Input Credit Provision for Cotton Production: Learning from African Neighbors and Meeting Zambia’s Challenges

1. Smallholder farmers in Africa require reliable access to purchased production inputs and credit to take advantage of export opportunities from production of cotton. 2. Unregulated and poorly coordinated markets for cotton, production inputs and credit have too often failed to deliver sustainable production finance to farmers for cotton production resulting in a variety of different approaches to these problems among African countries. 3. Among the countries studied, approaches have varied from State monopolies to private markets with several large firms managing to achieve temporary duopolies. 4. Zambia has been relatively successful in dealing with the input-credit needs of cotton farmers for periods of time but the system has been unsustainable, breaking down from time to time. 5. Currently the Zambia government and private sector participants are proposing highly collaborative regulation of the sector driven by all stakeholders. The revised Cotton Act provides a framework under which this may be able to happen in Zambia and recent activities of ZACOP, in collaboration with CAZ are very much in this spirit.