners. In the face of saturated markets, buyers and exporters are struggling to be paid by offtakers for supplies and have in turn decreased their purchases of nuts, leading to an excess of supply and falling prices. Farmers often resell excess nuts during the new season, which further deteriorates the quality of the crop and drives down prices. Notably, the out turn of cashew nut fell from 46 lbs to 38 lbs in the 2012 season, and this resulted in 10,000 tonnes of poor-quality cashews going unpurchased.

ADDRESSING ISSUES: To address these issues, the new regulatory body, in collaboration with institutions like the National Agency for the Support of Rural Development (Agence Nationale d’Appui au Développement Rural, ANADER) and the Interprofessional Research Fund and Agricultural Council, will distribute higher-yield seed varieties and promote grafting techniques among farmers to prolong tree lifespan. Storage bags for the sale of cashew nuts will also be distributed to better condition nuts. The key reform in the sector will be the 60% CIF price guarantee for farmers. The Regulatory Authority for Cotton and Cashew (Autorité de Ré gulation du Coton et de l’Anacarde, ARECA) expects that it will go into effect by 2014.

Given that there is no mechanism to enforce prices, the suggested farm gate price for the 2013 season of CFA200 (€0.30) per kg has not been respected, with reports that companies are buying at CFA150 (€0.20) per kg. However, it will be a challenge to make companies respect the minimum farm gate price in the face of quality issues. Besides providing inputs and disseminating new planting, drying and storing techniques to improve quality, the new body has not announced plans that would guarantee quality for buyers.

PROCESSING: The government also aims to raise local processing capacity from the current 5% of production to 50% by 2015 and 100% by 2020. Officials are looking for private investors to construct a nut-processing factory in the country through a public-private partnership. Large players in cashew nut processing include Olam, SITA, CAJOU de Fassou, COOGES and PAMO. Olam has a processing capacity of 40,000 tonnes, while SITA’s capacity stands at 1500 tonnes. Olam intends to invest in two additional cashew-processing facilities, with one in Khorogo and one in Bondoukou, at a cost of $60m.