Identifier
Created
Classification
Origin
05NDJAMENA329
2005-03-03 14:14:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Ndjamena
Cable title:  

FALTERING CROPS AND A FRAGILE STATE: TROUBLES ON

Tags:  EAGR EAID ECIN ETRD PGOV PHUM PREL SENV CD 
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 ------------------C2A592 031420Z /38 
FM AMEMBASSY NDJAMENA
TO SECSTATE WASHDC PRIORITY 1068
INFO AFRICAN UNION COLLECTIVE
AMEMBASSY ABUJA 
AMEMBASSY ACCRA 
AMEMBASSY ADDIS ABABA 
AMEMBASSY BAMAKO 
AMEMBASSY DAKAR 
AMEMBASSY KAMPALA 
AMEMBASSY KHARTOUM 
AMEMBASSY LONDON 
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AMEMBASSY NIAMEY 
AMEMBASSY NOUAKCHOTT 
AMEMBASSY OUAGADOUGOU 
AMEMBASSY PARIS 
AMEMBASSY YAOUNDE 
USMISSION GENEVA 
USMISSION USUN NEW YORK 
USEU BRUSSELS
UNCLAS NDJAMENA 000329 

SIPDIS


SENSITIVE

STATE PASS USAID
LONDON AND PARIS FOR AFRICA WATCHERS

E.O. 12958: N/A
TAGS: EAGR EAID ECIN ETRD PGOV PHUM PREL SENV CD
SUBJECT: FALTERING CROPS AND A FRAGILE STATE: TROUBLES ON
THE LAND IN SOUTHERN CHAD

REF: NDJAMENA 308

-------
Summary
-------

UNCLAS NDJAMENA 000329

SIPDIS


SENSITIVE

STATE PASS USAID
LONDON AND PARIS FOR AFRICA WATCHERS

E.O. 12958: N/A
TAGS: EAGR EAID ECIN ETRD PGOV PHUM PREL SENV CD
SUBJECT: FALTERING CROPS AND A FRAGILE STATE: TROUBLES ON
THE LAND IN SOUTHERN CHAD

REF: NDJAMENA 308

--------------
Summary
--------------


1. (SBU) Cash crops and the industries based on them should
be thriving in southern Chad, the wettest, greenest part of
this drought-prone country. Cotton, textiles, and sugar had
at one time been sources of prosperity for millions in the
region. But now cotton production is stagnant, and the
marketing parastatal is bankrupt. The once vibrant textile
factory is shuttered. The sugar industry is struggling to
surmount high costs, water shortages, and competition from
smugglers. Ways must be found to revive commercial
agriculture and promote rural development in this region.
Chad's hopes of withstanding pressures that have shaken other
fragile states depend on it. End Summary.


2. (U) The Ambassador traveled to southern Chad over
February 8-15. The sketches presented in reftel portray a
region strained by rising claims on its pastures, soil, and
water. The impressions captured here bring to light the many
problems facing its main agricultural sectors.

--------------
Cotton
--------------


3. (U) Heading into the hottest, driest time of year, the
cotton crop is mostly in. Fluffy white mounds are piled up
in the middle of dozens of villages along the road between
Moundou and Sarh. They are waiting for trucks from
Cotontchad, the state parastatal, to gather them up and take
them to the cotton ginning plants. What happens to the
sector is a matter of life and death to the region, officials
in Moundou told us. Three million people depend on cotton
directly or indirectly, they say.


4. (U) If so, the outlook is bleak. Chad used to be
Africa's biggest cotton producer. Production has suffered in
recent years from mismanagement, low yields, inadequate
inputs, poor or nonexistent secondary roads, and high
transportation costs to the nearest ports hundreds of miles
away. This year, farmers responded to high price guarantees

by throwing their meager resources into cotton and neglecting
millet, sorghum, and other staple crops. Food prices have
soared in the local markets. Food shortages are looming, and
farmers have yet to be paid for their cotton, according to
several local officials we met.


5. (SBU) Meanwhile, Cotontchad, the only authorized buyer,
is effectively bankrupt. Bankers are refusing to advance it
more funds. The Chadian government has accepted the
conclusion of a recent World Bank study and signed off on a
plan to privatize Cotontchad no later than mid 2007. Still,
the question of how to pay for this year's crop remains. One
option is a one-shot deal to draw on Chad's new oil revenues.
Cotontchad's officials in their meeting with us pleaded for
unilateral action to cut U.S. cotton subsidies. Encouraged
by the Ambassador to support a global subsidy-cutting package
in Geneva, they argued instead that all of Africa would
salute the United States, if it took such moves on its own.


--------------
Textiles
--------------


6. (U) Salvaging Chad's cotton sector will require action


within Chad to privatize Cotontchad as well as improve
extension services and transport infrastructure. But part of
the solution too lies in processing cotton domestically and
avoiding the expensive transportation routes for raw cotton
through Cameroon. The apparatus for doing so used to exist
on the outskirts of Sarh. In its heyday the factory had
capacity for spinning, weaving, dyeing, and stitching. The
boarded-up remnants of Compagnie Textile (Cotex) still stand
north of town on the banks of the Chari River, but the
buildings are vacant. Its machinery, some dating back to the
early 1960's, last ran in the late nineties when the
parastatal company had to close down.


7. (SBU) A group of private Chadian investors has taken
over. They have grand plans for the factory's revival. They
are counting on a Dutch partner to help jump-start the
project. They hope imminent approval of Chad's textile visa
under AGOA will free up access to the U.S. market. Perhaps a
better bet than aiming for a fully integrated textile
operation would be focusing on restoring the plants' spinning
capacity. This would enable Chad to process its own
high-quality raw cotton and supply yarn to other African
garment-makers who are not eligible for or who are about to
lose their third-country fabric preferences under AGOA.
Indian representatives in N'Djamena have spoken with us about
a proposed credit from the Indian Government for this
purpose. Taiwan, with whom Chad has diplomatic relations,
has invested in such ventures in other African countries as
well.

--------------
Sugar
--------------


8. (U) Unlike cotton, which is produced entirely by small
farmers, Chad's sugar is grown on large estates owned by
Compagnie Sucriere du Tchad, a recently privatized company.
AIG's African Infrastructure Fund is among the owners. The
company's cane fields stretch for miles along the Chari River
to the south of Sarh. At night blocks as big as several
football fields are set on fire. The charred stalks are
collected in mounds during the night and carried to the
processing plant the next day. 1700 metric tons of cane are
crushed each day to make granulated sugar, sugar cubes, and
the hard sugar cones the desert nomads use to sweeten their
tea.


9. (SBU) But even this sector is in trouble. The company
cannot compete with sugar they say is dumped on world markets
by Brazil, processed in Nigeria, and carried by smugglers
through Cameroon. High costs, the company's executives say,
are incurred by having to pump water from the Chari River
into the spindly irrigation pipes that extend overhead for
nearly a kilometer over the fields. In many sections the
company is gradually installing underground black plastic
tubes that will allow water to seep directly into the roots.
Its managers hope this more efficient Israeli technology will
lower costs and reduce losses from evaporation.

--------------
Comment
--------------


10. (SBU) High hopes are pinned on oil revenues now flowing
from the ExxonMobil-led project near Doba in southern Chad.
But oil will never provide livelihoods for as many people as
agriculture and its associated industries. A WTO farm deal
could enable the region to make the most of its advantages in
cotton and livestock. AGOA could provide incentives for
investors to help overhaul the textile factory and perhaps


build up other export industries as well. But promoting cash
crops and rural development cannot happen without fundamental
reforms and investments within Chad. Oil revenues, if
managed well, can help with necessary resources. So can
support from well-targeted foreign assistance. The region is
facing intensifying environmental pressures and social
strains described in reftel. Managing them will require
improving livelihoods of the millions of people who make
their living from the land there. Prospects for such a
fragile state as Chad depend on it.


11. (U) Khartoum Minimize Considered
WALL


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