National Cotton Council of America
Beltwide Cotton Conferences
January 8-11, 2008
Gaylord Opryland Resort and Convention Center
Nashville, Tennessee
The Cotton Foundation

Recorded Presentations

Thursday, January 10, 2008 - 4:15 PM

Learning from the Economics of Networks to Enhance Poverty Alleviation in African Cotton Zones

Michel Fok Ah Chuen, CIRAD, Avenue Agropolis, Montpellier, 34398, France

The contribution of cotton production to the poverty alleviation in Sub-Saharan Africa (SSA) is well acknowledged. How this contribution has been obtained and how to make it sustainable are critical questions to clarify for the international community concerned with rural development. This paper proposes a theoretical approach to address this important issue.

Cotton sectors in Sub-Saharan Africa (SSA) were run by monopolistic parastatal organisms for a long time. They embarked upon a restructuring/liberalisation process as of the mid-1980s but the outcomes were mitigated at best. As these sectors resemble service distribution networks (telecommunication, power, etc.) in terms of historical monopolies and deregulation, cotton development in SSA could be reviewed and their current restructuring appraised according to economics of networks models.

This paper stresses that cotton sectors in SSA could be considered as service networks. They have a 3-layer morphology and comply with the five recognition criteria as suggested by Curien (2000). Stylised facts regarding network dynamics closely fit former cotton sector development patterns in most SSA countries. Cotton development did not occur without the related networks reaching a critical size that public intervention helped to attain through a time-demanding process.

The assimilation of cotton sectors to service networks enables to draw out practical lessons from the Theory of Networks in monitoring the reform of these sectors. In areas where cotton production is not very developed, it would not be worthwhile to attempt to restructure existing cotton networks as they are of insufficient size. Where cotton production is well developed, such deregulation could be considered but not through a vertical disintegration procedure. Splitting an existing nationwide monopoly into a limited number of local monopolies is a way of preserving vertical integration and of facilitating geographical regulation which should be more efficient and comprehensive than regulating only through purchase price fixing.