Background to the Cotton Sector

In Tanzania, cotton contributes to the livelihood of about 40% of the population and is one of its main export commodities. As a cash crop, cotton represents a major source of income and employment, particularly in some regions of the central corridor, offering economic opportunities to 500,000 rural households and as such was selected by RLDP as a target sector to improve rural livelihoods.

RLDP’s vision is to raise the efficiency of the cotton sector through better yields, improved quality and processing in order to enable smallholder producers to fully benefit from the economic opportunities created by a competitive ginning export industry and domestic textile industry.  Experience has shown that provision and timely delivery of adequate inputs, together with strong and well-coordinated rural advisory services, has the potential to double productivity of seed cotton cultivation. RLDP has demonstrated that contract farming is the right means to achieve this goal, and can create win-win situations that benefit both producers and processors/ginners. In order to make it work, by the end of 2015, all stakeholders, including producers, will be represented by strong associations that can speak on their behalf and foster trust, cooperation and learning to move the sector ahead. In the long run, this will lead to a situation where producer and ginners work together to set the best possible regulatory environment.  Besides bringing in more producers and raising productivity, RLDP also envisions a sector in which some high-potential farmer groups and associations move one step up the value chain and thereby add more value to their final product; a sector in which risk-mitigation mechanisms are available and accessible to smallholder producers who want to reduce their exposure to climate risk; one in which both private and public actors work hand in hand to make available the necessary skills and instruments needed to cultivate cotton in a sustainable manner that preserves the natural resource base of producers.

Intervention One-Commercialisation of Farmers’ Organizations

In commercialization Farmers’ Organisations, RLDP works with farmer groups and associations to support them in managing their groups as a business which will make the groups be able to access new markets and benefit from input and advisory services to raise productivity and improve quality. The intervention will include:
• Training and advice on management and organization of the group
• Building an effective network of lead farmers to make dissemination of best agronomic practices more effective, and collaboration with the groups more attractive forginners.
• Quality management systems
• Capacity building on cotton marketing (including infrastructure such as collection centers and warehouses). 
• Where applicable, when dealing with groups that engage in organic cultivation (like Kilimo Hai Maswa (KIHAMA) Maswa organic farmers organization), support will also include facilitation in organic certification and standards compliance. 
The benefits of such an intervention are multiple:  well organized FOs practicing contract farming greatly provision of inputs and enhance extension service provision to the farmers, thereby raising productivity. As a result of farmers being organized, ginners will be able to benefit from reduced transaction cost for service provision to farmers, purchasing of cotton and quality control.
Optionally, if potential is identified over the next four years, some of the groups could also be supported in accessing high-value markets: 
In the medium term, this could mean potential opportunities for entrepreneurial farmers organizations located near the main spinning and weaving factories in the north-west. In collaboration with banks (mainly CRDB), collateral management systems could be established to finance investment in cotton production, buying of seed cotton and processing by group members. 
For the organizations in the vicinity of underutilized ginneries, processing their seed cotton on their own account will raise income and directly impact the livelihoods of producers. 

Farmers’ groups in the cotton industry are faced with several challenges which prevent them from rendering tangible benefits to its members, may not be held accountable for failing to achieve the objectives for its existence. 
The three high potential farmers’ organizations have diverse strengths and weaknesses which, through deliberate experience sharing and interaction can improve each other’s performance. Two of the Farmer Organisations (Kilimo Hai Maswa (KIHAMA) and Busangwa Organic Farmers Association (BOFA) are organic cotton producers and have secured reliable markets for their produce. However, they still face threats in expanding and increasing acreage due to limited funding to buy as quantity of cotton to meet their buyers demands. Other two FOs (BOFA and ORIDOY) add value by ginning the cotton and sell lint and cotton seed. Other two (MSK and ORIDOY) produce conventional cotton and are faced with the challenge of its members side selling due to weak contracting systems. The 3 Farmer Organisations have managed to recruit a total of 3378 cotton producers. The intervention aims to address these threats and constraints: Limited storage facility, limited extension services, to some Farmer Organisations untimely access to finance to buy, pack and transport cotton to their buyers. Also, scarce transport for effective provision of extension services and overworked extension supervisors are some of the constraints. 
Therefore, this intervention envisions innovating formal business records, warehouse receipt system, organic cotton, written contracts, and conservation agriculture.

Intervention Two-Conservation Agriculture

This intervention is addressing accessibility of farm implements for conservation agriculture (CA) through local retail services. Conservation agriculture is one of the most concrete and promising ways of implementing sustainable agriculture in practice. 
It relies on three basic principles: 
1) Minimum soil disturbance or if possible, no tillage seeding; 
2) Soil cover: if possible, permanent; and 
3) Useful crop rotations and associations.
This intervention will focus on making farmers know the importance of reducing mechanical soil tillage to absolute minimum to avoid erosion and depletion of soil nutrients (decreasing fertility).To start with the intervention will involve introducing the use of rippers instead of normal ploughs which are current used and contribute significantly to soil erosion.

This intervention is expected to stimulate private sector actors, especially those involved in distribution of farm inputs including farming implements to start distribute these conservation agriculture implements. RLDP plans to improve service provision to producers by facilitating the development of a local industry and / or retailer network producing and distributing conservation agriculture farm implements. This intervention is expected to effectively complement efforts by Tanzania Cotton Board (TCB) and Tanzania Gatsby Trust (TGT) who are currently promoting conservation agriculture in cotton production.

RLDP will collaborate with the TGT/TCB to help the private sector step in and profitably offer these tools locally. To start with RLDP in this intervention will use the existing retail network of Mukpar which is the inputs distributor in the central corridor of Tanzania to sell the implements as a package that comprises training in conservation agriculture.

The success of this intervention is expected to also impact other agricultural sub-sectors, since the tools can be used for a variety of crops, not only cotton
While implementing this intervention RLDP is envisioning development of commercial strategy for availability of conservation agriculture implements, support importer/partner to commercialize conservation agriculture implements, develops a network of agro-dealers selling conservation agriculture implements and make aware of and train farmers to conservation agriculture.

Read the whole Cotton Sector Market Development Strategy here.