institutionnal & functional analysis review of iam · 2013. 9. 18. · institutionnal & functional...

FOOD SECURITY PROGRAM

EUROPEAN COMMISSION

INSTITUTIONNAL & FUNCTIONAL ANALYSIS REVIEW OF IAM

Final report

Patrick Lemaître Consultant 10, rue Weber – 75116 PARIS February 2003 Email : [email protected]

INSTITUTIONNAL & FUNCTIONAL ANALYSIS REVIEW OF IAM – Final report February 2003

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TABLE OF CONTENT

1. Historical background and the re-launch of the cotton production ................................................................. 9 2. Analysis of the recent cotton production & WORLD COTTON PRICES ................................................... 11

2.1. Cotton production in Mozambique........................................................................................................ 11 2.2. World cotton prices ............................................................................................................................... 13

3. The “Instituto do Algodão de Moçambique” (IAM) and its strategy ............................................................ 14 3.1. IAm statuts ............................................................................................................................................ 14 3.2. Statuts of the employee, ........................................................................................................................ 15 3.3. Strategy ................................................................................................................................................. 15

3.3.1. “Estrategia para o Desenvolvimento do Algodão” of 1998 ........................................................... 15 3.3.2. Results of the Assessment of the sub-sector in 2001 ..................................................................... 16

4. budget and ressources ................................................................................................................................... 20 4.1. Budget of the State (Orçamento Geral do Estado – OGE) .................................................................... 20 4.2. Budget of IAM. ..................................................................................................................................... 20

5. Assessment of the current organization......................................................................................................... 23 5.1. Head quarter of Maputo ........................................................................................................................ 24

5.1.1. Current organisation ...................................................................................................................... 24 5.1.2. Organisation objective................................................................................................................... 25 5.1.3. Laboratory ..................................................................................................................................... 25

5.2. Delegação regional de Nampula - nampula........................................................................................... 25 5.2.1. Area of intervention ...................................................................................................................... 25 5.2.2. Organisation of the “Delegação” de Nampula .............................................................................. 26 5.2.3. Projected organisation ................................................................................................................... 27

5.3. Delegação PROVINCIAL de CABO DELGADO - pemba .................................................................. 27 5.3.1. Area of intervention ...................................................................................................................... 27 5.3.2. Organisation of the “Delegação” of Montepuez............................................................................ 27 5.3.3. Projected organisation ................................................................................................................... 28

5.4. delegaçao PROVINCIALe DE Inhambane and GAZA - MAXIXE ..................................................... 28 5.4.1. Current situation ............................................................................................................................ 28 5.4.2. Conclusion .................................................................................................................................... 29

5.5. Delegação PROVINCIAL de SOFALA - Beira .................................................................................... 29 5.5.1. Area of intervention ...................................................................................................................... 29 5.5.2. Organisation of the Delegation of Sofala ...................................................................................... 30 5.5.3. Projected organisation ................................................................................................................... 30

5.6. Delegação of Zambezia - Quelimane .................................................................................................... 30 5.7. SUMMARIZE OF THE DELEGATIONS Assessment ........................................................................ 31

6. Conclusions - means and costs - new resources ............................................................................................ 32 6.1. New organization .................................................................................................................................. 32

6.1.1. Headquarter level: ......................................................................................................................... 32 6.1.2. Delegation level: ........................................................................................................................... 33

6.2. MEans and Costs ................................................................................................................................... 34 6.2.1. Means ............................................................................................................................................ 34 6.2.2. Costs .............................................................................................................................................. 36

6.3. New ressources...................................................................................................................................... 38 7. Plan of action and schedule ........................................................................................................................... 39

ANNEXES

ANNEX 1: Estatutos e Regulamento Interno ANNEX 2: Estrategia para o Desenvolvimento do Algodão ANNEX 3: IAM Budget 2003 and realisations 2001. ANNEX 4: Organizational charts. ANNEX 5: Means and costs breackdown ANNEX 6: Map of the favourable areas for cotton growing. ANNEX 7: Projecto de Inhassume ANNEX 8: CV of the Consultant and TOR of the study ANNEX 9: List of the people met and documents consulted.


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EXECUTIVE SUMMARY

1 This institutional review of IAM happens during the general institutional review of MADER and the public sector in general, that is why this report will bring specific additional data from IAM to advance the work undergoing in general.

OBJECTIVES OF THE STUDY

2 The objective of the study is to provide an informed analysis of the “Instituto do Algodão de Moçambique” (IAM), including its current effectiveness, in terms of defining critical strategies, operational capacity for promoting cotton production, marketing and processing development, as a facilitating institution within the cotton sector (see annex 8).

3 This study should cover all institutional aspects of IAM, including its administrative and financial management as appropriate and relevant to its organisational setting. Thus, the study undertake a full diagnostic of IAM, which will allow the formulation of an institutional reform plan.

PROGRAM OF THE MISSION

4 After several meetings in MAPUTO with the Executive management of IAM the delegations of Nampula (Nampula), Sofala (Beira), Cabo-Delgado (Montepuez), Inhambane (Maxixe) were visited and assessed in term of human resources and means of work according to cotton production in each province.

COTTON PRODUCTION IN MOZAMBIQUE

5 Since the last 6 campaigns the production fluctuated between 117.000 and 35.000 tons. The production by Province is the following (it is noted that in 2001/2002 Sofala produced more than 12.500 Tons as against 7.230 in 2000/2001).

Production of Seedcotton by provinces (in M Tons)

Provinces 95/96 96/97 97/98 98/99 99/00 00/011

C. DELGADO 12 697 22 466 26 787 35 417 4 663 15 642NAMPULA 24 253 38 073 46 985 57 722 20 300 41 461NIASSA 3 321 4 010 4 001 7 153 1 219 2 204ZAMBEZIA 359 747 1 994 4 251 1 215 3 292TETE 0 84 480 1 032 507 900SOFALA 5 351 5 250 5 443 6 977 7 185 7 229MANICA 579 514 549 544 175 212INHAMBANE 1 107 704 1 068 174 95 108GAZA 2 840 2 149 3 771 3 427 6 0MAPUTO 0 3 10 19 0 0

TOTAL 50 507 74 000 91 088 116 716 35 365 71 048

6 Currently there are 8 active operators running 10 ginnery plants totalling a capacity of 130.000 tons of seed cotton.

1 The campaign 2001/2002 is not yet completed, but the estimated production is around 70.000 tons.


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7 Currently, since the textile industry collapse, the whole production is exported. Compared to the world level, the Mozambican production is very little: 11.000 T of lint in 99/00 compared to 19 Millions of tons for the world production.

WORLD COTTON PRICES

8 Since 1995 there was a strong trend of low price: the world price of cotton has plunged to its historical low in October 2001. Since the cotton prices are raising slowly (see graph downward). To day the prices are around 59 US cents/lb (Cotlook Indice A -21/02/03).

9 The ICAC2 forecasts an Index A at 55 US cents/lb for the campaign 2002/2003 and 57 cents for 2003/2004.

THE IAM STATUTS

10 Due to its status, IAM enjoy an administrative and financial autonomy; which allows it to get its own resources and have flexibility in the management. Nevertheless IAM should cover at least 2/3 of its annual budget with its own resources as per the law regulating the Government institutions with administrative and financial autonomy.

11 There are staffs that are civil servants and others are contracted directly by IAM.

12 This fact gives to IAM flexibility when adjusting the budget to its own resources, but IAM, structurally is under the MADER (strategy and policy) and functionally it is autonomous.

2 International Cotton Advisory Committee.

COTTON INDEX INDEX A EVOLUTION- 1986/2002

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THE STRATEGY OF IAM

13 The strategy of IAM had been worked out from two documents: “Estrategia para o Desenvolvimento do Algodão” (1998), and the Assessment of the Cotton Sub-Sector in Mozambique, study, carried out in 2001 (see annex 2).

• “Estrategia para o Desenvolvimento do Algodão”: the objectives are to increase the cotton production through a threefold action plan:

o Production: improvement of the yield and ginning outturn, integration of the food-crops in the cotton growing system.

o Marketing: policy price system evolving toward a liberalized system, to secure the seedcotton markets, to encourage the dialogue between the operators involved in the sub-sector.

o Processing: promotion of new ginning factories and rehabilitation of the existing ginning factories.

• The Assessment of the sub-sector pointed out that while IAM was mainly implied in Cotton lint classification and collection of data, strategic areas that were not covered included:

o Seed policy (Feasibilty study implemented)

o Monitoring the concessionaires (term of references done)

o Monitoring the development of associations (Feasibilty study implemented).

o Improving the Image of the Mozambican Cotton (Feasibilty study implemented).

o There was a problem in the reliability of the data collected from the sub-sector and there was room for improvement (Feasibilty study implemented).

14 The target of the new strategy is to develop the cotton production by implementing these additional tasks while keeping its autonomy toward the Government. IAM does not envisage to enter PROAGRI.

THE CURRENT SITUATION

15 There are one headquarter in Maputo and 4 delegations. Currently IAM is mainly involved in the lint classification and the collection of data from the sub-sector: The delegations of Nampula, Sofala, Cabo-Delgado are classifying the lint whereas the delegation of Inhabame do not. In addition. The main characteristics of the delegation are the following:

Delegations-> Nampula /Niassa

Cabo-Delgado

Sofala /Manica

Inhambane /Gaza

Zambezia

Location Nampula Montepuez Beira Maxixe Quelimane

Delegate Yes Yes (not civil servant)

Yes Yes No

Number of Staffs

19 6 6 8 1


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Cabo-Delgado

Sofala /Manica

Inhambane /Gaza

Zambezia

Classifying room

Yes Yes Yes No No

Production of Seed Cotton (T) 2001/2002

49.000 12.000 12.500 17 2.500

Ginning plant in operation

7 1 1 0 1

Working conditions

Poor Poor Very Poor Very Poor DPADR

16 The headquarters have 32 people and a laboratory, which is not currently in operation. The working conditions are not optimum.

17 The mission visited most of the delegation and the report is the same in each delegation:: there are lacks of means (lint classification equipment, cars, motorbikes and computers) and human resources at the upper and medium level. The province of Inhambane that currently does not produce any more cotton has a small- scale project (3 years) to re-launch the cotton production to attract a new operator (see annex 7).

18 Due to low cotton prices in 2001 and 2002, a stagnant production, the IAM own resources are currently inadequate to assure a normal functioning.

CONCLUSIONS

19 To comply with its strategy,

• Positions should be created by hiring medium and high level “tecincos”,

• Equipments will be renewed and extended.

• 3 Studies should be implemented (terms of references are existing yet)

• 4 projects implemented (the feasibility studies have been done in the framework of the cotton study phase 2)

20 The costs mentioned hereafter are not those necessary to realize the 4 projects; which have their own costs, but the necessary means to restore the basic capability of IAM to re-launch and to develop its activities and projects in the cotton sub-sector.

21 The costs of this program will be financed by IAM partially, Funders (PROAGRI, EU, AFD and others) and additional resources coming from licences granted to the concessionaires.

Conta de exploração previsado – Hipotese media

1USD = 23300MTS Em US $

RUBRICAS 2003 2004 2005 2006 2007

DESPESAS CORRENTES DO IAM Despesas com o pessoal actual 273 948 273 948 273 948 273 948 273 948


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1USD = 23300MTS Em US $

RUBRICAS 2003 2004 2005 2006 2007

Despesas com o pessoal adicional 0 42 000 84 000 84 000 84 000 Bens e serviços actual 218 240 218 240 218 240 218 240 218 240 Bens e serviços adicional 0 31 400 62 800 62 800 62 800 Investimentos Sede 191 300 191 300 50 000 50 000 50 000 Investimentos Delegação 210 750 210 750 50 000 50 000 50 000 RELAUNCHING COTTON IN INHANBAME & GAZA PROVINCES Funcionamento 57 685 121 781 170 227 56 742 0 Investimento 52 800 23 650 2 200 0 0 ESTUDOS A FAZER Precio de compra no algodão caroço 8 545 Classificação na fibra 80 475 Sistema das concessãos 68 000

Inprevistos 5% 54 063 59 677 45 571 39 787 36 949

TOTAL GERAL DESPESEAS 1 135 332 1 253 222 956 987 835 518 775 938

Produção algodão caroço (T) 70 000 85 000 95 000 100 000 100 000 Tasa de descaroçamento 34% 38% 40% 40% 40% Fibra Toneladas 23 800 32 300 38 000 40 000 40 000 Preço de la Fibra CAF (US cents/lb) 55 57 60 60 60 Diferencial de qualidad cts/lb 4 4 3 2 2 Preço FOB (US cents/lb) 41 43 47 48 48 Levy em % do precio FOB 2,5% 2,5% 2,5% 2,0% 2,0%

RECURSOS Taxa de transacção (levy) 536 690 763 895 982 300 844 800 844 800 Fundos do EO 90 558 90 558 90 558 90 558 90 558 Classificação 1 818 2 207 2 467 2 597 2 597 Venda de amostras 6 940 8 427 9 418 9 914 9 914 Outsourcing Fundos (EU) 111 000 47 000 42 000 0 0 Outros fundos 388 326 341 135 0 0 0 TOTAL RECURSOS 1 135 332 1 253 222 1 126 743 947 869 947 869

SALDO 0 0 169 757 112 351 171 930

22 3 scenarios were worked out: low, medium and high. The assumptions and result according each scenario are the following:

Assumptions and need of financing.

2003 2004 2005 2006 2007

Produço Algodão caroço (toneladas) Hipotese media 70 000 85 000 95 000 100 000 100 000 Hipotese baixa 70 000 70 000 70 000 70 000 70 000 Hipotese alta 75 000 85 000 100 000 110 000 120 000

Levy em % do precio FOB Hipotese media 2,5% 2,5% 2,5% 2,5% 2,5% Hipotese baixa 2,5% 2,5% 2,5% 2,0% 2,0% Hipotese alta 2,5% 2,5% 2,5% 2,0% 2,0%

Preço de la Fibra CAF (US cents/lb) Hipotese media – cf ICAC 55 57 60 60 60 Hipotese baixa –10% 55 51 54 54 54


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2003 2004 2005 2006 2007 Hipotese alta + 10% 55 63 66 66 66

Tasa de descaroçamento Hipotese media 34% 38% 40% 40% 40% Hipotese baixa 34% 34% 34% 34% 34% Hipotese alta 34% 38% 40% 40% 40%

Diferencial de qualidad cts/lb Hipotese media 4 4 3 2 2 Hipotese baixa 4 4 4 4 4 Hipotese alta 4 4 3 2 2

Financiamento externo TOTAL Hipotese media 388 326 341 135 - - - 729 461 Hipotese baixa 388 326 622 576 292 071 212 602 153 023 1 668 599 Hipotese alta 349 366 234 545 - - - 583 911

23 According the results worked out upward (medium and high assumptions), IAM need external financing (other than those from the outsourcing program) during 2 years.

24 The additional costs for the 4 projects are the following in US $):

Year of the Project 1 2 3 4 TOTAL

Development of Associative sector 427 833 333 135 326 633 302 783 1 450 485Seed policy 6 272 30 686 499 436 499 436 1 035 828Cotton Image 69 858 58 168 64 988 61 468 254 482IAM Information system 102 904 77 958 74 013 74 013 317 698

TOTAL 606 867 499 947 965 069 937 700 3 058 493

25 Plan of action and schedule

PLAN OF ACTION & SCHEDULE

Year of the Project 2003 2004 2005 2006 2007

New organigram & budgetsSelecting & Hiring new staffs

Financing search with Funders StudiesAssociation ProjectSeed policyCotton ImageInformation system

Implementing Studies- Concessionnaire- Classifying the lint- Cottonseed pricing

Implementation Projects- Associations Project- Seed policy- Cotton Image- Informations system


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1. HISTORICAL BACKGROUND AND THE RE-LAUNCH OF THE COTTON PRODUCTION

26 The cotton production in Mozambique has a long history background and has been experienced in most of the provinces of the country, which the feature of "forced crop" has helped.

27 Cotton in Mozambique was insignificant until the 1920s. It was after the Portuguese Government got inspiration from the Belgian experience of "zoning system" ensuring an exclusive right in purchasing the seedcotton that the production grew up, assisted along by the implementation of a law that literally forced the farmers in growing cotton.

28 There were many institutional adjustments during the period up to independence. Mozambique has tested various schemes in allocating exclusive zones to the cotton operators. One of these was the auction system by which cotton companies had to submit yearly offers in the competition in getting an exclusive zone. There was a combination of a regulation spirit along with the desire of having the private operators competing.

29 The historical high of the cotton production was achieved shortly before Independence, when the production of 144.200 tons was obtained in 1973. After Independence, the new government recognized the strategic importance of cotton in supplying foreign exchange, it tried to revert the downsizing trend of the production and took over the facilities left behind by the cotton companies. The new strategy consisted in setting up large state farms and communal villages, but for many reasons, this strategy failed at the point that the production plunged to 5.200 tons in 1985.

30 By the end of the 1980s, in an attempt to reverse the crisis in the cotton sector, the government decided to open up the cotton sector to private operators. Several JVCs companies where then formed between private investors and the State (Lomaco, Sodan, Samo). The private investors brought fresh investment funds and rehabilitated the existing ginning mills and some rural infrastructures.

31 The picture of the cotton sub-sector has evolve during one decade, the first JVCs are still in operation, while there was some turn over with the other cotton companies. In 2002, the geographic distribution of the cotton companies is represented in the attached map.


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MAPA DOS CONCESSIONARIOS ACTIVOS

(Campanha 2001/2002)

NB: The company PLEXUS (formerly LOMACO) is not yet operational because the privatization of LOMACO is not yet concluded, but the ginning plant is operated by Plexus.

MOCOTEX

PLEXUS

SAN

SODAN

MOCOTEX

AGRIMO

CNA

IBRAMUGI

CANAN

SANAM


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2. ANALYSIS OF THE RECENT COTTON PRODUCTION & WORLD COTTON PRICES

2.1. COTTON PRODUCTION IN MOZAMBIQUE

32 Short after the Mozambican economy has come back to a more normal track, the cotton production has dramatically increased. This increase has been a steady one till the 1998/99 campaign (more than 116 000 T of seed cotton or a bit more than 35 000 tons of cotton lint) before it experienced again, till today, serious signs of a new fall down.

Graphic 1. Evolution of the seed cotton production in Mozambique in the 1990s

33 While the seed cotton production seemed to be in a position to become close to the historical high of 1972/1973 with more than 144 000 tons), the sharp decline being observed recently, although with great variation, introduces doubt upon the cotton future in the country. The production dropped to 35 000 tons of seedcotton in 1999/2000, and the estimation of a 75 000 tons for the finishing campaign (2000/2001) is reasonable. The reasons for the production drop pertained to climatic, technical and economical factors (cotton prices).

34 The production is unequally distributed between the three zones, with a prevailing part of the northern zone, which is considered to be the highest potential one. The southern zone is disappearing from the picture, in absolute or relative terms; its cotton production is becoming very marginal.

35 Within the northern zone, the province of Nampula remains the leading cotton producing province with a national production share of over 50% during the last five years. During

Seedcotton Production in Tons

0

20

40

60

80

100

120

140

91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02

Campaigns

Ton

s


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this time, Cabo Delgado, through a more limited producing area, has proved to be able to challenge seriously, reaching a production share of over 30% Within the northern zone before falling at less than 15% in 1999/2000.

36 In the central zone, the province of Sofala, one of the 2 provinces of intervention of the CNA, has gained in the campaign 2001/2002 a dramatic increase of its production share (+73% compared to 1999/2000). The other 7 provinces account for less than 10% of the production share. It is noted that the south of the country (Maputo, Gaza and Inhambane provinces) does not have a significant production (less than 1%) and according a FAO study made in 1982 these areas are in a marginally to moderately favorable zones for cotton growing (see map Annex 6).

Table 1. Provinces shares in seed cotton production (in Metric tons and %)

Provincias 95/96 96/97 97/98 98/99 99/00 00/01 C. DELGADO 12 697 22 466 26 787 35 417 4 663 15 642 NAMPULA 24 253 38 073 46 985 57 722 20 300 41 461 NIASSA 3 321 4 010 4 001 7 153 1 219 2 204 ZAMBEZIA 359 747 1 994 4 251 1 215 3 292 TETE 0 84 480 1 032 507 900 SOFALA 5 351 5 250 5 443 6 977 7 185 7 229 MANICA 579 514 549 544 175 212 INHAMBANE 1 107 704 1 068 174 95 108 GAZA 2 840 2 149 3 771 3 427 6 0 MAPUTO 0 3 10 19 0 0

TOTAL 50 507 74 000 91 088 116 716 35 365 71 048

Provincias 95/96 96/97 97/98 98/99 99/00 00/01

C. DELGADO 25% 30% 29% 30% 13% 21%

NAMPULA 48% 51% 52% 49% 57% 59%

NIASSA 7% 5% 4% 6% 3% 3%

ZAMBEZIA 1% 1% 2% 4% 3% 5%

TETE 0% 0% 1% 1% 1% 1%

SOFALA 11% 7% 6% 6% 20% 10%

MANICA 1% 1% 1% 0% 0% 0%

INHAMBANE 2% 1% 1% 0% 0% 0%

GAZA 6% 3% 4% 3% 0% 0%

MAPUTO 0% 0% 0% 0% 0% 0%

TOTAL 100% 100% 100% 100% 100% 100%

37 Compared with the world cotton production and exportation the weight of the Mozambican cotton is very low (cf table 3), but at the country level it represent an important share of the agricultural exportations (cf table 2):

Table 2. Export crops production in (000) Tons (source: Ministario do Plano e Finanças)

95/96 96/97 97/98 98/99 Cashew nuts 66,5 43,3 51,7 58,7 Seedcotton 50,5 74,0 91,0 106,7 Sugarcane 315,9 278,9 368,7 469,5 Copra 22,3 35,6 36,0 44,4 Tea 1,7 1,7 1,5 1,5 Citrus 8,0 10,2 10,2 10,2


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Table 3. World cotton production and exportation

2.2. WORLD COTTON PRICES

38 Since 1995 there was a strong trend of low price: the world price of cotton has plunged to its historical low in October 2001. Since the cotton prices are raising slowly (see graph downward).

39 The fact is that cotton prices, like other commodities, have entered a worrisome decreasing trend. After reaching the historical high level in May 1995 the A index, common reference of the world price, has been engaged into a steady decline since 1997 in conjunction with the Asian financial crisis.

Graphic 2. Cotton prices from 1986 to 2002

40 These cotton price fluctuations and negative trend since 1995 have a very negative effect on the IAM resources, which are based on the cotton FOB prices.

41 It is well kwon that the cotton market is distorted by national cotton policies. The negative trend of the world market price is fed by the implementation of national supporting cotton policies in major producing countries. Although the number of countries maintaining their support to cotton production has decreased significantly, the impact on the production

Lint Production Lint Export. Export. Share1000 Tons 1000 Tons %

1990/91 19 004 5 081 26,7%1991/92 20 712 6 092 29,4%1992/93 17 939 5 525 30,8%1993/94 16 863 5 911 35,1%1994/95 18 781 6 309 33,6%1995/96 20 357 5 998 29,5%1996/97 19 613 6 045 30,8%1997/98 20 044 5 969 29,8%1998/99 18 707 5 457 29,2%1999/00 18 869 6 136 32,5%

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volume is still very high: it is estimated that more than 50% of the world production is obtained thanks to subsidy. In the 1998/99 campaign, China has spent billion US$ 2.7 and the European Union million € 770 to sustain directly the production by modalities which are very variable between countries. In 1999/2000, the USA provided a total amount of Billion US $ 2,34 to sustain the income of its cotton farmers through “the farmer bill”3.

42 For the next 2 campaigns, the ICAC4 forecasts an Index A at 55 US cents/lb for the campaign 2002/2003 and 57 cents for 2003/2004.

3. THE “INSTITUTO DO ALGODÃO DE MOÇAMBIQUE” (IAM) AND ITS STRATEGY

3.1. IAM STATUTS

43 The IAM was established in 1991 (decreto n°7/91 de 23 de Abril 1991). It is an incorporate body endowed with a financial and administrative autonomy. The IAM is subordinate to the Ministry of Agriculture. The Diploma Ministerial n° 76/2001 had clarify its role and organization (see Annex 1).

44 Its main objects are :

• To develop, direct, control the activities in relation with the production, processing, marketing and exportation of cotton.

• To co-operate with the research institute involved in cotton research

• To watch the observance of the technical standards of cotton cultivation.

• Co-ordinate the development of the cotton in term of production, marketing and quality

• Co-operate and Coordinate with others Institutions on research issues including breeding of new variety of cotton.

• Classify the quality of the cotton lint

• Collect data and figures in relation with the cotton production

• Propose a seed cotton purchase price

• Elaborate and disseminate the marketing standards for the seed cotton and cotton lint

• Promote the establishment of farmers organizations

• IAM is the last option to redevelop cotton (production and purchasing) in areas abandoned by private promoters.

45 The IAM established a “Conselho Geral” Constituted with the General Manager of IAM and other members that represent the Ministry of Agriculture and representatives from the ginning companies.

46 Its resources come from a levy charged on the exported lint. It is said that the levy and other own resources should cover at least 2/3 of its annual budget as per the low regulating of the Government institutions with administrative and financial autonomy.

3 Cf Cotton Sub-Sector Assessment – October 2001 4 International Cotton Advisory Committee.


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47 To carry out its objectives the IAM have a central and local organization. Central in Maputo and local in the production area. The diploma ministerial 76/2001 organize and fix the attribution of each of the main departments:

• Support to Associative sector (not yet in operation)

• Lint Classification and fiber analyses

• Studies and Project

• Finance and administration

• Delegation in the Provinces: Cabo Delgado, Inhambane, Manica (not existing), Nampula, Niassa & Cuamba (not existing), Sofala, Tete (not existing), and Zambezia. The delegate is appointed by the MADER upon the proposal of IAM.

3.2. STATUTS OF THE EMPLOYEE,

48 There are 2 categories of employee at IAM: the staffs who have been contracted directly by IAM and the civil servants (pessoal do quadro).

49 The current number of staff is 81:

• Existing and active staff at IAM: 72

• Seconded staff in other structures: 6

• Staffs in long term training session: 3

50 A document entitled « Concepção e preparaçãos de um programa de reformas Antecipadas e de Recissção Voluntaria » of November 2002, has estimated the number of the IAM staff at 87 in 2002 (pessoal do cuadro: 70).

51 The employee contracted are paid by the IAM budget, the civil servant are paid directly by the Government.

52 Due to its administrative and financial autonomy IAM may hire and dismiss staffs and fix the salaries with much more flexibility than state institutions.

3.3. STRATEGY

53 The strategy of IAM has been formulated in 1998 through a paper approved by the cabinet of the Government and by a study implemented in 2001 for the assessment of the cotton sub-sector.

3.3.1. “Estrategia para o Desenvolvimento do Algodão” of 1998

54 The objectives are to increase the cotton production. By the revival of the production, marketing and process of the cotton :

• Production: improvement of the yield and ginning outturn by using new selected varieties, use of adapted insecticides, of the agricultural standard, integration of the food-crops in the cotton growing system.

• Marketing : policy price system evolving toward a liberalized system, to secure the seedcotton markets, to encourage the dialogue between the operators involved in the sub-sector.


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• Processing : promotion of new ginning factories and rehabilitation of the existing ginning factories.

55 This strategy will imply all the operators of the sub-sector: the Government, IAM, farmers and the operating companies.

56 Some of the targets have been already reached, but the use of new varieties of cotton and others are ongoing or have not been started yet.

3.3.2. Results of the Assessment of the sub-sector in 2001

57 The study of the sub-sector pointed out that IAM was mainly implied in Cotton lint classification and collection of data, some strategic areas were put aside by lack of means: seed policy, controlling the concessionaires, following-up of the association process and collecting reliable data from the sub-sector.

(a) Seed policy

58 The 2001 diagnosis study pointed out that there is no national seed policy in Mozambique. But most stakeholders appeal for the implementation of such a policy. There was a try in 1999 to address the issue of seed policy, from a document issued by IAM, but such an initiative was eventually stuck.

59 So far, seed production is a business that each cotton company is addressing individually, following more or less rigorous scheme. Lomaco manifested a great attention in producing the seeds for its needs and in ensuring the variety purity, specially by launching a new variety (CA 324) saw its advantages in productivity at the farmers' level, in fiber quality and in ginning outturn confirmed by several years of experiment.

60 CNA, which implemented a seed program financed by AFD the same as LOMACO, has tested a variety STAM 42, which will represent during the 2002/2003 campaign more than 95% of the area planted under cotton. During the campaign 2001/2002 several hundred tons of STAM 42 seed cotton were collected and processed with a ginning outturn over 41%.

61 It is noteworthy that another cotton company, AGRIMO also committed itself with variety change and it informed that it has already 5 years of background in this regard. The variety ISA 205 was first introduced, and CA 324 was also experimented thanks to seeds provided by Lomaco. This company is deciding to totally let down Remu 40 within the next campaign, and it has enough seeds to cover the programmed 10 000 ha in both varieties ISA 205 and CA 324 for which a ginning outturn of 40-42% was achieved.

62 For the other cotton companies, we had less information about the way seed production is actually managed except that they are mainly using an ancient variety, Remu 40, dating back to 1960 decade, and for which they claim not having certainty about its genetic origin.

63 In short, there is no longer a situation of mono-variety and this situation of co-existence of several varieties encompasses a great threat of variety mixture. Co-ordination of seed production and distribution appears to be furthermore crucial nowadays.

64 To be implemented this policy consists in launching a production of seeds at the farmers' level, sustained by an intensification scheme that enables to reach the target of


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3-year of seed turn-over. It is advocated to achieve this policy along with a general variety change by using varieties which have demonstrated better yield, far better ginning outturn and better lint quality (lint length). It is estimated that such an action is very cost effective, in particular for ginners and farmers.

65 It is suggested that IAM ensures the monitoring of the seed policy. This policy will be implemented with INIA and the Concessionaires: INIA should select the variety, the concessionaires should produce the seeds at the farmers' level, IAM should be in particular in charge of supervising the cotton companies in their seed production.

(b) Monitoring the concessionaire

66 The Mozambican cotton system in characterized by a concessionaire system which entrust private companies the rural development of large areas.

67 The origin of the concessions dates back from the colonial time. The colonial State, entrusted the exploitation and the development of extended areas to private companies. Thus they had the monopoly of harvest and purchase of cashew nut and cotton in the producing areas. These concessions were abolished with independence.

68 In the late 80s and early 90s at the end of the civil war, as part of Mozambique Government strategy to improve agricultural performance in the central and northern region of the country, concession zones were established, and a system of legal monopoly rights was developed on areas where the population have undergone the effect of civil war (exodus, destruction of infrastructure, insecurity)

69 The legal monopoly rights was granted to large Joint Venture Companies (formed between government and foreign investment). In exchange for monopoly cotton buying rights in a specific geographic area – concession zones, the JVC agreed to supply participating farmers in their concession areas with input and extension services for cotton and food crops, and to purchase seed cotton from farmers and complying with the official minimum price level. The overall investment by cotton concessionaires (JVC) was expected to reverse the downward trend on cotton production.

70 The concession gives a purchasing monopoly of the seedcotton on the whole of the concession. In the other hand the concessionaire must provide technical advises and inputs to the smallholders.

71 Control of the concessionaires: it was envisaged a regular control of the State on the achievements of the concessionaires. In practice there is no control of the State although this one often holds 49% of the capital of the concessionaire companies.

72 In addition, the assessment of the cotton sub-sector pointed out that the productivity is limited by poor application of basic cultural practices. Yield potential is also seriously limited by the mal-practice of some cultural operations

73 For the observations mentioned above the concessionaires should be monitored and their achievements evaluated according to their concession contract. Indeed the areas granted to the concessionaires are very large and some of them size several tenth thousand of square km. This evaluation will encourage the concessionaire to improve its technical advises and the yield of the farmer would increase.


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(c) Information in the cotton sector

74 The diagnosis study elaborated extensively about the issue of information collection and diffusion within the cotton sector for which IAM is solely involved. IAM is handling 3 types of data collection, dealing with production of seedcotton, lint classification and transaction of cotton lint, and it succeeds in delivering regular reports (quarterly and annual reports) although the provided information appear to be poor in achieving a proper vision of the cotton production (no longer information about the number of cotton producers for example) or an adequate view of the service provision in the various cotton zones.

75 The centralization of lint classification provides data which are useful in assessing the distribution and the evolution of the lint quality, this is what we did from data which were provided to us during the diagnosis phase.

76 Since contracts related to lint transactions must be submitted to control and authorization by IAM (in terms of relevance of the price obtained with reference to the qualities of the lint being sold), the Mozambican cotton sector enjoys the exceptional situation of having data time series that could help assess properly the relationship between prices and quality differentials. A practical consequence would be to update the price grid which is used so far in controlling the transaction contracts.

77 Data collected on production are second hand. IAM provincial delegations obtained them by submitting data forms to cotton companies. Data requested are not always provided while the scope of the data being asked to cotton companies are quite meagre as compared to what these companies used to have for their routine running.

78 There is obviously a matter of organization in data collection with large room for improvement. Such an improvement could derive from a better procedure in communicating the data requested and through a proper re-adjustment of the data forms to comply with the periods of data availability at the cotton companies’ level.

79 The way by which data are processed into information appears to be rather limited. In the diagnosis study, we implemented some processing that demonstrated that better information could be extracted. We felt that IAM is showing interest in getting into deeper exploitation of the data it manages, but this attitude is impeded by a serious lack of means.

80 It is advocated that Mozambique moves from the current situation of statistics management to an organized and shared system of information. Such a process should be very positive in helping monitor the cotton sector and settling down or preventing disputes between stakeholders of the sector.

81 The new information system could run within IAM but it must be monitored by a steering committee, which associates various stakeholders, direct ones (like IAM, AAM) and indirect ones (Funders, INIA and NGOs).

82 A new approach in diffusing information should be considered, following the keywords of regularity, multi-forms, active, and openness. The rationale is to provide the information under various forms, to more people than it is so far considered, to provide it automatically instead of doing it only on request.


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(d) Improving the Mozambican cotton image

83 The diagnosis study of 2001 emphasized on, the fact that the world market of cotton entered into a structural change whose features is still unstable. During the last two decades, fluctuations were more frequent and of greater magnitude than what were observed during more than two centuries of international cotton trade. A direct consequence is an erratic trend of the international price. Within a period of 5 years, the international price has reached historical high and historical low.

84 The price trend being observed seems to demonstrate a market being oriented by the demand side. Actually, the demand addressed to cotton seems stagnant, as a result of the competition from man-made fiber, but also of changes in consumers' preferences. In such a demand-oriented market, countries, which are furthermore penalized, are those, which suffer from a negative image of its production.

85 Negative image could be related to objective and checkable factors like fiber intrinsic characteristics or its contamination by foreign matters, either organic or inorganic ones. In this regard, Mozambican fiber does not enjoy an honorable ranking according to the most recent surveys implemented by ITMF (International Textile Manufacturer Federation).

86 A close look to the international exchanges of cotton fiber shows that the exported volumes stagnated somewhat during the last decade; this means that the cotton exporting countries are competing for a global demand, which has become constant. Any gain in the exportation market by one country will be achieved at the expense of other countries. This is the sign of an international competition becoming harsher than before and exporting country has to be more active in its competition in the world market.

87 The analysis recalled above leads to advocate an active approach in defending and promoting the image of the Mozambican cotton, by combining various means. It is recommended to make use of modern means of communication by implementing a dynamic web site which could help reach many people, and also to join international forum related to cotton

(e) Association process

88 A solid and progressive process of creation of the farmers associations has been promoted in Mozambique by CLUSA although ancient efforts were made by ORAM and UNAC (local NGOs), a federation of agricultural cooperatives in the USA. CLUSA started first in the Province of Nampula by the end of 1995, while the extension were operated towards the Zambezia Province in 1999.

89 The phenomenon of creation of cotton farmers pre-association have led to accelerate the creation of new farmers associations or groups, bypassing the respect of the basic criteria that should guide such a creation. The phenomenon of bypassing basic criteria in setting up associations is not the only fault of the cotton operators; which promoted them. We observe that either in the "strategy for the cotton development" or in the transitional measures, there was no indication of the minimum background that the farmers associations should comply with before being in the position of claiming themselves "autonomous". Most of the people considered that 3-5 years are needed to have an association commanding correctly its internal functioning and the service it is asked to cope with.


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90 We have already dealt with the issue of output deviation, so that a farmer association could sell its output to a cotton company different from the one its has committed it. This situation is questioning the sanctity of the contract and may endanger the principle of contractual relationship between farmer organizations and the other economic operators.

91 Another behavior is endangering also this relationship. It comes from the output deviation from the family sector to the association sector. The consequence is that farmers from the family sector could obtain a better price they have to share with the associations, which intermediate. There are at least two consequences. One is the input credit recovery with the farmers from the family sector who have deviated their output. The second pertains to the reliability of the statistics at the associative level and the family level if the phenomenon is wide spread.

92 For all this observations and mainly in the Nampula province IAM have to cope with the associative process in order to avoid a drift towards virtual group of farmers created to by-pass the operators. This involvement should imply knowledge of the process and the existing associations in order to promote a real partnership between associations and operators.

93 The action of IAM shouldn’t manage the creation of association, but to monitor the process of developing association through a steering committee that associates various stakeholders, direct ones (IAM, Cotton Ginners, Privados, Existing Associations) and indirect ones (NGOs and Funders).

94 If the strategy of IAM is clear for the future, currently, any plan of action hadn’t been implemented by lack of means. Indeed due to low cotton prices resources (levy) fell at a very low level these 2 last years, and most of the present resources are absorbed by the running costs.

4. BUDGET AND RESSOURCES

95 IAM has two budgets:

4.1. BUDGET OF THE STATE (ORÇAMENTO GERAL DO ESTADO – OGE)

96 This budget is related with expenses, which are paid by the state: salaries and various allowances paid directly to the staffs that are civil servants. For 2002 this amount was budgeted 1.5 Billions of Mts (65.000 US$).

4.2. BUDGET OF IAM.

97 This budget is based on its own resources and without the OGE resources and expenses.

98 The total expenses series from 1996 to 2001 in Mts and US$ are the following:

Table 4. IAM expenses (off OE budget)

95/96 96/97 97/98 98/99 99/2000 00/01

Salarios/finanças 282 388 512 707 1 004 2 367 Salarios IAM 150 1 497 1 517 1 044 1 857 )

Ajudas de custo 116 397 302 257 154 ) Material expediente 55 88 112 94 103 1 085

Combustivel 80 377 392 354 366 )


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95/96 96/97 97/98 98/99 99/2000 00/01

Manut Rep 259 566 476 475 342 ) Reparaçao edificios 8 16 160 229 48 )

Communicaçoes 47 107 126 172 223 ) Agua e energia 41 85 115 103 91 )

Outras 2 065 6 727 5 902 4 076 3 792 2 626 Bens de inventario 1 053 707 122

TOTAL MTs 4 156 10 248 10 321 7 511 8 102 6 078 Exchange rate 11 300 11 430 11 850 12 450 15 160 20 000

TOTAL US$ 367 788 896 588 870 970 603 293 534 433 303 900

99 It is noticed that the expenses expressed in US$ are going down since 1996.

• Own resources

Table 5. Evolution of the resources since 1996

95/96 96/97 97/98 98/99 99/2000 00/01 Levy 5 324 4 614 9 993 5 547 7 292 6 671

Ginning 836 236 189 0 0 lint Classifying 98 53 83 43 56 14

Insecticide spraying 238 268 "Multas" 10 13

Lint Selling 44 559 141 627 201 364 Inscription 9 8 4 6 10

Selling of chemicals 3 029 52 Miscellaneous 1 493 210 1 474 278 193

Financial 290 380 585 839 1 003

TOTAL MTs 6 004 11 241 11 321 8 723 8 836 7 252 Exchange rate 11 300 11 430 11 850 12 450 15 160 20 000

TOTAL US$ 531 327 983 465 955 359 700 643 582 850 362 600

• Budget 2003

Table 6. Orçamento 2003 (Milhões Mts)

Sede Inhambane Sofala Nampula Cabo-Delga Total

DESPESAS CORRENTES Pessoal contratado 2 012 178 155 404 128 2 877 Pessol do quadro 2 710 155 181 292 167 3 505 Bens 685 84 155 318 129 1 371 Servicios 2 093 223 269 811 319 3 715 Bens de Capital 0 0 0 0 0 16 703 Multicação de sementes 0 0 0 0 0 4 272

TOTAL despesas 7 500 640 760 1 825 743 32 443 USD 1 352 RECEITAS 2000/2001 Taxa de Sobrevalorizaçéao 3469 Fundos do Estado 2110

TOTAL receitas 5 579 SALDO -26 864

100 The budget 2003 forecast a deficit of 26.9 billions of Mts. This deficit is the consequence of investments and seed program; without these 2 items, the deficit is 5.9 billions. For this reason its Directorate has requested assistance from the PROAGRI for this financial year for allowing the renewal of vehicles, equipments and some of the running costs.


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101 When examining the figures it seems that the amount of the levy is underestimated: on the basis of a price of 50 Us cents/lb i.e. around 37 cents in FOB position, a levy of 2.5% and a production of 25.000 tons of lint, the amount of the levy should be 500.000 USD (12.000 Milhões Mts).

102 This budget shows also the relative weight of the Headquarters running expenses, which represent 65% of the total expenses.

103 The item “Multicação de sementes” corresponds to the costs of multiplication of selected cotton seeds. The seed come from Zimbabwe in the framework of a PROAGRI financing.

104 The item “Bens de Capital” correspond to investment expenditures: equipment, cars ….

• Problematic of the levy

105 Its own resources are made up with a tax (levy) paid on the basis of the FOB value of cotton lint exported by the ginners. The levy in currently charged at a rate of 2.5%5. In fact due to the low cotton price and the reluctance of the ginners to pay this levy, the exporters had negotiated a reduction of its level. Since 1995 the values were the following:

Table 7. Resources coming from the levy

Taxa Levy INDEX A Levy Milhões US cents

CAMPANHA Mts /lb

Statuts 5,0%

1996 2,5% 5 324 80,35 1997 3,5% 4 614 79,2 1998 3,5% 9 993 65,3 1999 2,0% 5 547 53,13

2000 2,5% 7 292 59,11 2001 2,5% 6 671 48,06

106 This had a double incidence on the level of the IAM resources: low prices and a low level of the levy. This situation is very detrimental for IAM, which have mainly fixed costs.

107 We have worked out the theoretic level of the resources coming from the levy with the following assumptions:

o Cumulated period: 1995/96 to 2000/01 (6 years)

o Levy: real levy applied by IAM on the exported cotton lint

o FOB value of the cotton lint exported: INDEX A minus 10 cts/lb for FOB to CAF costs minus 8% of the CAF value for the quality rebate.

o Exchange rate USD/Metical: medium value from IEU figures report 2001. Estimated for 2000/2001.

o Exported lint: real figures coming from IAM.

o Levy cash by IAM: real figures.

108 The result show that the real levy cashed by IAM represent 73% of the worked out amount according the hypothesis mentioned above:

5 In its status the levy is 5% and concerns the totality of cotton produced in the country.


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Table 8. Real Cumulated Levy cashed by IAM

LEVY Exchange rate Amount

Year Levy % M MTS MTS/USD USD

1996 2,50% 5 324 11 300 471 150 1997 3,50% 4 614 11 430 403 675 1998 3,50% 9 993 11 850 843 291 1999 2,00% 5 546 12 450 445 462 2000 2,50% 7 292 15 160 481 003 2001 2,50% 6 672 20 000 333 600

TOTAL 2 978 181

Table 9. Estimated cumulated levy on the same period

US Cts/lb Quality rebate US Cts/lb Production Amount

Year CAF 8% FOB Seedcotton Worked out

1996 80,35 6,43 63,92 50 507 483 7271997 79,2 6,34 62,86 74 000 1 139 1211998 65,3 5,22 50,08 91 088 1 087 5431999 53,13 4,25 38,88 116 716 602 0652000 59,11 4,73 44,38 35 365 276 5132001 48,06 3,84 34,22 71 048 441 212

TOTAL 4 030 181

109 The difference noticed is 1.1 Millions US $. As the calculation is made up with 6 years cumulated one can suppose that the effects of the prices variation within the years and the stocks of lint remaining after each end of campaign are canceled. This means that the real FOB prices are much lower than those worked out for the calculation of the cottonseed purchase prices or that the levy is not totally paid by the ginners.

5. ASSESSMENT OF THE CURRENT ORGANIZATION

110 The organisation has been subjected to a “Diploma Ministerial” N° 76/2001, which define the internal organisation of IAM and the attribution of each Direction, department and Delegations in the country. Currently the organisation is under staffed compared to the organisation stated in the “Diploma Ministerial”.

111 Currently this organization do not take into account the institutional support provided by the EC (200.000 € over three years as well as the intended use of funds (hiring two tecnicos superior assigned at Maputo and Nampula).


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5.1. HEAD QUARTER OF MAPUTO

5.1.1. Current organisation

112 Currently, IAM has its headquarter in Maputo and the organisation is shown in the following organisational chart:

113 It is noted that compared with the organisation stated in the “Diploma Ministerial” 76/2001, there are some missing function that does not already exist: Department for supporting Associations6, delegations of Manica, Niassa, and Tete.

• Director e Director Adjunto

• Departamento de Classificação e Analise da fibra

• Departamento de Estudos e Projectos

• Departamento de Administração e Finanças

• Secretariado

• Delagações Provinciais de: Inhambane, Cabo Delgado, Nampula e Sofala.

6 This Department still exists but the staff in charge of this function is abroad in the framework of a long term training.

ORGANIGRAMA DO IAMACTUAL

Conselho Géral

SECRETARIO2

Estudos TecnicosEconomicos e Sociais

1

Estatisticas, Documentaçãoe Divulgação

1

DEPARTAMENTO DEESTUDOS e PROJECTOS

3

Salas deClassificação da fibra

2

Avalição e Controlodas Exportações

1

DEPARTAMENTOCLASSIFOCACÃO

DA FIBRA2

Contabilidada3

Rec Humanos2

Administração11

Patrimonio1

DEPARTAMENTOADMINISTRACÃO

E FINANCAS1

DelagaçãoNampula

19

DelagaçãoSofala

6

DelagaçãoCabo Delgado

6

DelagaçãoInhambane

8

DelegaçãoZambezia

1

DIRECTOR&

DIRECTOR AJUNTO2

Total : 72


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5.1.2. Organisation objective

114 It has been noted that IAM does not comply with its strategy in term of means and implementing action.

115 To comply with its strategy and perform the tasks, which have been pointed out by the assessment of the sub-sector as to be implemented or improved by IAM, it is necessary to strengthen IAM in term of human resources and equipment.

116 This reinforcement will take place mainly in the “Departamento de Estudos e Projectos” with the creation of 2 sections: “Produção e Protecção de plantas” in charge more specifically of the seed policy of the cotton sub-sector, “Assistencia Tecnica a projectos” in charge of the monitoring and evaluation of the projects sub-contracted by IAM. The section in charge of the collection of the information will be strengthened also.

5.1.3. Laboratory

117 Maputo Laboratory does not work right now, since it was supposed to test technology quality of fiber, while the tools are all the obsolete; however, the Maputo classing room classifies cotton from AGRIMO since 4 years ago, it is much easier sending samples to Maputo than to Nampula. In addition Maputo needs to continue having the classing room, for classing cotton that will be produced in the South and for rescuing whatever failures in any other classing room. Running costs (1 classifier staff) and maintenance are very low.

5.2. DELEGAÇÃO REGIONAL DE NAMPULA - NAMPULA

118 After Maputo it is the main branch of IAM. This “Delegação” is located in the most productive region of Mozambique (see above). In addition this “Delegação” is also in charge of the Provinces of Niassa.

5.2.1. Area of intervention

Province District Processing plants Production as at December 2002 (seed cotton)

NAMPULA Monapo, Namapa, Muecate, Mecuburi, Lalaua, Ribaue, Malema, Mogovolas, Moma, Nacaroa, Morrupula, Nampula

SANAM+SODAN : Namialo,

CANAM : Ribaue, Nametil, Nampula

SAN : Mutuali

Ex SAMO : Monapo

45.000 T

NIASSA Cuamba, Metarica, Maua, Nipepe

SAN : Cuamba 4.000 T


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5.2.2. Organisation of the “Delegação” de Nampula

119 IAM has premises in Nampula and Namialo which belong to its from 1995. Currently the “Delagação” run with 19 people within 3 sections: Lint Classification with 9 staffs, Fomento with 3 staffs and Administration with 6 staffs. Among these 19, 11 are civil servants.

• Section Lint Classification: there are a head of section, 4 classifiers, 3 assistants classifier and an administrative assistant for the follow-up of the data. During the 2000/2001 campaign they classified 84.000 samples of lint. The classification room has an humidifier air conditioner that are in very bad condition. In addition to prepare the sample to be distributed to the ginners for the grading of the seedcotton, to control the exportation in the port of Nacala and carry out ginning tests in the factories they have no means of transport. For the future, it would be necessary to get a car.

• Section Fomento: this section has 3 staffs. One is in charge of the statistic and data collection and 2 are on the ground in Namialo and Cuamba. They have no means of transport and depend on the concessionaires for their transport.

• Section Administration: this section has 6 staffs, 1 accountant, 1 treasurer, 1 Secretary, 1 driver and two watchmen.

• Means of work: currently there is one car able to run and it is more than 10 years old, there is no computer. There is one car and a computer from the outsourcing project, financed by the EC, which is used by the Supervisor (Tecnico Superior) of the 3 projects (Cabo-Delgado, Nampula and Zambezia).

Mercados

ORGANIGRAMA DELAGAçÃO PROVINCIAL DE NAMPULAACTUAL

Sercretaria1

AdministraçãoTresoreiro : 2Motorista : 1Guarda : 2

Estatisticas1

Tecnico MedioNamialo

1

Tecnico BasicoCuamba

1

SectorTecnico,Fomento, Fiscalisação

Concesionarios0

SectorClassificação

1 Chefe sector4 classificadores + 4 serventes

DELEGADOREGIONAL

1

DDADR

Provincia de

Zambézia

Provincia de

Niassa

Mercados


Sercretaria1


Estatisticas1


1


1


Concesionarios0



DELEGADOREGIONAL

1

DDADR

Provincia de

Zambézia

Provincia de

Niassa


Sercretaria1


Estatisticas1


1


1


Concesionarios0



DELEGADOREGIONAL

1

DDADRDDADR

Provincia de

Zambézia

Provincia de

Niassa

Provincia de

Zambézia

Provincia de

Niassa

Provincia de

Zambézia

Provincia de

Niassa


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120 Conclusion: This structure is very light and has no means to carry out its duty in good conditions.

5.2.3. Projected organisation

121 To carry out its duty at a minimum level, it would be necessary to hire an Agronomist (Tecnico Superior) who would be in charge of the section with the following tasks: cotton development, monitoring the concessionaire, seed policy, associative sector and correspondent of the DEP of Maputo7 and one for the monitoring of the 2 outsourcing projects (Nampula and Cabo Delgado). On the ground the needs are 2 “tecnicos medio e basico” equipped with car and motorbike. These “tecnicos” would be in charge of the monitoring of the concessionaire (area planted under cotton, agricultural practices, quality of the inputs, cotton market etc…):

• One “Tecnico superior” would be based in Namilao, which is the main area of production and he would work with a “tecnico medio”. He would be in charge of the district of Ribaue, Lalaua, Mecuburi, Morrupula and Nampula. A provision of 5000 USD would be taken to refurbish the premises and a vehicle is also required. The other will be based in Nampula.

• The “Tecnico medio” would be in charge of the districts of Monapo, Meconta, Muecate, Namapa, Nacaroa, Mogovola and Moma. For this he needs a car.

• The “Tecnico basico” based at Cuamba would be in charge of the districts of Cuamba, Moma, Nipepe and Metarica. For his work he would need a motorbike.

5.3. DELEGAÇÃO PROVINCIAL DE CABO DELGADO - PEMBA

122 This Delegation is located in Montepuez where PLEXUS operate a ginning factory. MOCOTEX and SODAN do not operate anymore their ginning factories. The production of MOCOTEX is ginned at Montepuez (PLEXUS) and SODAN in Namialo (SODAN). Currently, there is only one operating ginnery in Cabo Delgado.


Province District Processing plants Production as at December 2002 (cotton seed)

CABO DELGADO Ancuabe, Montepuez, Namuno, Balama, Moeda, Meluco, Macomia, Muidumbe, Quissanga, Metuge, Chiure.

PLEXUS: Montepuez

MOCOTEX: Mahate (not operting), SODAN: Monapa (not operating)

12.000 T

5.3.2. Organisation of the “Delegação” of Montepuez

123 IAM has its premise in Montepuez which belong to its. Currently the “Delagação” runs with 6 staffs within 3 sections: Lint Classification with 2 staffs, “Fomento” with 1

7 These tasks do not allow this agronomist to monitor the outsourcing projects.


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“tecnico medio” and Administration with 2 staffs. This entire people are contracted directly by IAM even the Delegate.

• Section Lint Classification: there is a classifier and one assistant classifier. During the 2000/2001 campaign they classified 20.000 samples of lint. The classification room has an humidifier and air conditioner out of service.

• Section Fomento: this section has 1 “Tecnico Medio” in charge of all the districts and partially of the administration; he has no means of transport!

• Section Administration: this section has 2 staffs, 1 secretary and one watchman.

• Means of work: currently there is one car able to run (bought in 95) a computer and a fax are coming soon.

124 Conclusion : This structure is very light and has no means to carry out its duty in good conditions.


125 The projected production for PLEXUS and MOCOTEX is 30.000 tons of seedcotton in the next 3 years.

126 To carry out its tasks at a satisfactory level, it would be necessary to hire in addition of the existing Tecnico, 1 Tecnico medio who would be in charge of the Fomento and the monitoring of the concessionaires.

• The “Tecnico medio” in Montepuez would be in charge of the north of the province. For this he would need a car.

• The “Tecnico medio” based at Namuno would be in charge of south of the province. For his work he would need a motorbike.

5.4. DELEGAÇAO PROVINCIALE DE INHAMBANE AND GAZA - MAXIXE

5.4.1. Current situation

127 Currently the province of Inhambane does not produce a significant quantity of cotton. But in the past it was a producer (see table below):

Table 10. Produção de Algodão Caroço (toneladas)

90/91 1658 T 91/92 1353 92/93 723 93/94 4740 94/95 435 95/96 1055 96/97 703 97/98 1069 98/99 175

90/2000 95 00/01 108 01/02 17

128 As it can be noticed the current production is very low compared to other provinces. Formerly there have been private operators in cotton, but due to climatic difficulties (drough and floods) they all abandon this business. In some districts many farmers are


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familiar with cotton growing and unfortunately there is nothing else to grow as cash crop. This is why IAM is trying to re-launch the cotton production in the area of Inhassune. This project is described annex 7. The final objective of IAM is to attract a private operator in cotton business. This project is financially very costly because there is no operating factory in the area.

129 The premise are own by the DPADR which maintain the office. The delegation comprises 8 people: 1 Delegate, 1 accountant, 1 secretary, 1 administrative, 1 watchman. 1 “tecnico” in charge of the project (see annex) and 2 other workers.


INHAMBAME + GAZA

Panda, Homoine, Massinga, Inharrime, Morumbene, Mabote Funhalouro.

Jangano (out of service)

17 tons.

130 There are absolutely no means of work: no car, motorbikes or any other office facilities as computer, fax or photocopier.

5.4.2. Conclusion

131 This province currently produces some tons of cotton. The maintaining of this delegation is justified by the activity of the future project. If the project is not implemented, the closing of the delegation should be seriously considered.

5.5. DELEGAÇÃO PROVINCIAL DE SOFALA - BEIRA

132 This Delegation is located in Beira where CNA operate a ginning factory.



SOFALA Buzi, Caia, Chemba, Cheringoma, Chibabava, Gorongosa, Maringue, Marromeu, Nhamatanda

CNA : Beira

12.500 T

MANICA Gondola, Macossa, Manica, Sussundenga, Tambara.

133 It could be noted that CNA has a very ambitious cotton development project. It is scheduled on 4 years and the production is to reach 26.600 Tons. There is also a project of extension of ginning capacities (see Cotton Study Part 2 – Vol 1 – November 2002).


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5.5.2. Organisation of the Delegation of Sofala

134 IAM has its premise in Beira, which belong to DPADR. It has been noted that these premises are insalubrious: walls and cellars are damp because of leaks in the building. It is very difficult to work properly in such condition. It is proposed to build news premises (300 m² with a classifying room with its annexes and 4 offices for the staff).

135 Currently the “Delagação” runs with 6 staffs within 2 sections. Three of these people are contracted directly by IAM the three other are civil servants. The Delegate is also Head of the Agricultural Services.

• Section Lint Classification: there are one classifier with an assistant classifier. During the 2000/2001 campaign they classified 13.050 samples of lint8. The classification room has an humidifier and air conditioner both out of service.

• Section Fomento: this section is not in operation.

• Section Administration: this section has 3 staffs, 2 administrative and one watchman.

• Means of work: currently there is only one car able to run (bought in 95), there are no computer, fax machine, photocopier, air conditioner and office furniture’s are in a very poor condition.

136 Conclusion: This structure is very light and has no means to carry out its tasks in good conditions. In addition, the working conditions are hard.


137 The projected production for CNA is 26.600 tons of seedcotton in the next 4 years, and there will be probably a cotton development in the province of Tete9.

138 To carry out its duty at a minimum level, it would be necessary to hire 2 “Tecnicos Medio” One based in Beira for the Sofala and Manica Provinces, the other based in Tete. They would be in charge of the Fomento, Monitoring of the concessionaires, and the associative sector. For their work they will need both a car, and one office for the one in the province of Tete.

5.6. DELEGAÇÃO OF ZAMBEZIA - QUELIMANE

139 There is no operating delegation in Zambezia, the AGRIMO’s cotton is classified in Maputo while the other two companies cotton is classed in Nampula.

140 While the province has not been a very significant producer of cotton, the peak of production was in 98/99 with 4250 tons, and since this date the production is declining. Currently, there are three concessionaires: Agrimo, Mocotex and Inbramugi. As at 30/10/2002 the production of seed cotton is 2.459 tons. Agrimo is the most active with 2.043 tons, Ibramugi has produced 416 tons, and Mocotex has not provided data of its production for this year.

8 The average is 5 samples per Metric ton. 9 Dunavant Mozambique Ltd was granted a concession of 4 districts is this province. A new company formed with the CCZ (Zimbawe) and SOGIR are interested in 3 districts in the province of Tete (ex Clark Cotton) and 2 district in the province of Manica (ex Textafrica).


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ZAMBEZIA Morrumbala, Mutarara, Mopeia

Mocuba

Alto Molocue

Agrimo: new factory

Mocotex (not active)

Inbramugi (not very active):

2459 tons

141 With the roads rehabilitation ongoing it is very likely that the production of cotton will increase during the next years. In this assumption, it will be necessary to develop the delegation, to set-up a classifying room, and to monitor the concessionaires. The development is not for the next year and should intervene when the production reach at least 5.000 tons (10.000 samples to classify).

5.7. SUMMARIZE OF THE DELEGATIONS ASSESSMENT

Table 11. Situation and main characteristics of the Delegations


Cabo-Delgado

Sofala /Manica

Inhambane /Gaza

Zambezia

Location Nampula Montepuez Beira Maxixe Quelimane

Owner of the premises

IAM IAM DPADR DPADR DPADR

Delegate Yes Yes (not civil servant)

Yes Yes No

Number of Staffs

19 6 6 8 1

Classifying room

Yes Yes Yes No No

Production of Seed Cotton (T) 2001/2002

49.000 12.000 12.500 17 2.500

Ginning plant in operation

7 1 1 0 1

Working conditions

Poor Poor Very Poor Very Poor DPADR

142 The relationship between IAM and DPADR are not always clearly delimited.

• In Beira the Delegate is also Head of the Agricultural Services and the premises belong to DPADR which maintains it. They also benefit from equipments and facilities of PROAGRI and other projects.


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• In Maxixe the premises belong and are maintained by DPADR. They benefit from the assistance of tecnicos belonging to DPADR.

• The monitoring–evaluation of the outsourcing projects (UE financing) is carried out jointly with DPADR.

• Many staffs in the Delegations are civil servants detached from DPADR.

6. CONCLUSIONS - MEANS AND COSTS - NEW RESOURCES

143 In the paragraph 3.2.2 we have determined the additional strategic tasks that should be implemented by IAM in the future in addition of the lint classification:

• Monitoring the seed policy.

• Monitoring the concessionaires.

• Improvement of the current cotton information system.

• Improving the Mozambican cotton image

• Monitoring the associative development process.

144 These functions are essential to develop a modern cotton sub-sector in Mozambique. Indeed:

• New varieties of cotton, means better yield at the farmer level and better ginning outturn at the ginner level and eventually better revenues for the ginner and the farmer.

• Monitoring the concessionaire means, better inputs and improved agricultural practices. The result will be a better yield per ha at the farmer level and a lower cost price for the ginner.

• Monitoring the associative process means moving toward a real partnership between farmers and concessionaires.

• Improving the Mozambican cotton image will reduce the quality rebate, which currently the Mozambican cotton is subjected.

• Improving the cotton data collection at the Mozambican should improve the monitoring and the relationship between IAM/Concessionaires/Associations in the cotton sub-sector in Mozambique.

6.1. NEW ORGANIZATION

145 As it had been noticed above that IAM is currently doing its best to classify the cotton lint and collects data with very poor means. There is a lack of human resources at the high and medium level, and means of work in each delegation visited.

146 To carried out these new tasks and comply with its strategy positions should be created at the Headquarters and Delegation levels, studies and projects should be implemented

6.1.1. Headquarter level:

• Reactivation of a department in charge of the Associative Sector: Due to the location of the production and the associations this department should be located in Nampula and allocated with a “Tecnico Superior” under the responsibility of the Director of IAM.


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• Strengthening the departments of “Estudos and Projectos” with the creation of :

o 1 position of Tecnico Superior in the service of “Produção e Protecção de Plantas” in charge of the seed policy,

o 1 position of Tecnico Superior in the service of “Assistencia Tecnica a projectos” in charge of the monitoring of the concessionaires.

o 1 position of Tecnico Superior in charge of the monitoring evaluation of the 3 outsourcing projects financed by the UE.

o 1 position of Tecnico Superior in the service “Estatistica, Documentação e Divulgação” in charge of the improvement of the information system.

6.1.2. Delegation level:

147 Each Delegation should have

• 1 or 2 Tecnicos Medio in charge of the development and the monitoring of the concessionaires (including the seed policy).

• In Nampula Delegation, which is located in the main Province for cotton production and number of concessionaires, the position of “Fomento, Fiscalização” should be created with a “Tecnico Superior”.

148 The new organizational chart for the Headquarter and Nampula are the following. The other organisational charts are detailed in annex 4.

ORGANIGRAMA DO IAMOBJ ECTIVO

Conselho Gér al

S ECRETARIO2

P roduç ão e p ro -t ec ç ão de plan ta s

2

Est a t ist ica, Doc-cume nt ação e Divulgaçã o

2

Assist enc ia Tecn ic aa P rojec to s

2

Est udos Te cn icosEconomico s e socias

1

Mon ito ring Evalua t ion1

DEP ARTAMENTO DEES TUDOS e P ROJ ECTOS

1

DEP ARTAMENTOASSOCIACOES

1Nampula

Labo ra to rioCla ssif icaç ão fib ra

2

Ava liação e Con tr olodas Expo rt a ções

1

DEPARTAMENTOCLASS IFOCACÃO

DA FIBRA1

Cont abi lida da3

Rec Huma nos3

Admin ist r açã o9

Pat rimonio2

DEPARTAMENTOADMINISTRACÃO

E FINANCAS1

Dela gaçã oNa mpu la

Dela gaçã oSo fa la

Dela gaçã oCa bo Delgado

Dela gaçã oInha mban e

Dele gaçã oZambez ia

DIRECTOR&

DIRECTOR AJUNTO2


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6.2. MEANS AND COSTS

6.2.1. Means

149 The means has been forecasted according the objective of each delegation and for the Headquarters. These means are the following:

150 The procurements for the headquarters come from the budget 2003.

Investimento Numero CUSTOSSEDE UNIT US$

Minibus 2 23 000 Veiculo 4 WD 5 28 000 Veiculo Ligero 8 15 000 Motos 1 6 500 Computador 10 2 000 Impressora 10 800 Fotocopiadoras 1 7 500 Fax 2 800 Laptop's 4 2 500 Air con 10 1 000 Projector digi 1 3 000 Diverso 1 10 000

TOTAL 382 600

ORGANIGRAMA DELAGAçÃO PROVINCIAL DE NAMPULAOBJECTIVO

Sercretaria1


Monitoring EvaluationOutsourcing

Projects1 TS

Estatisticas1


1


1


Concesionarios1



DELEGADOPROVINCIAL

1

Mercados

DDADR

OutsourcingCabo Delgado

OutsourcingZambezia

OutsourcingNampula

Provincia de

Zambézia

Provincia de

Niassa

ORGANIGRAMA DELAGAçÃO PROVINCIAL DE NAMPULAOBJECTIVO

Sercretaria1


Monitoring EvaluationOutsourcing

Projects1 TS

Estatisticas1


1


1


Concesionarios1



DELEGADOPROVINCIAL

1

Mercados

DDADR

Mercados

DDADRDDADR


OutsourcingZambezia

OutsourcingNampula


OutsourcingZambezia

OutsourcingNampula

Provincia de

Zambézia

Provincia de

Niassa

Provincia de

Zambézia

Provincia de

Niassa

Provincia de

Zambézia

Provincia de

Niassa


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151 The additional running costs for the headquarters are the following. These costs take into account the costs of the monitoring evaluation financed by the UE for the 3 outsourcing projects.

152 For the Delegations the detail of the additional means and costs are the following:

ACTUAL OBJECTIVO CUSTOSSEDE SEDE SEDE UNIT US$

Director 1 1 - Director Ajunto 1 1 - Secretario 2 2 - Departamento Administração e Finanças 1 1 - Contabilidad 3 3 - Rec Humanos 3 3 - Administração 11 11 - Departamento de Estudos e projectos 1 1 - Estudos 1 1 - Estatisticas Documentação 2 2 - Produção e protecção de plantas 1 2 1 12 000 Assistencia Tecnica a Projectos (1 para EU Projecto) - 2 2 12 000 Departamente Classificação fibra 1 1 - Laboratorio classificéção 2 2 - Avaliação das exportações 2 2 - Departamento Assocoações - - -

TOTAL 32 35 3 36 000

CUSTOS UNITARIOSRUBRICA Nampula Cabo-Delg Sofala Inhambane Zambezia Equipamto Funciona

Delegado - - - - - US $ US $Secretaria - - - - - Treisoreiro/Contabilista - - - - - Administração - - - - 2 2 400 Viatura - 1 1 1 1 28 000 6 000 Motos - - - - - 6 500 700 Computador 2 - 1 1 1 2 000 - Machina de fotocopia 1 - 1 1 1 1 500 - Fax - - 1 1 1 500 - Escritorio - - 1 - - 90 000 - Equipamento 1 - 1 - - 15 000 - Sector classificação - - - - - Classificador -

institutionnal & functional analysis review of iam · 2013. 9. 18. · institutionnal & functional...

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