Cotton Price Stabilization Board
Encyclopedia
The Cotton Price Stabilization Board (Caisse de Stabilisation des Prix du Coton or CSPC) was a Chad
ian governative board created in 1968. Its task was to stabilize prices paid to peasant producers by funding operating losses incurred by Cotontchad
, the parastatal giant that bought, ginned and sold all the cotton
produced in Chad. The CSPC also played an important role in the program to improve yields: it is estimated that between 1971 and 1983 57% of all payments by the CSPC were made in conjunction with the program to improve cotton production. As for the funding of the CSPC, between 1971 and 1983, virtually all income to the CSPC derived from rebates paid by Cotontchad into the system. After 1984 the sharply reduced income of Cotontchad made the system for paying the producers heavily dependent on external sources of funds (such as Stabex
), while the government completely exempted Cotontchad from the rebates to the CSPC. The difficulties of the CSPC, whose staffs had already been considerably reduced in the late 1980s, came to a head with the great recession that hit the cotton market between 1991 and 1993, bringing to the abolishment of the board in 1993. It was decided to let the prices paid to the producers fluctuate freely, following the international price of cotton.
Chad
Chad , officially known as the Republic of Chad, is a landlocked country in Central Africa. It is bordered by Libya to the north, Sudan to the east, the Central African Republic to the south, Cameroon and Nigeria to the southwest, and Niger to the west...
ian governative board created in 1968. Its task was to stabilize prices paid to peasant producers by funding operating losses incurred by Cotontchad
Cotontchad
The Société cotonnière du Tchad, also called Cotontchad, is a parastatal Chadian company operating in a monopoly regime that buys and exports all the cotton produced in Chad, a product which represents 40% of the country's exportations and in the past years has been even more dominant...
, the parastatal giant that bought, ginned and sold all the cotton
Cotton
Cotton is a soft, fluffy staple fiber that grows in a boll, or protective capsule, around the seeds of cotton plants of the genus Gossypium. The fiber is almost pure cellulose. The botanical purpose of cotton fiber is to aid in seed dispersal....
produced in Chad. The CSPC also played an important role in the program to improve yields: it is estimated that between 1971 and 1983 57% of all payments by the CSPC were made in conjunction with the program to improve cotton production. As for the funding of the CSPC, between 1971 and 1983, virtually all income to the CSPC derived from rebates paid by Cotontchad into the system. After 1984 the sharply reduced income of Cotontchad made the system for paying the producers heavily dependent on external sources of funds (such as Stabex
Stabex
The Stabex is the acronym for a European Commission compensatory finance scheme to stabilise export earnings of the ACP countries...
), while the government completely exempted Cotontchad from the rebates to the CSPC. The difficulties of the CSPC, whose staffs had already been considerably reduced in the late 1980s, came to a head with the great recession that hit the cotton market between 1991 and 1993, bringing to the abolishment of the board in 1993. It was decided to let the prices paid to the producers fluctuate freely, following the international price of cotton.