TRALAC - Trade Law Centre

Zambia: AGOA isn't only about Apparel

Wednesday, 11 August 2004

Source: Ghanaian Chronicle (Accra)

"The Presidential Special Initiative (PSI) on garments which is currently enjoying a renaissance through the African Growth and Opportunity Act (AGOA) initiative cannot be sustained in the long run if something drastic is not done for the Ghanaian cotton industry, to help the farmers increase their production to make them competitive on the world market.

The producer of cotton in this country is basically found in the northern sector and to be quite truthful about it, they have been totally marginalized.

Not only have subsidies in the cotton production sector been lifted such that these poor farmers have had to literally scrape along to make a living, but the banks are loath to give them the financial support they need to expand.

The removal of the subsidies was part of the conditionalities imposed on us by the World Bank and the International Monetary Fund as was the decision to divest the only ginnery we ever had: the Ghana Cotton Company.

According to reports reaching us, the divestiture process has not been as transparent as it should be and the company that has now taken over the numerous assets of the Ghana Cotton Company, called GhanaAmer has met with the workers and made all sorts of promises that encouraged them to believe that the company, built with state resources, would soon be revamped and put on a footing that would help it meet the growing needs of those in the AGOA programme.

So far, the new company has failed either to bring in new inputs or even rehabilitate the factory they have bought. The workers are not happy at the way things have been going (or rather have not been going). At the peak of the growing season, the farmers have still not received the seed inputs they require and fertilizers are not available. As for the other inputs, forget them.

Apparently, all this has caused a lot of stress and anxiety among the farmers and most of them are resigned to the fact that the government, despite its avowed declaration to make Ghanaian products take world center stage, does not really care for the plight of poor cotton farmers in the north. As far as these farmers are concerned, the government is putting the cart before the horse: How can you encourage the export of garments without making sure where the raw materials will come from?

In say the next decade when the PSI on garments has made real strides on the American market, where will we be sourcing our cotton from?

Are we going to depend on cotton imports from neighbouring continues like Burkina Faso to feed the growing list of clothing manufacturers?

The Chronicle believes that if things must be done, they must be done well. The government owes it to the poor cotton farmers of the northern regions to make sure that the right things are done. And the only thing is that a Presidential Special Initiative in cotton must be actively promoted and encouraged to flourish to feed the growing demand for the quality cotton produced in the north for which this country is famous.

Now that the World Trade Organisation (WTO) has reluctantly agreed that rich nations should cut the subsidies on their agricultural produce, we believe the time has come for cotton-producing countries to rise up to the challenge and help their farmers increase their produce. Of course we are talking about the developing countries in this respect since they stand to gain most in this new world order.

The Chronicle calls on the President to give a serious thought to this need to encourage cotton production in the country. Now that the big Western producers are going to lift subsidies, the world market prices are bound to rise and we shall get our money's worth on the international market. Our cotton farmers will then also be able to smile all the way to the bank.

As for the hasty divestiture of the Ghana Cotton Company, the sooner something is done about it, the better it will be for the ruling government since many unsavoury things are being said about it. We hope that the sale of the company will soon be reviewed so that a proper and equitable decision is arrived at, that will make it a key player in the local cotton industry."



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