IT’S a boon for cotton producers who this season reaped a bumper harvest coupled with a “good crop and good price” offered by ginners following a pro-active intervention by Government to ensure fair pricing of the white gold.
The Agriculture Marketing Authority has maintained a tight grip on the sector and last week withdrew buying licences from three companies that had not fulfilled the Reserve Bank of Zimbabwe requirements of declaring offshore funds.
The private companies – Graphax, ETG Parrogate Zimbabwe and China Africa – had been issued licences to buy cotton without first bringing offshore funds, raising furore that they wanted to circumvent the RBZ Foreign Exchange Act.
Cotton Traders and Marketers Association of Zimbabwe chairman, Mr Stewart Mubonderi, has since appealed to the Zimbabwe Anti-Corruption Commission to probe the licences issuance scandal, arguing that it has the potential to derail efforts to revive the cotton sector that had been crippled by a parasitic contract farming regime.
In Manicaland, only Cottco is now buying the white gold, amid revelations that the over 90 percent of the crop was produced under the Presidential Inputs Scheme. Cotton Producers and Marketers Association provincial treasurer-general, Mr Skumbuzo Tondlana, hailed Government’s stance since the beginning of the cotton buying season a fortnight ago, for ensuring trading normalcy.
He said his association, which comprise of resources poor small-holder farmers, was expecting a cumulative 70 000 tonnes of white gold, adding that farmers were happy with the price.
Mr Tondlana added that cotton farming was a trade benchmarked by escalating demands for high quality lint — and farmers this season improved both the eminence and yield of their crop in order to get better returns on their investment.
He attributed this season’s success to the Presidential Inputs Scheme. “About 99 percent of the crop in Manicaland was funded through the Presidential Inputs Scheme, and these other companies that had their buying licences withdrawn actually wanted to cause chaos by stealing the crop whose production was sponsored by Government — by encouraging side marketing. They did not fund any production in Manicaland, and that is why they operate during the night, encouraging side marketing,” said Mr Tondlana.
“This season, we have managed to glean the highest cotton yield in 15 years. It is a bumper harvest, and farmers are happy with the prices. Cottco is paying $0.47 per kilogramme, before grading, and the farmers will be paid the balance after grading.
“We expect Grade A cotton to fetch 55 cents per kg. This enables cotton producers to break-even and recoup production costs, unlike in past seasons where the process to bring the rightful pricing regime was hamstrung by the ginners’ refusal to play ball,” added Mr Tondlana.
Mr Tondlana said there was need for cotton value addition to enable farmers to accrue maximum benefits from their sweat and create employment in rich cotton producing communities. “We need to invest in ginning equipment that process cotton lint to create employment. Farmers should also be paid for the seed and not only the lint. Ginners are accruing benefits from the seed (for the subsequent season), oil and cake (stock feed).
“Farmers need to do toll-ginning, that is to make an arrangement with ginners to have their crop ginned (before payment is done) so that they can be paid for the lint, seed and oil,” said Mr Tondlana. Mr Tondlana, whose association has more than 30 000 producers, said the Presidential Inputs Scheme and Command cropping should be extended to cotton next season.
“We want the farmers empowered next season. The whole industry had collapsed due to a contract farming regime that underfunded production leading to poor harvest. Government should continue capacitating cotton farmers,” said Mr Tondlana.
Over the years cotton prices ranged between US35c and US42c per kg, resulting in the Cotton Ginners Association being rapped for having a stranglehold over ginning companies, thereby negatively influencing firms to charge blanket prices which disadvantage farmers and must be reformed to allow individual companies to determine their own prices as a long term solution to challenges facing the sector.
The model used to fund cotton production and price formulation crippled farmers’ operations, forcing producers to demand reforms to end the CGA’s monopoly. Ginners on the other hand said there was need to review each stage of the chain through increasing yields, Government subsidy of farmers as well as restoring merchants’ confidence in funding cotton production.
CGA argued that the cotton prices were arrived at by taking three factors into consideration, that is the cost of production for farmers, the cost of production for ginners and the likely international cotton prices when it is sold.