Cotontchad SN (CTSN) is private company jointly owned by Olam and Chad government that was incorporated in 1971.CTSN operates as an agribusiness company working with smallholder farmers in southern region of Chad. CTSN’s principal activities is the aggregation and export of cotton lint produced from ginning seed cotton sourced from farmers. CTSN is the only company to operate cotton gins in Chad.
CTSN is a vertically integrated business that is involved in the cotton value chain from crop production to processing and marketing. Its business model involves supporting members to grow cotton with an expectation that the members deliver the seed cotton to CTSN for ginning and marketing.
The poor condition of cotton farmers in Chad and hitherto lack of effective service delivery has constrained them to low seed cotton yields (600Kg/ha vs 1200 kg/ha in neighboring countries). Moreover, adverse weather patterns and complete reliance on manual labor (often only from farmer household) severely limits farmers’ capacity to cultivate their land.
CTSN cotton farmers are provided with inputs and farm services (extension services, certified seeds, fertilizers, crop protection and transport) on credit to support activities necessary during the entire crop season. The company currently works with 210,000 SHF and eventually want to support 270,000 SHFs to grow primarily of high-quality cotton plus supporting of growing of food crops by rotation (maize and peanuts).
The company intends to improve profitability in cotton cultivation and competitive compared to other options for farmers by running an effective service delivery mechanism and simultaneously support farmers grow food crops both for food security and income diversification of farmers. To effectively increase the seed cotton yield and thereby the livelihood of smallholders it sources from, to sustainably secure and scale its seed cotton supply, CTSN must address farmers difficulty in land preparation and augment service delivery to farmers.
This study demonstrates that CTSN can meet their stated objective by:
- Having greater impact at farm level will increase yields and sustain cotton supply, by helping farmers maintain/increase hectarage of seed cotton in the long-term:
- Provision of right inputs and extension service package is critical to increasing seed cotton yield.
- Implementing mechanization service (particularly for land preparation) will address key bottleneck for farmers meeting intended hectarage of cotton crop.
- CTSN’s support to farmers in growing food crops can increase farmer household income, better food security and diversify farm income.
- Building capacity of co-operatives will augment reach and effectiveness of CTSN’s and cooperatives service delivery:
- Rewards results driven cooperatives by helping expand and grow their income.
- Village cooperative agent (AVA) model will increase the service delivery capacity of cooperatives.
- Leverage technology solutions to deepen engagement with cooperatives and farmers.
- Strengthening of CTSN’s operational capacity for operating at scale with improved efficiency will make the service delivery model sustainable in the long run:
- CTSN is positioned to secure adequate working capital required for intensive inputs provision and payments for bigger seed cotton volume.
- Investing to expand gin capacity will result in efficient ginning operations and decreases ginning cost per unit of seed cotton.
- Optimize the mix of own and hired trucks for seed cotton transport for cost efficiency and operational flexibility.
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