Burkina Faso's cotton production this year has decreased due to inconsistent rains and high oil prices, frustrating executives and farmers in sub-Saharan Africa's leading cotton producer. VOA's Nico Colombant reports from our West Africa bureau in Dakar that the plummeting U.S. dollar and subsidies to American cotton growers are also adding to the industry's woes.
"We are not satisfied with the production this year," said CelestinTiendrebeogo, the director general of Sofitex, one of three major Burkinabe cotton-producing companies. "We had a bad season. We did not have good rains this year and production is going at a loss."
Production at Sofitex has been estimated at about 380,000 tons for seed cotton, much lower than the expected 600,000 tons, an opportunity missed according to Tiendrebeogo.
"The price of cotton on international markets is going up. It would be a good thing for us to have a better production. This is the reason why I think we are not very happy," said Tiendrebeogo.
Numbers from Burkina Faso's two other major companies, Fasocoton and Socoma, were not immediately available.
Another long-standing reason Burkinabe producers and farmers are not very happy is due to what they view as unfair competition from highly-subsidized American rivals. Burkina Faso produces just six percent of U.S. output, and its producers say they lose out on profit margins because of American subsidies.
Most of Sofitex cotton is exported to China, making Burkina Faso, China's third-biggest supplier of cotton after the United States and Uzbekistan, according to Tiendrebeogo.
On a recent visit to Burkina Faso, U.S. Deputy Secretary of State John Negroponte said the United States will reduce subsidies on its massive cotton industry, but only if the European Union starts doing the same.
In terms of pressing local matters, a Sofitex executive, Abdramane Thiombiano says Burkinabe farmers are worried about their ability to pay back their lines of credit. He says Sofitex is negotiating with banks, and looking at the problem on a case-by-case basis.
Some farmers stopped producing cotton because their operating costs, due to high oil prices, went up an estimated 30 percent, while cotton prices offered to farmers went down, by at least 10 percent.
Thiombiano says farmers will be seeking assistance from the government and lawmakers to compensate for their losses.
The rapidly plunging U.S dollar is also adding to the problem.
Cotton from companies like Sofitex is bought and sold on the world market in U.S. dollars. Farmers are paid in CFA francs, the euro-pegged local currency of 14 western and central African countries. Compared with a year ago, the dollars their crops fetch in world markets buy about nine percent fewer CFA francs for food and shelter in local economies.
Thiombiano says they also want laws authorizing them to plant genetically modified cotton, which he says would improve their productivity, while decreasing some of their costs.
Economists say it is highly likely Burkina Faso will become the second African country, after South Africa, to allow large-scale production of modified cotton, after several years of experimentation.
Negotiations are still ongoing with the U.S.-based Monsanto company, the world's leading producer of genetically engineered seed, to determine seed prices for Burkinabe farmers.