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COMMON FUND FOR COMMODITIES
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Pilot Project on Price-Risk Management for Cotton Farmers (CFC/ICAC/17FA)

 

The overall objective of the project is to reduce the exposure of smallholder cotton farmers to short-term fluctuations in world market prices, thus better securing more predictable incomes from cotton-growing. The practical aim of the project is to test the feasibility of the use of various price-risk management instruments by groups of farmers in developing cotton-producing countries, whereby a key feature is that the instruments are market-based and function without subsidy. An initial survey was conducted in Tanzania, Uganda and Zimbabwe to determine which countries are best suited to participate in the project. The project has been designed to have three main components, the first of which consists of an inventory of existing market-based price-risk instruments and an assessment of their potential adaptability to the conditions prevalent in the three target countries. The second component relates to the implementation of the pilot scheme at one or several locations for at least two years, making adjustments and refinements to the instruments (or organisational and institutional arrangements) as required. The third component consists of the dissemination of project results at the regional level.