Tanzania: Only Contract Farming and Biotech to Save Cotton Industry

Contract farming is agricultural production carried out according to an agreement between a buyer and farmers, was initially intended to commence in the 2011/12 season. However, full success is not expected to occur until 2015 due to some reluctance by ginners to get on board.
The system establishes conditions for the production and marketing of a farm product or products. Typically, the farmer agrees to provide established quantities of a specific agricultural product, meeting the quality standards and delivery schedule set by the purchaser. In turn, the buyer commits to purchase the product, often at a pre-determined price. In some cases the buyer also commits to support production through, for example, supplying farm inputs, land preparation, providing technical advice and arranging transport of produce to the buyer’s premises.

Another term often used to refer to contract farming operations is ‘out-grower schemes”, whereby farmers are linked with a large farm or processing plant which supports production planning, input supply, extension advice and transport. Contract farming is used for a wide variety of agricultural products. That is one system of farming that has been tipped to redeem the ailing cotton sector. However, researchers argue that it is through genetic engineering of crops that would see production increase.
Already, improved cotton varieties are expected, and by 2015, the new cotton variety – UK M08 – is also expected to be introduced which should improve yields. It is within this context that the introduction of Bt cotton is considered as one of the main avenues to increase yields via the adding on the licensed germplasm. According to Tanzania Cotton Board, the other avenue in seed breeding is to develop “new hybrid seeds according to various growing zones. One unanswered question regarding Bt is whether or not a hybrid variety is developed to be used, as UK M08 is believed to be an open pollinating variety.
Since the Bt transgene in Burkina Faso- purchased from Monsanto with a licensing fee – is attached to an open pollinating variety, it is feasible that a similar strategy is employed in Tanzania. While Bt cotton traditionally is not developed for increased yields, but rather for reduced pesticide costs and increased profitability, the Tanzanian Cotton Board believes that the strategy will have a strong yield impact.
This improved productivity, however, is not solely attributed to Bt cotton, but also to t the contract farming scheme and improved ability to provide credits and inputs as outlined above. According to the Tanzanian Cotton Board, each farmer should receive a per acre minimum input package, that contains six insecticide treatments and one bag of top dressing fertilizer. A pilot project funded by the Tanzania Gatsby Trust (TGT) in cooperation with the Tanzanian Cotton Board (TCB) provides some support for potential yield increases .
Combining improved input provisioning via contract agriculture with conservation agriculture, average yield per acre increased more than 50 percent from 2008 to 2010 . This was with the combined usage of conservation agriculture – minimum tillage, soil cover and crop rotation (of cotton with maize) – and fertilizer, herbicides and pesticides. In addition, push-pull methods are also applied. With the exception of one year, farmers obtained larger gross margins. Excluding labor cost from the gross margins or only focusing on gross revenue results in all three years having on average higher incomes .
As always, the challenge will rest in scaling up these successes to the intended nearly half a million cotton farmers across the Western Cotton Growing region. The TCB strategy will be key in that venture. For the purpose of this feature, what is important is that these increases were achieved without having gained access to the new seeds. Both with the usage of new hybrid seeds or the added Bt transgene (to hybrid or open pollinating varieties) further improvements are to be expected. Since open pollinated, hybrid and GM seed varieties should be available, a next step would include the careful comparison of all technologies under a managed contracting scheme like the one funded by the TGT.

This would allow evaluation of the Bt transgene’s benefit on yield and overall productivity and gross margins when accounting for the higher costs and potential dependence by farmers moving away from open pollinating seeds. Ghana government recognizes the potential of modern biotechnology in reviving the cotton sector. The country’s Minister for Environment, Science and Technology, Mrs Sherry Ayittey, said this while opening a two-day workshop in the capital city Accra on June 11, 2012.
The workshop, which was organized by the Ministries of Trade and Industry, Food and Agriculture, and Environment, Science and Technology in collaboration with UNIDO aimed to sensitize stakeholders on opportunities available to boost cotton productivity in Northern Ghana. Noting that Ghana’s cotton production had dropped drastically after the 1990s from 45,000 tonnes to 20,000 tonnes per year, the Minister said modern biotechnology holds the key to solving this problem.
A number of effective interventions have emerged to boost the cotton industry globally, including from neighboring Burkina Faso. Confirming the benefits of Bt cotton, Mr. KarimTraore, President of National Union of Cotton producers of Burkina Faso, said farmers are the biggest beneficiaries as they have been saved from exposure to harmful pesticides from eight to two applications, and from time spent in farm spraying.
“These hazards have greatly been reduced and we use the extra time to grow more food crops,” he said. The same sentiments were echoed by a South African farmer Frans Malela present and corroborated by Bhagirath Choudhary who shared India’s 10-year experience with Bt cotton. Mr Frank Van Rompaey, UNIDO Country Representative, said the partnership was aimed at supporting the government in improving competitiveness of cotton and exploring the various options available.

Key recommendations included the need to fasttrack development of a legal instrument for biosafety compliance; development of a communications strategy to systematically engage the public; explore possible suppliers of the Bt technology – their advantages/strengths; create and strengthen an independent farmers/ growers association and establish a national standard based on international standards to ensure high quality Bt cotton seed and lint once introduced. Approximately 160 million hectares of biotech cotton have been successfully planted since 1996, when first cultivated.
Insect resistant cotton, featuring Bt genes, and herbicide tolerant cotton were amongst the first products to be commercialized. Their impact has been substantial in all 13 countries growing biotech cotton, which was ~25 million hectares in 2011. India with 10.6 million hectares, USA 4.0 million, China 3.9 million, and Pakistan 2.6 million hectares are the world leaders.