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• Overview of the project

• Policy priorities

• Gap analysis

• Existing policy instruments

• New policy instruments required

• Conclusions

Outline of the presentation

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Overview of the project

Title Promoting cotton by-products in Eastern and Southern Africa (ESA)

Funding source United Nations Development Account (Project 1617K)

Countries Uganda, Zambia and Zimbabwe

Start date March 2016

End date August 2020

Total budget US$ 691,000

Implementing agency United Nations Conference on Trade and Development (UNCTAD)

Partners United Nations Economic Commission for Africa (UNECA)

Common Market for Eastern and Southern Africa (COMESA)

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Project impact statement:

Project countries have viable cotton by-product industries that generate rural business opportunities and additional income for farmers, contributing to a more resilient cotton value chain.

Relevance to rural development:

➢ Agriculture remains the main source of income and employment in rural areas.

➢ In growing areas, cotton is an established cash crop with a ready market = an accessible source of cash income for farmers.

➢ Cotton has a long value chain, with multiple processing nodes, many of which can be situated in rural areas.

➢ By-products are typically consumed locally, as substitutes for imports, contributing to the self-sufficiency of rural economies.

Developing by-products increases the viability of the cotton value-chain, contributing to sustainable rural development.

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Our project assists countries in commercializing residues from the cotton value chain.

COTTON PLANT

SEED COTTON

COTTON STALKSSEEDLINT

Meat

Hulls

Linters

Planting seed

Cake / meal- Flour- Feed- Fertilizer

Oil- Salad / cooking oil- Cosmetics- Pharmaceuticals- Waterproofing

- Feed- Fertilizer- Synthetic rubber

- Food packaging- Plastics- Film- Paper

Pulp- Particle board- Fuel briquettes- Substrate for

mushroom cultivation

Spinning (yarns)

Sewing thread

Non-woven- Medical uses- Ragtearing

Weaving yarn

Knitting yarn

Other

Textiles- Towels- Bed linens

Industrial- Canvas- Footwear- Belts

Textiles- Sheets- Curtains- Sleepwear

Industrial- Gloves- Bags

Industrial- Rope- Twine

Source: Adapted from Cotton Development Organisation, Uganda

(waste)

Focus area of UNCTAD project:"Promoting cotton by-products in Eastern and Southern Africa"

(waste)

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Complete

• Surveys

• National capacity-building workshops (National Action Plans)

• Study visit to India

• Investment profiles

• Regional synthesis workshop

Remaining

• Technical training

• Evaluation

Project activities run from 2016 until 2020.

Raw material End product Uganda Zambia Zimbabwe

Stalks Briquettes and pellets

Stalks / hulls Mushrooms

Cottonseedcake

Gossypol-free cake

Short staplecotton

Absorbent cotton wool

Cotton by-products selected for National Action Plans

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Cotton by-products respond well to countries’ rural policy priorities.

National policy priority SDGsExample by-

products

A. Income opportunities for farmersPrimary – 8

Secondary – 1 Fuel, fertilizer

from stalks

B. Small-scale, rural business opportunities, including for women

Primary – 8Secondary – 5

Mushrooms

C. Energy security , reduce consumption of wood and fossil fuels, forest conservation

Primary – 7Secondary – 15

Biomass fuels

D. Reduce waste, utilize residues Primary – 12 All

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Policy gap analysis: existing instruments

Policy instrument UGA ZAM ZIM Comment

Cotton act Yes Yes Partial •Covers production, not value addition.

Cotton-to-clothing strategy

No No Yes•Detailed plan for production and fibre value addition.•Only passing reference to by-products.

Cotton-specific regulatory body

Yes Yes No• In Zimbabwe, the Agricultural Marketing Authority

(AMA) is relatively strong, but regulates all crops.

Contract farming framework

Partial No No

•Nearly all cotton in ESA is produced under contract farming.•A strong legal framework underpins production and

yields, counteracts side marketing and credit defaults and builds trust.

Consensus producer price setting process

Yes No No

• Factors can include: international prices for lint and domestic prices for cottonseed by-products.•Mechanism can include indicative pre-season price

and/or floor prices.•Compliance among buyers is key, as is transparency for

farmers.

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Policy gap analysis: existing instruments (cont)

Policy instrument UGA ZAM ZIM Comment

National cotton farmers association

No Yes No•Different by country, according to its political and

agricultural development.

Ginners association Yes Yes Yes•Ginners are typically the strongest political group in the

sector.

Cotton value adders association

No No Yes

•An association can help obtain government support and inform effective policies on value addition.• It can also influence, for example, seed breeding,

production practices and processing parameters to obtain maximum value from raw material.

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Cotton-specific

•A coherent, end-to-end policy framework for the value chain – covering production, through

value addition, to consumption – with relevant legislation and statutory bodies.

•Comprehensive framework for contract farming, with a consensus price setting process.

General

•Programme for financing of rural agro-processing businesses.

• Infrastructure bills – roads, storage, power, etc.

•Associations and support for rural women entrepreneurs.

•Quotas and standards for inclusion of biomass fuels in clean energy legislation.

Strengthened enforcement of existing policies

•REDD+.

Supra-national

•Regional cooperation on research and development.

Policy gap analysis: new instruments required

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• In liberalized African economies, rural development depends on a coherent, end-to-end approach to establishing viable agricultural value chains.

• Improving incentives for farmers is a policy win-win: improving rural livelihoods and ensuring a more reliable supply of raw material.

• Trust among farmers and buyers/processors is key and requires a comprehensive, transparent contract farming framework, including a consensus price setting mechanism.

• Governments must invest in rural infrastructure, a prerequisite for cost-competitive products.

• Governments must also fund programmes that create incentives for banks and entrepreneurs to invest in rural businesses.

Conclusion

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• UNCTAD project site, including all documentation:

https://unctad.org/en/Pages/SUC/Commodities/SUC-Project-1617K.aspx

• WTO-UNCTAD-ITC initiative on cotton by-products:

https://unctad.org/en/Pages/SUC/Commodities/SUC-Project-Cotton-by-Products.aspx

• Contact Kris Terauds:

kris.terauds@un.org

+41.22.917.5931

For more information