Out Of Africa: Cotton And Cash

Lira, Uganda

William B. Dunavant Jr. embraced the African cotton market long before his competitors.

WHERE is he? the old woman asks. Where is he?

Finding Dennis Okelo used to be easy. The old woman — and most other people in a village outside of Lira, the provincial capital of northern Uganda — went directly to Mr. Okelos fields. He was always in one of his gardens, with his slacks rolled up above his calves and a short hoe close by. Or he was seated outside of his mud-brick house under a banana tree.

Then cotton growing revived in Uganda, and Dunavant Enterprises came to town about five years ago, paying cash on delivery. After three seasons of growing cotton for Dunavant, the worlds largest privately owned cotton broker and one of the biggest family-owned agribusinesses in the United States, Mr. Okelo, who owns less than three acres and has two wives and a passel of children, had saved $300, about double his annual earnings before Dunavant started buying his cotton.

Last summer, Mr. Okelo opened a grocery store, which is where the old woman finally found him: smiling, standing behind the wooden plank that serves as his service counter in a shop the size of a utility shed. The grocery, one of two in the village, carries dried foods, cooking oil, matches, cosmetics, batteries and candy.

Before Dunavant, no one came to help us, says Mr. Okelo, 40, who has farmed a variety of crops in these parts for about 20 years.

Dunavants decision to operate on the ground here is a little-noticed sign of the new scramble for African resources. While the pursuit of oil, gas and minerals grabs more attention around the continent, farm crops are also lucrative and coveted — perhaps none more than cotton. Cargill, another family-owned American agribusiness, is also chasing a piece of Africas annual cotton sales, though with less intensity than Dunavant.

All of this is occurring amid a face-off between American and African cotton growers. Although the United States and Africa have vanishing textile industries, they remain the worlds two leading exporters of raw cotton, with about $4.9 billion and $2.1 billion, respectively, in annual cotton sales, amounting to more than half of the $12 billion market worldwide.

Because of tectonic shifts in textile production that have made China and India global leaders, Americans, the richest cotton growers in the world, compete directly with Africans, the worlds poorest. And Dunavant Enterprises, based in Memphis, buys from both, at essentially the same price. Finally, the pursuit of cotton in Africa is drenched in history. More than two hundred years ago, American cotton growers imported slaves from Africa to turn cotton into one of the nations economic engines. Contemporary cotton kings, in yet another commentary on how small the world has become, go directly to Africa for their product — and, led by Dunavant, they are helping Africans become more competitive with American growers.

The whole situation is magnificent news, especially when the problem has been zippo investment by large corporations in Africa, says Robert H. Bates, an economist at Harvard and a specialist in African agriculture.

Others agree.

Part of the good news is that the Dunavants and the Cargills will be in Africa for a long time, says John Baffes, an economist and cotton analyst at the World Bank. Those guys are willing to invest a lot of money and to buy in good years and bad years.

In parts of Africa where farmers have been rocked by instability of various sorts — from H.I.V. to civil war to abusive, government-run farm corporations — consistency is a welcome virtue. For Africans who have struggled with globalization, Mr. Baffes added, this is a validation.

IN his small shop, Mr. Okelo knows nothing of global developments in the cotton trade even though he is a direct beneficiary of them. He started farming during the lean years in Uganda, after the ouster of the countrys notorious dictator, Idi Amin, when the cultivation of cotton lagged so badly that production nearly ceased and farmers treated the crop like a weed.

A few years ago, as Ugandas production began to revive, Dunavants trainers taught Mr. Okelo to grow cotton in straight rows and to use a string to measure precisely the distance between rows, to maximize plantings. Mr. Okelos new methods are basic, but in a part of Africa where farmers work the land chiefly with a hoe — and tractors, fertilizer and pesticides are rarities — even basic improvements can lead to large gains in production.

Cotton is the crop that gives farmers the best money, Mr. Okelo said. I want Dunavant to be even closer to me.

So do thousands of other African farmers in Uganda, Mozambique and Zambia, the three countries where Dunavant operates cotton gins and buys virtually every boll offered. In Zambia, where it has its oldest and largest African operation, Dunavant buys directly from 180,000 small farmers, relying on hundreds of its own purchasing agents. To help expand production in Zambia, a land-rich southern African country, Dunavant lends millions of dollars a year to farmers at the start of each growing season; the farmers repay at harvest time. Last year, the lending in Zambia amounted to $10 million.

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