COTTON REVITALISATION IN

NIGERIA:
THE WAY FORWARD

INTRODUCTION
Agriculture is life.

Agriculture has been a critical profession from

the Beginning

Intro. Cont.
God did the first planting of a garden after

creation.
Thus, Agriculture was the profession God
initiated Man into at the Beginning.
Interestingly, Man was a naked farmer along

side his wife. Initially they both had no clothes

on .

Man did not care that he was in the nude;

He had no felt need for clothes at all until

Intro cont.
Man and wife suddenly felt dissatisfaction with

nudity and sought a remedy; Realisation of nudity

came with acquisition and display of new skills
such as hide and seek and other related self
defensive traits by man and wife.
o Man can now hide; He also can now defend self.
They reached out for leaves plucked from one of
the trees to use as a covering. Surprising indeed.
Why the choice of leaves for a covering of naked

flesh?

Intro.

cont.

It was clear man and wife needed help.

Though they made no request the first

intervention came from God(Genesis 3.21).

Pronto. There came the 100% Designer
outfit for man and wife from God. It was a
gorgeous outfit made from the skin of an
animal.
Cotton plant was later discovered by man
as a material that could be useful for

Intro. cont

The cotton industry in Nigeria has been

described as comatose, i.e.: Deeply

unconscious; In a coma; Extremely tired;
Lacking in energy; and Sleeping deeply.
and in dire need of revitalisation, i.e. make
stronger; more active; and more healthy.

Economic Importance of Cotton

Cotton is important in three major ways:

1. At the national level, cotton has

economic, strategic and political
significance (provision of employment and
means of livelihood to countless number of
families);
2. As a national political weapon, cotton is
crucial in maintaining political, social and
economic stability and for ensuring peace
and contentment among the populace

Economic Importance of Cotton

The lint is universally a textile raw material;

the seed serves the oil milling industry; the

stalk goes for particle board manufacture;
among others.

3. At the international level, cotton is one of

the largest items of international trade

Agricultural Marketing
as a Speciality
A quick mention of wrong notions about
marketing
Marketing is not just buying and selling of
commodities;
It is not the weakest link in the chain of
economic activities;
It is not in any way less quantitative in its
analytical techniques;
It is not in any way less quantitative in its
analytical techniques;

Agricultural Marketing
as a Speciality
Rather, marketing is the precursor to any

meaningful economic production activities

Production planning must go on

simultaneously with planning on marketing
The term marketing embraces buying and
selling operations, transport, storage,
processing, packaging and presentation for
sale, promotion for sale and advertising

Importance of Agricultural Marketing

to Economic Development
Distribution role in Marketing is vital to

economic development by changing

demand and cost functions in ways
favourable to development.
Marketing of agricultural products is a
necessity for an economy to rise above
subsistence level. Failure to achieve this
could doom the economy to a cycle of
poverty.

Importance of Agricultural Marketing

to Economic Development
Marketing is a tool for development policy;

instrument for regulating and executing

development process.
Agricultural Marketing contributes to:
o job creation for the populace and
industrialisation.
o increase in scale of production for the farmers
o income generation to more participants in the
value chain
o reduction in inequality in income distribution
and poverty in the society

Research in Agricultural
Marketing
Researchers working on problems of

agricultural marketing generally belong to one

or another of the following schools:
1) the traditional approach of describing the
links between producers and consumers, and
of evaluating marketing cost, and pricing
efficiencies. It has been called What
happens school;
(2) the neo-classical approach of stressing the
dual role of marketers in allocating resources
by coordinating economic activity;

Research in Agricultural
Marketing
o (3) the equity oriented approach by those who

feel that neither one of the above approaches

is sufficiently concerned with equity, income
distribution and risk bearing among market
participants; and
o (4) the system approach, a derivation of the
above three schools.
o The study of marketing issues in developing
countries has again been classified into three
broad categories namely: feasibility studies,
descriptive studies, and diagnostic
assessment.

Research in Agricultural
Marketing
o The descriptive studies have incorporated the

structure - conduct - performance (S-C-P)

approach which has been applied widely to
the analysis of prices, market competition and
market efficiency.

COTTON MARKETING IN NIGERIA

The story of cotton marketing system in Nigeria
can be
told in 3 phases:
Cotton Marketing in the PreIndependence Era- Early efforts to formalise
produce marketing in Nigeria can be traced to the
1930s when European companies were involved in
direct purchase and export of Nigeria essential
raw materials for overseas industries.
Cotton Marketing in the PostIndependence Era- In 1977 the regional
marketing boards were reconstituted on single

COTTON MARKETING IN NIGERIA

Later, the boards came under much criticism

following the mode of operation. The commodity

boards main function of price stabilisation was
criticised . There were controversy about the
activities of buying agents engaged by the
boards. The boards were also faulted in the
policies employed in the area of taxing and
commodity pricing .

COTTON MARKETING IN NIGERIA

It was found that the pricing policy of the

boards dampened producer incentives;

restricted output and employment in
agriculture; and was
accountable for the decline in Nigerias
share of world commodity trade.

COTTON MARKETING IN NIGERIA

Cotton Marketing in the Structural

Adjustment Programme EraThe commodity boards were abolished in

1986.
Market liberalisation was introduced in line
with globalisation. Thus, the elimination of
the excessive implicit taxation of farm
incomes inherent in the Commodity Board
System
Farmers were provided incentives through
increased producer prices.

COTTON MARKETING IN NIGERIA

Disbanding the board meant (i)the withdrawal

of all forms of government participation from

product marketing and (ii) liberalisation of the
market.
Objective of agricultural policy under the SAP

was to invigorate the nations agricultural

economy and to economically empower all
categories of participants in the market
Commodity market was liberalised to
introduce competition.

The Post-SAP Cotton Marketing System

The Structure of the Post-SAP Cotton

Market in NigeriaDeregulation policy permitted private sector

participation in commodity marketing.
o The structure comprises all the participants in
the market farmers, sellers, buyers, buying
agents, outgrower, agrochemical dealers,
transporters, bankers, textile processors, oil
millers, feed millers, food vendors, mechanics,
financial institutions etc.

The Post-SAP Cotton Marketing System

The Conduct of the Post-SAP Cotton

Market in NigeriaMarket deregulation removed all barriers to

entry to the market and introduced
competition.
However, market deregulation sought to

establish the state of effective (workable)

competition in the market.

The Post-SAP Cotton Marketing System

The decentralization of the cotton market

implied the absence of centralized fixing of

producer price and prices of marketing
services.
The Performance of the Post-SAP Cotton
Market in NigeriaMarket performance is the outcome of
market structure and conduct.
Market Integration-provides an
understanding of the interaction among prices
in spatially separated markets.

The Post-SAP Cotton Marketing System

Markets in which prices of differentiated

products do not behave independently.

An integrated market is synonymous with
pricing efficiency
It is noteworthy that no cotton market
working in isolation can exert influences.
Rather, markets are interdependent with each
other, and there exists smooth price
dissemination among traders.

The Post-SAP Cotton Marketing System

The index of market connection gave

indication of degree of short-run integration

among marketing at different locations.
There was little and a very low level of market

integration among the cotton markets.

The cotton market was price inefficient and

manifested a high degree of market

segmentation.

COTTON PRODUCTION IN NIGERIA

Cotton is produced mainly in 24 states in the

Federation wholly as a rainfed crop.

Seed cotton is produced mainly by small rural
farmers as an annual cash crop on small
farms.
Production is labour intensive
Sector has witnessed great degree of
fluctuations (qty produced, consumption,
exports and imports of cotton lint).

COTTON PRODUCTION IN NIGERIA

Sector has been deeply afflicted over the past

years by turbulent storms occasioned by a

myriad of factors.
There are numerous constraints to cotton
production and marketing in Nigeria.

Cotton Revitalisation
Cotton Textile and Garment Revival fund
o Federal Government introduced the 100 billion

Naira CTG revival fund (managed by the Bank

of Industry, r = 6%, t =5yrs).
o This is part of the new national cotton, textile
and garment policy.

The way forward

Political Stability - A stable polity is a

prerequisite for factor mobility.

A Stable Macro-Economic Environment Complimentary policies in trade, monetary
and investment are critical for the success of
the cotton revitalisation effort in Nigeria.
Trade and Investment Policy Consistency
-Nigerias national agriculture trade policy
must be consistent and compliant with
relevant international treaties and
agreements.

The way forward

cont

Value Chain and Value Addition-The focus

here is on post-harvest value-addition,

economy diversification and employment
creation in the rural and urban areas through
the establishment of agricultural commodity
processing industries.
Longevity of Agricultural Sector PoliciesAgricultural policies must endure and outlive
the government that formulated them in order
to ensure sustained and increased inflow of
investment in agriculture.

The way forward

cont.

Sectoral policies for promoting

agricultural products trade and

investment-The objective of these policies is
to enhance public resources efficiency and
increase private sector participation in
agricultural investment and market
infrastructure.
Encourage Private Sector Participation
Apply Stringent Measures against
Dumping-This will stimulate local production,
increase market share and create additional
direct jobs in the industry.

The way forward

cont

Supportive Infrastructure-especially

complimentary investment by the government

in roads, logistics, storage facilities, power,
irrigation, flood control, rail, etc.
Intensification of Cotton production at
reduced cost-As long as the cost of
production of cotton remains high in Nigeria,
the commodity will remain uncompetitive both
locally and internationally.
Revive and strengthen the out grower
scheme-The cotton buying firms have
adopted this strategy in order to boost their

THE WAY FORWARD

cont

Funding of Research and Development-

funding to the existing research institutions

and related organisations such as the
Universities and the Faculties of Agriculture .
Marketing and Distribution
Extension Services-The Unified Extension
System should be given the necessary
financial, institutional and logistic support.
Legislation for quality assurance and
grading

The way forward cont.

Increased public sector funding and

prioritization of public sector investment

programmes in agriculture.
increase the capital and recurrent budget to
agriculture and ensure its timely release,
prioritization of public sector investment
programmes in agriculture is required.

The
End

Thank you for

your attention

Acknowledgements