Unctad stresses tapping the full potential of cotton in developing countries

Cotton is a source of income for over 100 million families worldwide, many of them small farmers in rural communities in developing countries. A single tonne of cotton provides year-round employment for 5 people on average, often in some of the most impoverished regions, the United Nations estimates.

"But the importance of cotton for many developing countries extends beyond its producers and those directly or indirectly engaged in the value chain," Secretary-General of United Nations Conference on Trade and Development (UNCTAD) Rebeca Grynspan said in a statement on the occasion of World Cotton Day marked on 7 October every year.

The World Cotton Day is an opportunity to celebrate and show the positive impact of this important commodity.

For example, cotton is the leading export commodity in Benin, with 61% of total exports. And it's the second-largest export product for both Mali and Burkina Faso, after gold.

Cotton is therefore a key source of foreign currency in these three least developed countries, as in many other developing countries, reads a media release at the UNCTAD website.

Four challenges need to be tackled

Grynspan said it is crucial for developing countries to reap the full benefits offered by cotton, by addressing both old and new challenges present in the cotton value chain.

She said, at first, productivity must be increased to produce cotton at a scale that can feed the cotton industry, which requires access to credit markets, rule of law and formal working and trading conditions.

Second, adequate, timely and affordable access to inputs like fertilisers remains challenging in several cotton-producing developing countries, especially following the war in Ukraine, which has produced a massive fertiliser crunch.

For example, the prices of two key inputs in fertiliser production, phosphate rock and urea, increased by 130% and 75.5% respectively between June 2021 and June 2022. 

In cotton-producing countries like Mali and Burkina Faso, the authorities responded by subsidising fertiliser sales to farmers during the planting season of 2022.

However, this response has its limits given the financial stress facing many developing countries, which are already struggling to pay their debts.

Third, the cotton sector faces the rising challenge of climate change, especially the elevated risk of extreme weather events, in countries where farmers have very limited access to risk-mitigating measures such as insurance.

The UNCTAD secretary-general said this needs to be acknowledged as an issue affecting primarily poorer cotton producing countries to come up with tailored response measures.

Fourth, efforts need to be devoted to fostering higher and more stable prices for cotton farmers, increasing access to post-harvest services such as transport, and investing in the production of cotton by-products. This could boost the benefits of this commodity by creating a wider industry cluster around it.

Plenty of room for improvement

"There is plenty of room for improvement. Our research shows that only one in four cotton farmers in Togo sold by-products, mostly cotton seeds," Grynspan said. 

This year, UNCTAD concluded a project in Togo that surveyed 423 cotton farmers in Kara province. Most of them came from households of 10 people or more, 95% had less than three hectares of land and only 6% were women.

Over the years, the organisation has assisted these small cotton farmers, especially in Africa, where it has carried out important research projects.

Rebeca Grynspan underlined UNCTAD's commitment to continuing its support for cotton farmers and value chains in developing countries in the years ahead.