Revisiting the "Cotton Problem:" A Comparative Analysis of Cotton Reforms in Sub-Saharan Africa

The cotton sector has been amongst the most regulated in Africa, and still is to a large extent in West and Central Africa (WCA), despite repeated reform recommendations by international donors. On the other hand, orthodox reforms in East and Southern Africa (ESA) have not always yielded the expected results. This paper uses a stylized contracting model to investigate the link between market structure and equity and efficiency in sub-Saharan cotton sectors and analyze the potential consequences of orthodox reforms in WCA. We argue that the level of the world price and of government intervention, the degree of post-reform competition, as well as the degree of parastatal inefficiency, all contribute to making reforms less attractive (but not less pressing) to farmers and governments in WCA today, as compared to ESA in the 1990s. We illustrate our arguments with empirical observations on the performance of cotton sectors across sub-Saharan Africa.