Ethiopian Business Review

Navigating the Debates on GM Cotton the urgent need to Boost cotton production in Ethiopia

Cotton, a natural fiber, has been grown in Ethiopia for millennia. However, the local production hardly satisfies the demand of textile industries in the country. This is despite the fact that a total of three million hectares of suitable land, which is equivalent to that of Pakistan’s, the fourth largest cotton producer in the world, is available in the country. To reverse the situation, Ethiopia recently started experimenting with Genetically Modified (GM) cotton variety known as BT cotton. 

GM cotton varieties have proven to be successful in India, China, Pakistan and US. Currently, 25 million hectares of land is cultivated around the globe with this variety. Ethiopia is moving in the same direction. However, there is a recent development in which growers’ of the commodity are reverting back to locally improved cotton seeds. EBR’s Ashenafi Endale has delved into the matter and spoken to researchers, policy makers and industrialists to offer this report.

Often listed at the top of the major bottlenecks for the Ethiopian textile and garment industries growth is the country’s vastly untapped potential and grossly underperforming cotton production. Bent on reversing this course, the country has been gripped by a lingering argument between two camps of thought in which one is calling for improving existing cotton varieties where nature does all the selection, while the other group calls for a more hands on approach with Genetically Modified (GM) cotton varieties being widely farmed in other countries. 

The debate is taking place in a context amidst Ethiopia is making a significant march to become Africa’s hub for light manufacturing industries with various international textile and garment brands already settling in several newly established state-of-the-art industrial parks.  
Demand for cotton could not be at a higher pitch in Ethiopia as it is now. The ardent desire of the government to solve the problem is vividly notable with its enforcement of a relaxed and less strict approach of its amended Bio-Safety Proclamation. The amended law, which came into effect in 2015, allows the utilization of biotechnology to genetically modify cotton varieties that are more disease resistant and productive. 
Haftom Tesfay, general manager of Hiwot Agricultural Mechanization, finds himself at the heart of the debate. His company, established 25 years ago, was on the verge of throwing the towel, struggling to stay afloat in the cotton cultivation business before the government made the biotechnology proclamation for cotton production more flexible. He complains on the misfortune of his company due to the depressing level of cotton productivity and falling demands in the market on the ground of poor quality. 
“The only reason, we could not stop cotton harvesting and totally shift to sesame was because we have a sister ginning company that depends on the cotton we cultivate.” he told EBR. His 8,000 hectares of land and the ginning facility are located in Humera, in the state of Tigray. 
“We never exceeded cultivating 3,000 hectares of this land for cotton cultivation.” Haftom noted while the rest goes for sesame and sorghum, which are less costly to cultivate and harvest. “Cotton incurs more expenses and requires labour.” 
The irony for Ethiopia, which actually has a better cotton production record than some countries, is that its cotton farmers like Haftom are producing more of the less demanded short fiber variety at least in the local market.  
Depending on the availability of adequate water during cultivation, the fiber of cotton can be long, medium and short. If the cotton is sufficiently irrigated, farmers will have the highly sought often long fiber, or on the contrary, if the farm is usually dependent on unreliable rain fall, it will most likely produce short fiber cotton. 
In Ethiopia, the problem of producing predominantly short fiber cotton is compounded by the prevalence of the African Ball Warm (ABW), a cotton-boll eating larva of fireflies. This is where proponents of the GM cotton make their case for Ethiopia to adopt this variety. 
GM cotton varieties supposedly resist the ABW and require less amount of insecticide compared with the local cotton varieties. Following this argument, the government eased its strict policy on biotechnology. Accordingly, the Ethiopian Institute of Agricultural Research and the Ministry of Agriculture and Natural Resources commenced conducting ground tests on GM cotton varieties in different parts of the country two years ago. 
Haftom’s company decided to take full advantage of the scheme and signed up for the test allocating 200 square meter of land for the experiment. The test involved planting GM varieties, scientifically adopted by transplanting selected DNA chromosomes from other plants, and observing its rate of success in resisting diseases. 
The Institute has been field testing Bt cotton, a GM cotton variety on confined plots, for the past two years. Findings of the first year tests show negative results where the test subject failed to resist diseases. Experts from the Institute have been dispatched on October 22, 2017 to Werer Agricultural Research Centre, in the state of Afar along the Awash River, to evaluate findings of the second year testing. 
But government officials remain positive despite the not so rosy results of the first year tests. “It will be farmed in a few months time, if the second test is positive,” states Yared Mesfin, deputy director general of the Textile Industry Development Institute (TIDI). 
There is a mounting impetus to transform cotton harvest in Ethiopia with policy metrics from the National Planning Commission and strategic directions from the Ministry of Industry (MoI) clearly stating that the sector should receive priority. The government is well aware of cotton’s potential not only as a stepping pad for industrialization, but also its capacity to absorb large chunks of unemployed youth. By the end of the second phase of the Growth and Transformation Plan period, 2019/20, the government aims to raise cotton productivity to 2.8 quintals per hectare from the 1.7 quintals per hectare in 2014/15. 
Ethiopia is in a race against time when it comes to cotton production as more and more textile companies join the market. In fact, cotton demand is rarely sufficiently met by local production. The current annual demand of the commodity is 75,000 tons, three times the demand in 2008. 
In 2015/16, Ethiopia stood tenth in Africa among cotton producing countries with 40,000 tons of lint processed by local cotton mills. Supply and demand is a game of chase and catch with production. If there is surplus of production in a given year, there will most likely be no shortage of the commodity to meet demands, but a dramatic decrease in prices, which often forces farmers to cut production in the coming year leads to another cycle of shortage. 
For instance, in 2011/12 fiscal year farmers harvested surplus cotton following the surge in demand. However, the market was over supplied with cotton and prices plummeted by half. So the following year, farmers cut production and the cycle goes on. 
Close to 150 investors working on cotton and 40,000 small holder farmers have so far utilized less than 3Pct of the 3.1 million hectares of land suitable for the commodity.  The country has the potential to produce two million tons of lint annually, according to estimates by the MoI. Half a million people are employed in cotton production.  
Despite local producers’ growing effort to produce enough for local market and export, textile companies in Ethiopia prefer to import the commodity. Documents obtained from TIDI indicate that in the last fiscal year alone 10,000 tons of locally produced cotton was in stock, while several textile companies were importing the commodity. 
“Local cotton cannot be used for export products, due to its unsuitable quality.” said Elias Tesfaye, owner and general manager of Eltex Textile and Garment Factory. The company imports cotton and polyester for its products destined for export. “Local cotton is good for making local traditional wear such as netela and abujedi.”
Quality of cotton is measured by the length and strength of its fiber. As a standard, a cotton fiber with 26 millimeter and 28 millimeter of lengths are considered short and medium, respectively. If the cotton fiber reaches 34 millimeter, it is classified as long fiber. The same cotton variety can produce both lengths depending on its water supply. 
Due to poor quality of cotton, Elias’s company is operating in its half capacity. “Locally harvested cotton only satisfies 10Pct of the orders from our international customers.” 
Most textile companies in Ethiopia require long fiber cotton as their input to produce T-Shirts and other soft garments. Short fiber cotton is usually utilized for stronger fabrics such as jeans. Kanoria Ethiopia is one of the few companies producing jeans in the country. The cotton value chain in Ethiopia which involves harvesting the cotton, ginning, spinning until turned to textile and garment factories is poorly developed. “Only companies like Ayka Addis and MAA Garment have standard spinning facilities to serve their own needs.” Elias told EBR. 
 
 

In Ethiopia, after cotton is harvested, the yield is usually 
piled up in open fields widely exposed to quality 
affecting elements.
 
Genetically speaking, Ethiopian cotton varieties have no intrinsic defects, according to Yared. But the critical problem takes place in the post harvest stage. “Contamination is a big issue because cotton farms are far away from ginneries.” Samson Teffera, director of Cotton Development Directorate at TIDI told EBR. 
In Ethiopia, after cotton is harvested, the yield is usually piled up in open fields and widely exposed to quality affecting elements. This leads to contamination by dust, sun light and moisture. The cotton further endures more damages when it is transported to the ginneries in packs which break the fibers.
Moreover, quality of cotton is compromised as some farmers mix other materials in the cotton to give it weight.
Both improved and GM varieties can produce long or short fibers depending on the water supply. Ethiopian cotton farmers have been widely using Delta Pine 90 (DP90) seed variety. After being cultivated for over two decades, Samson states that this variety is losing its disease resisting capacity. The widely cultivated variety is losing the battle against ABW and has set the precedence for the country to test more disease resistant GM varieties. 
But this decision has faced strong criticism from people who prefer Ethiopia to remain with local varieties. “People think GM cotton is the silver bullet for boosting cotton production in Ethiopia, but its success against disease is yet to be proven on field tests,” argues an official at the Ethiopian Cotton Producers Association, speaking to EBR on conditions of anonymity. 
The argument for and against GM cotton varieties is also expressed in how much pesticide is required for a good harvest. “Currently farmers have to spray pesticides up to six times for the DP90 cotton. However, the genetically modified Bt cotton can minimize that significantly.” Samson argues. 
But proponents of improved varieties argue that pesticides such as the byproducts of sugar and molasses are cheaper, locally available, environment friendly and effective in eliminating ABW. “We have proved this with small holder farmers in North Gondar in the state of Amhara, where a kilogram of molasses became successful on four hectares of cotton farm.” explains the official from the Association. 
The same official is also keen to point out that Bt cotton is more expensive compared with local variety seeds. “Currently a kilogram of the local cotton seed is sold at ETB35, while the same amount of the Bt variety is sold at USD20, roughly ETB550”.  However, the seedlings of the Bt variety cannot be used more than ones.” he added. 
International voices propagating organic cotton varieties are also airing their concerns over GM varieties. “The burning issue in the Ethiopian textile industry is not just about increasing productivity, but also going about it in an environment friendly manner.” Asfaw Alemayehu, managing director of Gazebo International, a company working to promote sustainable cotton sourcing from Africa said while addressing the recently held Africa Sourcing exhibition at Addis Ababa’s Millennium Hall in October, 2017. 
“Giant global buyers and individual consumers are also increasingly less interested in GM cotton varieties for environmental reasons and the demand for organic cotton is on the rise.” official from the Association underscore and express the baffle with the government’s inclination to take GM varieties as an alternative for boosting cotton production. “It’s not rational to go against global trends both in terms of price and farming techniques.” 
 
The size of land to 
be covered by cotton 
by 2032
 
 
Cotton harvesting in Ethiopia is affected by a number of factors including challenges of unpredictable markets, price manipulation, shortage of loans, and issues of land administration. On October 12, 2017, amidst all the problems faced by the sector, MoI and TIDI launched the first ever National Cotton Development Strategy. 
While the road map set in the strategy is arguably introduced late, seven years after the first five year Growth and Transformation Plan was introduced, it was hastily put together as witnessed when it was sent back for further study before endorsement. It also did not put clear directions whether the country should adopt GM cotton varieties or strictly adhere to organic cotton. 
“It’s late.” Mebrahtu Meles (PhD), state minister of MoI said. “Despite the high potential for cotton harvest in Ethiopia, the demand still remains largely unfulfilled resulting in a deteriorating market for the commodity. Cotton is among the top priorities of the government.” he underscored. 
Compiled by Sofreco, a French consulting firm, the strategy envisages increasing the land covered by cotton to a million hectares, to produce 2.6 million tones of seed cotton, 1.1 million tones of lint, and 1.4 million tones of cotton oilseeds by 2032. By then, Ethiopia will be an important cotton producer in the global market. Improving quality of seed is crucial to achieve this plan. 
The document articulates strategic directions which include improving policy and institutional capacities, increasing transparency along cotton value chain, creating environmentally and socially sustainable supply chain, raising competitiveness and profitability of the production system. It also needs strengthening investment as a vector for growth and integration in the cotton value chain.  
The document also calls for the establishment of the Ethiopian Cotton Development Authority to implement the strategy. However, the recommendation was rejected by the MoI. “Ethiopia has untapped cotton potentials; yet, the country is not a significant player in the international market. To curb this regulations are needed in the industry and on environmental issues. Value chain systems must link to the industrialization target, and also job creation.” Barry Fisher, Garment Sector leader at Enterprise Partners, who financed the study, said during the launching of the strategy.
But there are some critics on the strategy. “It lacks mandate analysis.” says Yared. Samson is also skeptic about establishing an authority. “The government wants to know what lacks in the existing institutions to fully utilize the potential of the country in making the most out of the commodity. If the analysis justifies why existing stakeholders cannot shoulder the mandate, the option will be establishing another institution.” 
“There is no structural problem, but lack of coordination and capacity among implementing institutions [is crucial].” states Mebrahtu. Yared agrees and argues that the existence of institutions is meaningless. He is vocal about the need to integrate their mandates and improve their services to become internationally competent.
6th Year . December 2017 . No.56

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