CAR: THE DECLINE OF THE COTTON INDUSTRY

UNCLAS BANGUI 000104


E.O. 12958: N/A
TAGS: EAGR ECON CT
SUBJECT: CAR: THE DECLINE OF THE COTTON INDUSTRY


1. Cotton and coffee are the most important cash crops of the
Central African Republic. These products were promoted in the
1930s by the French colonial administration. Successive
parastatal companies were established for cotton production and
marketing over the time since the fifties. In 1990, the number
of people involved in the cultivation of cotton was estimated at
100,000 mostly in the northern prefectures of Ouham,
Ouhan-Pende, Kemo, Nana Gribizi and Ouaka.


2. From 21,575 tons in 1992, the cotton production reached to
41,500 tons in 1995 and 50,200 tons in 1997. The Central African
cotton importers used to be European Union country members but
also some Arab countries. Since 1999, the cotton sector started
to experience a major crisis as result of the collapse of the
international market prices. Various adjustment measures were
implemented by the Central African Government, including the
restructuring of the sector, elimination of input subsidies,
lowering of the producer price, and cuts in operating costs of
the cotton parastatal company. According to officials from the
Ministry of Rural Development, the cotton production in 2007 was
estimated at 2,621 tons.


3. Several parastatal companies were created to handle cotton
production and marketing over the time since the colonial era.
The first one was COTONAF, followed by Societe Centrafricaine de
Developpement Agricole (SOCADA) in the 1980s and SOCOCA in 1992.
SOCOCA was privatized in 2002 and became Societe Centrafricaine
de Diveloppement des Textiles (SOCADETEX). As SOCOCA, SOCADETEX
met with difficulties in securing crop credits from the local
banks to purchase cotton from producers and failed to collect
the produce from the farmers. The October 2002 coup attempt
which led to the control of the North (cotton production areas)
during several months by Bozize's men exacerbated the
difficulties of the sector. Many cotton plants in Bossangoa,
Kaga Bandoro, Dekoa, Pende and Grimari were destroyed by
Bozize's men during the rebellion. In many cases, the cotton
farmers fled, fearing military operations, leaving fields and
villages. Since 2006 new rebellions' in the north prevented
cotton production in Ouham, Ouahm Pende Kemo and Nana Gribizi
prefectures, most of the villages being burnt and the population
fleeing to the bush..


Prospects for cotton sector


4. According to an official from the Ministry of Rural
Development, the current Government is committed to have the
cotton sector activities restarted. After the failure of
SOCADETEX to collect cotton from the growers, the Government
created a new cotton public company named Societe de Fibre de
Centrafrique (SOFICA) in February 2008. As with previous
government cotton entities, SOFICA will promote cotton
production and marketing. As of today, the company is not yet
operational. The Government is still looking for private
partner. This kind of partnership in the cotton sector existed
until 1999 with CFDT, a French private company. GEO COTTON
HOLDING, a new French player in the cotton sector is being
approached by the Central African authorities. However in
addition to the insecurity in the former cotton-growing regions,
international market prices continue to be a major constraint to
the viability of the cotton sector in the CAR.

COOK