Nothing is going well between the Fédération Nationale des Groupements de Producteurs de Coton ( FNGPC COOP-CA) and the OLAM Group, which has controlled the sector since 2020. Breathless and disillusioned, Togolese cotton growers are calling loud and clear for the OLAM Group to go, while calling on the Head of State, His Excellency Faure Gnassingbé, to play his mediation card.
If not, how far will the tug-of-war between OLAM Agri, which holds a majority stake of 51% in Nouvelle société cotonnière du Togo (NSCT), and the Fédération nationale des groupements de producteurs de coton (FNGPC-COOP CA), which holds a minority stake of 25%, go?
To understand a little of what's happening, let's just go back to June 29, 2020, soon to be 4 years, when the deputies of the then 6th legislature unanimously voted to sell 51% of the 60% of shares held by the Togolese state in the capital of the Nouvelle société cotonnière du Togo (NSCT) to the OLAM group, an Asian giant.
"The State's share will be sold for 51% and the national interest will represent 49%, i.e. 40% for the cotton growers and 9% for the State", explained Sani Yaya, Minister of the Economy and Finance, at the time. The amount of the sale, a mere 22 billion CFA francs, was to be announced later by the Council of Ministers.
Buoyed by his successes in Chad, Côte d'Ivoire and Gabon etc., the new boss of white gold, Olam Agri, has set himself the crazy challenge of removing the ceiling on growth in the sector.
Before OLAM: production down from 137,000t to 116,000 tonnes (ceiling)
One of the arguments put forward to justify the takeover was that growth in this cash crop had reached a ceiling, and that a breath of fresh air was needed to reach the 200,000 tonne mark for seed cotton by 2022.
"Visibly, everything suggests that we have reached our capacity, and that's why the growers appreciated the partner's contribution and were eager for it to arrive", declared Noël Koutéra Bataka, Minister in charge of agriculture at the time.
"From 137,000t in the two previous seasons, production in the last season fell to 116,000t of seedcotton. Production has begun to plateau, and we need to double it within three years", he added to persuade the deputies.
Compared to the challenge, the arrival of a strategic partner was appreciated by many, even if some key operators in the sector had reservations, arguing that they had not been consulted. Instead, the benefit of the doubt prevailed.
From the government's point of view, this takeover should help to replenish the state's cash coffers. And for the industry's stakeholders, liberalization would help establish better governance of the sector.
The government went further, maintaining that its first and foremost aim is to ensure a secure supply of inputs, so that the seeds, fertilizers, pesticides and mechanization services producers need are available in time, quality and quantity.
Secondly, to develop tracks to help open up certain cotton production zones, while also serving other agricultural crops, facilitating the transfer of production to aggregation centers and processing units.
Finally, guaranteeing a certain level of remuneration for producers over a given period.
On the strength of all the above, the OLAM Group has immediately set itself the ambition, in its investment plan, of working towards the transformation of cotton by setting up textile factories in Togo.
In his terms of reference, he is expected to work towards a substantial increase in cotton growers' income within three years; improve production yields from 600kg/ha today to reach a performance level of at least 900 to 1000kg in the short term; strengthen the industrial park, participate in research and development to optimize cropping patterns, etc.
OLAM should also be involved in rehabilitating rural cotton tracks to improve seed cotton collection and help open up agricultural production zones.
With Olam from 2020: production 46,000t to 70,000 tonnes
From 116,000 tonnes with revenues to producers amounting to 34 billion F.CFA before the arrival of the Olam group, seedcotton production under the OLAM era has fallen dramatically.
According to NSCT data, production fell from 52,528 tonnes (2021-2022) to 46,549 tonnes (2022-2023), before rising again to 67,718 tonnes in the last campaign, for gross revenues of 20 billion CFA francs.
"The 2023/2024 cotton campaign has just ended with the last ginning operations and the payment of the last cotton producer groups. This campaign resulted in a production of 67,718 tonnes, with a yield of 844 kilograms per hectare, this marks an evolution of 45% compared to the previous campaign," states the NSCT in a press release dated May 03, 2024.
The note made public states that "the 2023/2024 campaign generated gross revenues of over 20 billion CFA francs for cotton growers, consolidating the crucial role of cotton growing in rural development and improving farmers' living conditions".
According to the new cotton company, "this rebound marks an important step in the revitalization of this key sector for the Togolese economy", pledging "to continue to support cotton growers rigorously, in order to improve performance and provide ever more effective solutions".
What's more, in a thank-you video capsule to growers, the NSCT while "thanking them for their hard work and resilience in producing remarkable and encouraging results in the 2023-2024 campaign, reaffirmed its unwavering commitment to accompany them to much greater successes."
"With this in mind, we are committed to challenging ourselves and working tirelessly to improve our performance so that we can offer you ever more efficient solutions. We listen to your concerns and are committed to improving payment times so that you can continue to earn and prosper.
Together, we can go further," says the video message.
While it has to be admitted that climatic challenges, subsidy attacks, the demobilization of growers towards soya, and many other factors (soaring input prices on the international market, etc.) have not been in the new cotton masters' favor, some are pointing the finger at the very governance of the sector, which is not yet unanimously supported by the main players.
The malaise runs deep, and the latest developments amplify the tension.
A drop in the price of field-grown cotton sets teeth on edge
For this new 2024 production campaign, which is already due to start, growers say that the price of fertilizer will rise to 25,000 frs and the price of a kilo of cottonseed to 274 frs, compared with 300 frs in previous years.
Faced with these new measures, cotton growers are expressing their discontent and demanding either a rapid revision of the prices announced by OLAM, or the departure of the OLAM group.
They are calling for their economic realities to be better taken into account.
"Today, a grower's operating account is around 300,000 francs per hectare, including inputs, labor, upkeep, etc. If the price of cotton comes to If the price of cotton is 274 francs, how much will the grower earn in the end? Let's be serious, we'd rather not produce cotton if that's the case, because in the end we get the impression that we're producing for someone's profit. We work hard to produce quality cotton, but the prices don't reflect our efforts or production costs," some growers told agridigitale.tg.
At the same time, they point out that prices in other neighboring countries for this 2024 campaign are satisfactory, with Benin at 300 frs per kilo for field-grown cotton, Burkina Faso at 325 frs, Mali at 300 frs and Senegal at 350 frs per kilo. In Senegal, where the price of cotton is much higher, the price of fertilizer is 12,000 frs per 50 kg bag.
"Since OLAM arrived, not a single grower has received a bonus at the end of the campaign, and yet in the past it was these bonuses that encouraged growers to continue increasing production. Today, we are calling for the departure of this group," they say bluntly. Some growers denounce a total lack of transparency and the beginnings of laxity, which would be a source of demotivation for them.
"In the past, the NSCT treated the seeds well before sending them to us in the field. It turns out that the seeds already made available to the GPCs have not even been treated, and that seed treatment is left up to the growers. Worse still, the treatment product is not even available yet", they share.
In the Savanes region of northern Togo, one of the country's cotton-growing areas, growers are citing delays in sowing due to the current unhealthy situation.
"We should already be ready and moving ahead with sowing, because in our region, we normally start sowing around mid-May and finish between June 10 and 15 at the latest. Here we are at this time, the official price per kilo of cotton is not yet known, nor are the prices of inputs. If these prices are not communicated to us as soon as possible, we don't really think we'll be able to give ourselves, because on what basis are we going to take hectares for cotton production?" they ask.
They also point to the non-payment of bonuses on the price per kilo for almost 4 years, an achievement they claim was lost with the arrival of OLAM.
In the Plateaux region, other growers simply want to reduce their planted area from 70 to 50 hectares.
"With the current situation, we're planning to reduce cotton production space a lot to make soybeans and sorghum. Because the sowing and other times are already well advanced", they describe.
According to industry specialists, if the rains come quickly and well, the savannahs will launch their production campaign in May and finish between June 10 and 15, the Kara in June, the Plateaux around June 15 and the Maritime in early July, finishing by the end of July at the latest.
"In the central region where I have my farm in the prefecture of Tchaoudjo, last year at this time, I had already sown cotton. But right now, nothing has yet been done on my land. The situation this year will be chaotic. With the prices they're blowing up, whether it's the price per kilo or the price of inputs, how can producers get by in this situation?
The urgent need for constructive dialogue
The latest news is that the FNGPC's top executives have written to the Head of State, Faure Gnassingbé, to call for the Singaporean group Olam's outright withdrawal from the national cotton business.
"We've had enough, Olam has to go. We want to work with the state as we did before. It's better than being with Olam, which eats alone and doesn't care about producers", says Koussouwè Kouroufei, FNGPC President at agridigitale.
At a press conference on Saturday, players in the sector even disputed the recent figures put forward by the Nouvelle Société Cotonnière du Togo (NSCT).
"These are false figures, and we don't even know by what alchemy they obtained them. Even since they arrived, not a single grower has received a single penny as a bonus at the end of the campaign, despite the rise in fiber prices in 2022 and 2023," sweeps Mr. Kouroufei aside.
"Since their arrival, the yield in the field has not held up. On 100,000 hectares planted this year, we only got 600kg per hectare instead of 844kg. At 600kg, the grower earns nothing. When they arrived, they dissolved the sales and input commissions. As far as procurement is concerned, today only one supplier delivers very expensive inputs. We're disappointed and we're calling for their departure", he adds nervously.
It's clear, then, that the tension between the players is at an extreme level, and that all sides should be called upon to put the ball on the ground to save the cotton industry.
Constructive dialogue between OLAM, cotton growers and government authorities is the only way to restore confidence and promote a productive and beneficial campaign for all involved.
Constructive dialogue between producers and industry players is essential to restore confidence at the start of the cotton production season.
The Head of State is thus called upon to play his mediation card for a consensual and lasting solution to the benefit of each of the sector's stakeholders.
Source : Agrigiditale
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