Ghana to double cotton output to 60,000 T by 2002

ACCRA, June 4 Ghana has set itself the target of doubling annual seed cotton production to 60,000 tonnes by 2002 from 30,000 tonnes per year at present.

The plan was approved last Thursday by a 30-member Cotton Working Group, made up of government officials, producers, millers, bankers and researchers.

``We have a long way to go but hopefully we will reach the target of 60,000 tonnes by 2002,'' Joe Okai, Managing Director of Juni Agro Ltd and a member of the working group, told Reuters.

With its market share of 300 tonnes of lint cotton, Juni Agro is Ghana's fourth largest cotton marketing company.

There are three major cotton firms operating ginneries and eight other companies engaged in cotton marketing.

Ghana does not export seed cotton. All its production is sold to local textile companies at a price much higher than the current world market price.

``We sell to the local mills at $1.80 per kg, while the world market price is $1.20. We are more expensive because we don't benefit from mass production which brings down overhead costs per kilogram,'' Okai said in an interview on Tuesday.

Ghana bans the import of seed cotton and protects its textile industry through a prohibitive duty of 75 percent on imports of cotton products.

The main problems facing the cotton sector are the poor quality of seed, high interest rates, rising prices of fertiliser and other inputs, and declining farmgate prices, making cotton an unattractive crop to grow compared with groundnuts or maize, according to recent researchers' reports.

The meeting gave the go-ahead for researchers to develop higher-yielding seed.

Ghana's major cotton-growing areas are the three northern provinces where thousands of smallholders cultivate about 30,000 hectares.

In order to double production in the coming five years, new areas will have the be brought under cultivation in two provinces further south, Brong-Ahafo and Ashanti, researchers agree.

The main bottleneck for the development of the sector is the macro-economic situation, they say.

``The fortunes of the cotton companies depend heavily on the cost of finance that they give. If macroeconomic policy succeeds in bringing the interest rate down, it will be of significant benefit to the cotton companies,'' wrote University of London researcher Colin Poulton in a report last April.

Interest rates for agricultural credits currently stand at 42 percent.

Rates have been high since end-1995 in a bid to curb year-on-year inflation which stood at 70.8 percent in December 1995 and 29.1 percent on April 30 of this year. Reuters