BENIN: UPDATE ON 2006-2007 COTTON SEASON

UNCLAS COTONOU 000937 SIPDIS SIPDIS DEPT FOR AF/W (DBANKS) DEPT PLEASE PASS TO USTR (AGAMA) PARIS FOR D'ELIA E.O. 12958: N/A TAGS: EAGR ECON ETRD EINV PGOV BN SUBJECT: BENIN: UPDATE ON 2006-2007 COTTON SEASON REF: A) COTONOU 363; B) COTONOU 156; C) COTONOU 752 and previous ¶1. SUMMARY: On September 6-7, 2006, President Boni Yayi and his Minister of Agriculture toured cotton producing zones in northern Benin to assess the status of this year's cotton crop. Continued financial pressures in the sector and tardy rains have depressed forecasts for the harvest. Benin's Cotton Stakeholders' Association (AIC) predicts a 350,000 metric tons yield from the current campaign, nearly twice last season's harvest but well under President Yayi's target of 500,000 tons. END SUMMARY TARDY RAINFALL DEPRESSES 2006-2007 COTTON PRODUCTION -------------- -------------- ¶2. Several cotton growers visited by the President thanked the new government for settling arrears from the last two seasons (reftels). However, they regretted that lingering uncertainty through the spring about whether they would receive the arrears had delayed sowing of this year's crop. Tardy, yet torrential, rains will also depress the harvest, which is unlikely to hit President Yayi's target of 500,000 metric tons. Mr. Barthelemy Gagnon of the AIC has noted that cotton seedlings started to rot when heavy rains poured on some areas. Some farmers affected by this unexpected situation had no option but to sow new seedlings. While overall acreage in cotton has increased by up to 50,000 hectares this season, Mr. Gagnon predicted a harvest of 350,000 metric tons as the best to be expected. OTHER COTTON GROWERS STILL WAITING ON ARREARS -------------- ¶3. In another cotton producing town President Yayi visited, growers said they are unmotivated and planted only limited acreage of cotton. They said they were still owed arrears from previous harvests by the local ginning factory, Marlan's Cotton Industries (MCI). Agriculture Minister Gaston Dossouhoui told the farmers that the GOB had not yet covered those arrears, because Mr. Martin Rodriguez, the CEO of MCI, has refused to sign an IOU with the government for the debts. The Minister emphasized that with such an IOU the government would then pay the debts and pursue reimbursement from the ginners. According to the AIC's Gagnon, Rodriguez and MCI still owe farmers USD 7,647,058 (3,900,000,000 CFA). ¶4. COMMENT: The Yayi government's efforts to clear debts to cotton farmers and boost production have had some impact on productivity, even if somewhat less than hoped. The current projection of 350,000 metric tons is a significant increase over last year's dismal crop of just under 200,000 tons and is in line with other recent year's crops of between 300,000 and 400,000 metric tons. END COMMENT. BROWN