BENIN: 2006-2007 COTTON HARVEST IN JEOPARDY

UNCLAS COTONOU 001167 SIPDIS SENSITIVE SIPDIS DEPT FOR AF/EPS:KRZYWDA, AF/W:BANKS, EB/TPP/ABT:LERSTEN DEPT PASS TO COMMERCE:MD'ANDREA AND USTR:AHEYLIGER/LAGAMA PARIS FOR D'ELIA DAKAR FOR FAS (RHANSON) E.O. 12958: N/A TAGS: ECON EAGR EINV PGOV BN SUBJECT: BENIN: 2006-2007 COTTON HARVEST IN JEOPARDY REF: A) COTONOU 752, B) COTONOU 937 AND PREVIOUS ¶1. (SBU) SUMMARY: Late rains had compelled Benin's cotton experts to revise their 2006-2007 harvest estimates from 500,000 tons (the GOB's official target) to 350,000 tons, and the crop now faces damage by insects. Comment: A poor 2006-2007 cotton harvest will not necessarily lead to economic collapse. Another bad season, however, would be an important symbolic defeat for newly elected President Yayi and constrain his efforts to reinvigorate Benin's economic growth. END SUMMARY. ¶2. (U) In late October 2006, local media and cotton producers reported that the cotton pest, "Helico Verpa," had attacked farms in the country's largest cotton-producing zone around Banikoara in northern Benin. According to news reports, the 100,000-ton harvest originally expected from that region will now be less than 40,000 tons. Other regions also have reported some pest damage. ¶3. (SBU) Many farmers have blamed importer/distributors of agricultural inputs for a tardy and insufficient supply of pesticide. The main importer/distributor, however, maintains that the current situation is the result of the refusal of cotton farmers in the affected region to use a substitute pesticide that was available in the face of insufficient quantities of the farmers' preferred pesticide. The Interprofessional Cotton Association (AIC), Benin's national association for cotton stakeholders, and Ministry of Agriculture officials have publicly supported the distributor's claims. ¶4. (SBU) The Ministry of Agriculture's Chief of Staff told post that an unhealthy rivalry among competing vendors of agricultural inputs had caused some farmers to use little or no pesticide for the recommended "second treatment" of their cotton plants, thus leaving the plants vulnerable to insects. The same official claimed that unsuccessful public tenders for these inputs during the initial phase of the 2006-2007 cotton campaign led gullible farmers to use little or no pesticide for fear it would hurt their productivity. Though he acknowledged that President Boni Yayi's national production target of 500,000 tons would not be met (Ref B),the GOB official still expected a harvest of between 300,000 and 350,000 tons. ¶5. (SBU) An expatriate businessman close to the embassy, however, told Econoff he does not expect Benin's 2006-2007 cotton harvest to exceed 250,000 tons. While still an improvement on the dismal 2005-2006 figure of 180,00 tons, this falls well short of Benin's annual production of just a few years ago (350,000 - 400,000 tons annually). ¶6. (SBU) COMMENT: Since his inauguration in April (reftels), President Yayi has made recovery of the cotton sector one of the top priorities for his first year in office. Unfortunately, while the government made some progress in clearing arrears and encouraging farmers to plant, the agricultural calendar left the new government little time to implement reforms or improve management in the sector. Disorganization, confusion and delays over inputs, pricing and other issues have hampered recovery in a year when neither the rains nor the insects are cooperating. ¶7. (SBU) A disappointing 2006-2007 cotton harvest will not necessarily lead to economic collapse. Benin's economy weathered the dismal 2005-2006 cotton season relatively well. However, another bad season will be an important symbolic defeat for Yayi and hamstring his efforts to reinvigorate Benin's economic growth. END COMMENT. BROWN