The cotton subsector
The cotton subsector is one of the oldest and most structured in Mozambique, generating around 30,000 jobs (direct and indirect). It has its own institute (IAM), a diversified business sector (represented by AAM) and about 200 000 producers with experience and tradition in farming (represented by FONPA), all of whom, without exception, are also farmers of food crops.
Extension services to smallholder farmers are provided by companies, under a concession regime, which for this rely on vast extension, distribution, storage and logistic network.
Every year, companies distribute more than 5 million dollars in agricultural inputs and tools, fully assuming the credit risk of the rural and informal populations.
In the last few years, the national cotton fiber export volumes have varied between 40 and 70 million USD, of which about 60% are channeled to the farmers, through the purchase of their production by the companies, without intermediaries and under the supervision and control of the IAM
For these reasons, despite the challenges, cotton has been a very resilient vehicle for rural development in the country: it works almost exclusively with the most disadvantaged (and mostly informal) rural populations, mostly in remote and hard to reach areas; provides training and technical assistance on a large scale (as it is only natural that farmers integrated in incentive schemes also show productivity gains in their other crops); is a source of financing and inputs; assures market and all flow logistics; is an engine of change and innovation in several areas of interest to national agriculture. In short, it generates and distributes value in a fair, transparent and inclusive way.
The cotton subsector can and should also be increasingly used, not only as an expansion platform for other complementary crops (namely corn and oilseeds such as soybean, sunflower, etc.), but also for other areas of development (such as financial services, rural electrification, etc.), some of which are already being implemented in cotton companies.
Cotton as a great opportunity for generating value and employment
Cotton is one of the main job-creating industries worldwide, reason why it is much protected by the main world economies.
African countries hold a very minor position in world production. Even so, countries where cotton is most successful have been able to implement relevant incentive and support mechanisms in the value chain (as in West Africa and Ethiopia).
Cotton fiber has several stages of industrialization, namely the primary processing of seed-cotton, spinning, weaving, dyeing and confection. In addition to cotton fiber, cottonseed is a source of edible oil (and derivatives such as soap) and cake for animal feed. Cotton is also a source of biomass with a good energy value. .
At the present moment, in Mozambique, almost all cotton is still exported as fiber (raw). Just as a reference to this crop’s potential for generating value, the full implementation of the textile chain (without considering the cotton seed value chain for oils and bagasse) could multiply by 10-fold the current value of fiber exports (depending on the type of final product). In other words, the approximately 50 million dollars of the fiber export average value could be converted, in the medium term, to around 500 million dollars of exports of finished products (or of import substitution). For this reason, cotton is probably the national crop with the greatest wealth and employment-generating potentia.