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Cotton Industry sustains continuous losses as production costs increase
Published in Daily News Egypt on 21 - 07 - 2007

CARIO: Sayyed Farag, a 50-year-old cotton grower, decided that starting this year he will not grow cotton anymore after sustaining considerable losses as he sold a quintal of cotton for LE 600 not LE 840, the price Prime Minister Ahmed Nazif set to help farmers this season.
The loss, which many farmers have suffered, is largely due to a severe deterioration in the quality of the long-staple Giza 70, the once-proud Egyptian variety sold in international markets.
This year's cotton losers are likely to switch to other easier and more profitable crops, like rice.
Recently a report by the cotton exporter's union revealed a sharp decline in Egypt's exports of cotton, coming in at 59,000 tons from last year's 82,000 tons.
This recent crisis is just one part of a bigger problem that dates back to 1994, when the government implemented what's known as "cotton liberalization. Essentially this meant that the government cannot force farmers to grow cotton as they had been able to in the past. "I still recall in the 1970s, our land yielded an average of 15 quintals (a quintal is equivalent to 50 kg) of premium quality cotton per acre. Since the 1990s, it has plummeted to as low as the current five or six quintals, Sayyed said
For a long time Egypt's cotton farmers have been negatively affected by the deterioration of the cotton plantations, due to a combination of severe infestations, high costs of production inputs and ingredients, and unproductive seeds.
The biggest impact, agree many in the industry, came from "introducing a sterile variety of cotton seeds, said an agronomist in Tanta who preferred to remain anonymous. "Former Agriculture Minister Youssef Wal imported these seeds from Israel to hit the Egyptian economy, the agronomist claimed.
Chief of the agricultural services sector Safwat Haddad refuted such claims. He said that Israel is not included among the list of cotton exporters to Egypt.
Current Minister of Agriculture Amin Abaza has also refuted the claims. In a forum organized by Al- Masry Al-Youm newspaper, Abaza described such claims as "nonsense.
Comparing Egyptian and Israeli cotton production, Abaza said that Israeli cotton production as a whole is far lower than here in Egypt. But an acre in Israel produces 17 quintals, compared to six or seven quintals here. Such discrepancy is due to the Israeli adoption of the latest know-how.
Mohamed Aboul Wafa, an agricultural economist at the ministry of agriculture doesn't believe the seed crisis is the chief reason for the low yield.
In the 1999 season, Egypt's principal areas of cotton cultivation in Al-Menoufia, Al-Gharbia, Al-Daqahliya, Al-Sharqiya and Kafr el-Sheikh, were the most badly affected by cotton worms.
Pollution is also an element. According to Ruediger Harnisch, head of the Egyptian-German Cotton Sector Promotion Program (CSPP), some plastic materials are mixed with the cotton plantations - collecting in the plastic bags of the harvest - which take their toll on the cotton.
Harnisch also attributed the low-yielding cotton season to farmers' carelessness in dealing with their plantations and not adopting scientific know-how.
Yet, the main problem is that more and more farmers are discouraged from growing cotton, largely due to increasing production costs. Generally, farmers are increasingly discouraged by the growing expenses of chemicals, pest-control operations and the long nine-month cotton cultivation cycle. Meanwhile the returns are diminishing due to unfavorable fluctuations in international prices. Farmers and experts, however, differ on the reasons behind this increase in costs.
In Al Daqahliya, the area dedicated to this white crop within the governorate decreased from 3,000 acres in the 70s and 80s, to a mere 260 acres now, 200 of which are planted in the small village of Al-Baglya. "We still keep on growing cotton because our land is endowment. As it is not completely ours we don't have the option of growing other easier crops, said Abdo Labib, a Baqlya farmer.
"We also still stick to the crop formation [cultivating compatible crops throughout the year], following in our ancestors' footsteps, said Ashraf Maghloub, a cotton grower.
"Cotton cultivation requires big budgets to cover expenses of labour, renting and fertilizers. Only landowners who have many acres can afford it, said Ashraf Saber, a farmer in Al-Daqhlya.
Prices of cotton ingredients are continuously increasing. "About 20 packages of nitrogenous and potassic fertilizers, which are spread over the cotton plantations, shot up in price in a single year from LE 20 to LE 35, others from LE 33 to LE 45 depending on the quality, Jamal Ali, a salesman in an Agricultural Cooperative said.
"Fertilizers skyrocketed because they are imported like all commodities, said Harnisch. "But when peasants cooperate to cultivate and buy their agricultural ingredients in bulk, prices will be lower and they will finally get higher profits.
The difficulty in finding farmhands, coupled with much money spent on their daily wages and food provisions, discourages farmers even more.
"I can't bite off more than I can chew. Farmhands alone could cause a deficit in the fund set aside for the cotton, said Adel Shehab, a farmer in Zagazig.
"Cotton cultivation needs skilled labour, with on-the-job experience of cotton picking and worm control. After abandoning cotton growing, new generations grew up without even knowing what these worms look like, said Ashraf Sharf Edene, a farmer in Al-Daqahliya.
Labib suffers from the rising decrease of children who are "more easygoing, obedient and, above all 'economical.' A child receives LE 5 per day.
Labib hires adult farmhands and pays between LE 15 to LE 30 per day for each. "To grow an acre of cotton, you need about 60 farmhands for help in thinning, plowing, three hand pickings of cotton and cleaning the in-between grass or weeds.
Cotton picking makes up 55 percent of production costs.
Abeer Badran, a researcher at the Land Center for Human Rights, says the main reason for the deterioration in the cotton cultivation industry was the change of land renting laws in 1992. The rates jumped from LE 100 to the current LE 3,000 and LE 4,000 due to these changes. That's why, Badran explained, many shifted to other more profitable crops like maize to make up for this increase.
"In the 1970s and 1980s, we paid LE 60 as rent to the landowner. He shared half of the farmland expenses with us in exchange for getting half of the harvest. Today, I have to pay LE 3,000. If I plant this capital-intensive cotton, surely I will lose, said Ramadan Al-Sharqawy, a farmer.
According to the pattern of crop seasons, farmers have a couple of options, either clover or wheat in winter, or cotton, rice, maize, onion or the like in summer. "If a farmer grew wheat in winter, he can't grow cotton in the summer because cotton is exhausting to the soil. It has to be prepared beforehand by first growing clover or something similar, Aboul Wafa of the ministry of agriculture said.
Even if farmers choose to plant clover during the winter season, cotton would still not be the best option for the summer for many reasons.
Firstly, clover can grow by itself four times after the first harvest, so a farmer can get five crops of clover without exerting much effort in growing it. In contrast, cotton is financially and physically draining. Clover doesn't require many farmhands. "In the nine-month cotton cultivation period, I can grow two crops of rice and wheat and get a double-benefited yield, farmer Mohamed Homos farmer.
The total harvest of clover is five crops, priced at LE 1,000 each, so a farmer makes an average of LE 5,000. But cotton needs intensive care throughout the eight months, yielding at best LE 4,000, of which 60 percent is spent on the cultivation process.
Eliminating minimum prices for cotton without any protection against market fluctuations and the elimination of government subsidies, however, is argued to be the final straw that broke the framers' resolve.
"Scraping the guaranteed floor prices for cotton deliveries left us at the mercy of the private sector's monopolistic practices who are the only beneficiaries, said, Ali Abd ul-Azem, an agricultural engineer.icultural engineer.


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