Efficiency of Cotton Production and Its Competitiveness In The Gezira Scheme

Abstract

Sudan as one of the developing countries depends on agricultural production and exports. Cotton was a backbone of Sudan economy in the past, but it lost its economic importance due to fluctuation in cultivated areas, productivity and production. Cotton’s contribution to the export revenue had dropped from about 55% during the seventies to about 22% in early 1990s and to 3% in 2000s. The purpose of this study is to evaluate the profitability and competitiveness of cotton production in the Gezira scheme which contributed about 65% of cotton production of Sudan. The study depended on secondary data of six seasons (2002-2007) for the two main varieties of cotton, Barakat and Acala. To asses the competitiveness of cotton and quantifying its private and economic profitability, and the incidence of taxation and subsidies policy, a Policy Analysis Matrix (PAM) as a quantitative accounting tool was used for financial and economical analysis of cotton production. The results showed that, the Gezira scheme had a competitive advantage in cotton production, and the resources were used efficiently and the production and exports of the two varieties of cotton are profitable. The results indicated that the two varieties of cotton had a competitive advantage in both absolute and relative terms, but Barakat variety had a higher private profitability than Acala variety. The study recommended that the government should provide more incentives to producers through sound price policy to encourage efficient production, and adopt new technology in production, packaging, and ginning.