Wednesday, August 10, 2016

Zimbabwe Farmers Deliver 16m kg of Cotton
August 11, 2016
Business Reporter
Zimbabwe Herald

FARMERS have delivered 16 million kilogrammes of cotton since the start of the selling season, official figures show. Seed cotton intake as at July 29 showed 15,9 million kg of the crop had been delivered, down from 36,5 million kg during the same period last year, the Agriculture Marketing Authority said. Eight companies were licenced to buy the crop this year.Most companies are paying an average price of 36c per kilogramme. While Cottco is paying 35c per kilogramme on the spot, the company is issuing promissory receipts to farmers indicating that it will adjust the price to 45c kg.

Cottco, which is buying the crop on behalf of the Government has bought about 6 million kg, followed by Olam (3,1 million kg), Grafax (2 million kg and Alliance Ginners at 1,5 million kilogrammes.

Cotton output is expected to decline this year due to a combination of factors including poor rains.

While farmers received some free inputs under Government’s input support programme, the yields will not match the seed volumes taken up by farmers due to poor rains.

There was also a marked decline of cotton growers this season after many farmers abandoned the crop citing viability issues. Farmer organisations have estimated the crop size may decline to around 75 000 tonnes compared to just above 100 000 tonnes produced last year. In the 2013 /14 season, cotton output was 135 000 tonnes.

The fundamental challenges in Zimbabwe’s cotton industry are poor grower viability, side marketing and poor vertical integration.

The approaches that have been tried since the privatisation of the Cotton Marketing Board in 1994 include liberalisation of the sector and the entry of new players as well as the promulgation of a new legal framework to control side-marketing.

According to some analysts, there is need to revert to a state controlled monopoly, the Cotton Marketing Board whose mandate extends beyond primary cotton production to value addition. The board can then contract a competent operator, to run the cotton industry on its behalf.

This has some key advantages. There will be an improvement of grower yields due to the supply of the correct inputs package and agronomy support.

Yield growth will drive grower viability, improved debt repayment and the recovery of cotton production. This growth can be achieved without resorting to risky GMO technology.

The reinstatement of the seasonal pool price and quality bonus payments will improve crop quality and sector viability, enabling the nation to regain its reputation for top quality. Higher yields and higher crop volumes will result in improved operational efficiencies and competitiveness, thereby allowing higher producer prices.

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