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Impact assessment

Higher standard of living

by Roger Peltzer, Susanne Neubert
One of the largest agricultural public-private partnerships (PPP) in Africa aims to link cotton farmers involved in contract farming to textiles retailers in Europe. Farmers are trained in sustainable production, and their harvest is sold with the brand “Cotton Made in Africa”. First evaluations show that the farmers concerned are making considerably more money than they did before. By Roger Peltzer and Susanne Neubert

In 2005, the Cotton Made in Africa (CmiA) initiative started pilot projects in three African countries. The Otto Group is a multinational retail group based in Germany. It set up the Aid by Trade Foundation (AbTF), which is working on establishing CmiA as a brand in rich nations. Since late 2008, the Bill & Melinda Gates Foundation and the German Federal Ministry for Economic Cooperation and Development (BMZ) are supporting the project. The Gates Foundation and the BMZ together pledged $ 30 million for the years 2009 to 2012 to this PPP which now provides support to farmers in six countries: Benin, Burkina Faso, Côte d’Ivoire, Malawi, Mozambique and Zambia. In the context of the Competitive African Cotton Initiative (COMPACI), some 300,000 cotton farmers get training in new cultivation techniques in order to increase their yields and incomes. In return, the AbTF has committed to developing markets for sustainably produced cotton.

In 2010, ten million items of clothing with the CmiA label were sold. The market value was € 70 million to 80 million. Approximately 4,000 tonnes of certified cotton from Africa were used to make these clothes. Large companies such as Puma, Otto Group and more recently C&A are CmiA’s major partners. Licensing fees and partner contributions brought in nearly € 1 million in 2010. The AbTF and its marketing company are close to the point where they will no longer need public funding. Surpluses from licence revenue are expected from 2013 on, and they are to be re-invested in Africa.

In Germany, CmiA sells better than Fairtrade cotton. Nonetheless, it is not a product for the mass market. CmiA products made up less than two per cent of Otto Group’s total textiles revenue in 2010. CmiA was able to buy only five per cent of 90,000 tonnes of certified African cotton. The rest was sold on the world market as conventional cotton. No doubt, selling remains the core challenge for CmiA.

In September, the AbTF signed a memo-randum of understanding with the Better Cotton Initiative (BCI), which includes companies like Ikea, H&M and Adidas, so CmiA cotton is likely to be sold as BCI cotton, starting next summer. This deal, it is hoped, will provide access to major new customers, especially in English-speaking countries.

Seven cotton companies that work with 300,000 farmers have been certified according to CmiA standards since the project began. By early 2011, 200,000 COMPACI contract farmers had been trained. By the end of the coming year, the number will amount to 300,000 at least. However, teaching farmers new skills is easier than making sure they
apply everything they learn. CmiA stakeholders are currently discussing appropriate incentives and other options to motivate farmers to adopt sustainable cultivation techniques. It is obvious, of course, that attractive cotton prices boost motivation.

Measuring impacts early

Whether a programme has impacts and, if so, what they are, is an interesting question. To answer it in regard to COMPACI, an evalu­ation is being carried out by a Chicago-based institution, the National Opinion Research Centre (NORC). NORC has conducted representative baseline studies in order to establish what the farmers’ living conditions were like before the intervention.

The data show that each farmer, on ­average, has a family of six members. The programme will thus reach 1.8 million people directly by the end of 2012, more than 80 % of whom earn less than $ 1.50 a day. Their farms are usually not even 10 hectares in size. Typically, they grow cotton on one third of their land, the rest is used to cultivate food crops such as corn, sorghum, peanuts and soya.

NORC is using control groups in order to monitor the actual impacts of COMPACI. The methodological challenge is that farmers in the control groups may become COMPACI farmers at any point in time, so it is uncertain whether they will serve as a valid control group in the longer term.

Nonetheless, NORC carried out “mini surveys” in Benin and Burkina Faso, comparing rural communities that have been taking part in the programme for a considerable time with villages that have not done so. The data indicate that COMPACI farmers in Burkina Faso were able to increase their net income from cotton by 45 % and from corn by 30 %. The data for Benin were similar.

These initial evaluation results are not representative, but they suggest that the programme, in four to six years, can boost a farmer’s income by $ 75 per year and hectar. In addition, national production statistics show that the COMPACI areas have increased their share in the national cotton production in the countries concerned.

COMPACI is performing well in regard to aid effectiveness too. The intensive training programme costs about $ 100 per person. In a possible second phase from 2013 to 2015, a further $ 50 will be invested per farmer. At least 450,000 farmers will be reached by then. From 2016 on,
donor money will not be needed anymore. Increasing net incomes by $ 75 per year and hectar could thus be achieved by a one-off investment of $ 150 per farmer. This would be an excellent return on the public and private money invested.

Talking with farmers

In addition to the quantitative analysis, NORC is also carrying out group discussions with farmers, in order to understand their perception of things. On the whole, the farmers involved had the impression that the training is improving their quality of life. What they had learned about organic land management or minimal soil cultivation proved useful for other crops too. Nevertheless, the farmers complained about price volatility. This issue has a bearing on their planning security. The more reliable the foresight is for farmers, the more they will boost their production.

The discussions showed that, on the whole, farmers are pleased with cotton cultivation by contract farming because they are earning money without having to market their harvest. Even farmers who do not have savings can take part in the programme, because inputs are initially paid for by the cotton companies. Cotton is less sensitive to droughts than corn, moreover, so crops can still be expected even when the corn harvest fails.

What the farmers criticised was that no protective clothing for applying pesticides was provided by the cotton companies, and that they lacked loans for investing in transport, equipment and batteries. Batteries matter to them very much – among other things, farmers need them to listen to radio programmes with agricultural information and advice. Some of the complaints were dealt with immediately. For instance, protective clothing was provided. In any event, the group discussions proved to be an important tool for monitoring performance.

Today, COMPACI/CmiA is one of the biggest PPP programmes designed to promote rural development in Africa with a bottom-up approach. German companies and German development agencies have set up the programme in cooperation with African partners. Locally, it is imple­mented mainly by the cotton companies.

The partners frequently exchange ideas and share experiences. There is even an internet-based Cotton University, which is run from Burkina Faso.

The private sector partners and African civil society organisations are represented on the various bodies of the AbTF, so the institutional conditions are in place to allow the project to become self-supporting in the medium term. However, it is a vital challenge to convince retail businesses and consumers of CmiA, so more textiles manufactured with sustainably produced raw materials will be sold in the future. Otherwise, the success of CmiA is at risk in the long run. As for the COMPACI farmers – they have already increased their productivity. No one can take that away again.