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32. VCA4D Ethiopia Cotton 2020.Pdf 11.81 MB i Value Chain Analysis for Development (VCA4D) is a tool funded by the European Commission / DEVCO and is implemented in partnership with Agrinatura. Agrinatura (http://agrinatura-eu.eu) is the European Alliance of Universities and Research Centers involved in agricultural research and capacity building for development. The information and knowledge produced through the value chain studies are intended to support the Delegations of the European Union and their partners in improving policy dialogue, investing in value chains and better understanding the changes linked to their actions. VCA4D uses a systematic methodological framework for analysing value chains in agriculture, livestock, fishery, aquaculture and agroforestry. More information including reports and communication material can be found at: https://europa.eu/capacity4dev/value-chain-analysis-for-development-vca4d- Team Composition Gian L. Nicolay| Social expert and team leader (FiBL) Gérald Estur | Economist (independent) Conor Walsh| Environmental expert (NRI) Paulos Desalegn| National expert (independent) The report was produced through the financial support of the European Union. Its content is the sole responsibility of its authors and does not necessarily reflect the views of the European Union. The report has been realised within a project financed by the European Union (VCA4D CTR 2016/375-804). Citation of this report: Nicolay, G; Estur, G; Walsh, C; Desalegn, P, 2020. Cotton Value Chain Analysis in Ethiopia. Report for the European Union, DG-DEVCO. Value Chain Analysis for Development Project (VCA4D CTR 2016/375-804), 128 p + annexes. 1 Table of Contents TABLE OF TABLES ............................................................................................................................................ 4 TABLE OF FIGURES ........................................................................................................................................... 5 ACKNOWLEDGMENTS ...................................................................................................................................... 6 ABBREVIATIONS AND ACRONYMS .................................................................................................................... 7 EXECUTIVE SUMMARY .................................................................................................................................... 10 1. INTRODUCTION AND CONTEXT .............................................................................................................. 24 1.1 INTRODUCTION TO THE PROJECT ......................................................................................................................... 24 1.2 CONTEXT OF THIS VC ANALYSIS ......................................................................................................................... 24 1.3 VCA4D METHODOLOGY ...................................................................................................................................25 1.4 SCOPE OF THE ANALYSIS .................................................................................................................................... 27 1.5 NOTES TO THE DATA COLLECTION ....................................................................................................................... 27 2. FUNCTIONAL ANALYSIS ......................................................................................................................... 28 2.1 CONTEXT OF THE SECTOR .................................................................................................................................. 28 2.2 STRUCTURE AND MAIN PROCESSES ....................................................................................................................... 30 2.2.1 Overview of main arenas of action .............................................................................................................. 30 2.2.2 Production arenas ..................................................................................................................................... 30 2.2.3 Processing arena ....................................................................................................................................... 32 2.2.4 Trading and exporting arena ...................................................................................................................... 32 2.2.5 Input supply arena ..................................................................................................................................... 32 2.3 VC ACTORS, SUPPORT STRUCTURES AND LEVELS ..................................................................................................... 33 2.3.1 The five main processes ............................................................................................................................. 34 2.3.2 Stakeholders and Sub-chains ..................................................................................................................... 35 2.4 METRICS OF THE SUB-CHAINS ..............................................................................................................................36 2.5 TYPOLOGY OF PRODUCERS AND MAIN FLOWS ......................................................................................................... 39 2.6 GEOGRAPHY OF THE VC ..................................................................................................................................... 43 2.6.1 Cotton production .....................................................................................................................................44 2.6.2 Ginning and textile ....................................................................................................................................45 2.6.3 Cottonseed: oil and cake ............................................................................................................................46 2.7 IMPORT/EXPORT OR THE ROLE OF GLOBALISED MARKETS ON THE VC .......................................................................... 46 2.7.1 Import flows ..............................................................................................................................................46 2.7.2 Export flows .............................................................................................................................................. 47 2.8 GOVERNANCE AND KEY DRIVERS .......................................................................................................................... 47 2.8.1 Policy and regulation arena ........................................................................................................................ 47 2.8.2 Ideas generation ........................................................................................................................................49 2.8.3 The central state ....................................................................................................................................... 51 2.8.4 Key drivers and networks addressing the challenges .................................................................................... 53 2.8.5 The perceived role of development partners ................................................................................................ 54 2.9 STRATEGIC IMPORTANCE OF THE SECTOR/VC IN THE CONTEXT OF SUSTAINABILITY ..........................................................56 2.9.1 Cotton certification within more conventional figurations ............................................................................ 57 2.9.2 Organic and Fairtrade standards ................................................................................................................ 57 2.9.3 Difficulties of sustainable cotton and textile in Ethiopia ............................................................................... 57 3. ECONOMIC ANALYSIS ............................................................................................................................ 58 3.1 INTRODUCTION AND METHODOLOGY ....................................................................................................................58 3.2 FINANCIAL ANALYSIS .........................................................................................................................................58 3.3 EFFECTS WITHIN THE NATIONAL ECONOMY ........................................................................................................... 60 3.4 SUSTAINABILITY AND VIABILITY WITHIN THE GLOBAL ECONOMY .................................................................................65 3.5 GROWTH INCLUSIVENESS ................................................................................................................................... 67 3.6 MAIN FINDINGS AND RECOMMENDATIONS OF THE ECONOMIC ANALYSIS..................................................................... 69 4. SOCIAL ANALYSIS .................................................................................................................................. 72 4.1 INTRODUCTION AND METHODOLOGY..................................................................................................................... 72 4.2 HISTORICAL, INSTITUTIONAL AND SOCIAL STRUCTURE OF THE VC ................................................................................ 74 4.3 SOCIAL PROFILE ...............................................................................................................................................
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