Cotton Price Woes Continue

Zanu-PF Member of Parliament for Gokwe/Nembudziya Cde Justice Mayor Wadyejena has castigated cotton merchants for holding farmers to ransom by offering lower prices for the crop under the pretext that these are the international market prices.

Cde Wadyejena, whose constituency is among the top cotton-growing areas in the country and region, said farmers in his constituency were living in abject poverty despite producing high-quality cotton every season.

He said the local merchants were buying cotton at prices as low as US$0,30 cents a kg which in turn they export at more than 10 times the price they would have bought it from the local farmers.

“We continue hearing the issue of international market determining the prices of cotton. Who is this international market? What has this got to do with our crop which we produce at our own standards and which has nothing to do with the international markets. The international market issue only comes in when it comes to selling. This must be done away with and we must have the local merchants paying better prices to our farmers,’’ said Cde Wadyejena.

He said Gokwe/Nembudziya was different from other areas where other crops such as tobacco would do well. His constituency was known specifically for cotton growing with farmers having no option but to grow that crop year in, year out.

“I think as Government we have to do something urgently so that we do not continue seeing our farmers getting poorer every season. Some who venture into contract farming have even become poorer as the contract companies move in swiftly grabbing the farmers’ assets in the event of failing to pay back. But do these companies consider how much the farmers are selling their crop for? There must be a balance here because it is not a secret that crops are being bought for a song,’’ he charged.

According to NYMEX-CME Group, cotton prices, as of the month of July 2014, ranged from $0,80 cents a pound to $0,84 cents, a clear sign that the prices were actually well above what the local merchants claim are international market prices.

In fact as of 2009 to date, cotton prices were going up.

With information from the United States, it clearly shows that the local farmers are being taken advantage of.

As if this was not enough, the Competition and Tariffs Commission ordered cotton associations not to enter into price negotiations with ginners and textile players as was the norm.

The Tariffs Commission has been heavily criticised for making such an order as this move has seen farmers losing out.

Currently merchants are buying the crop at prices ranging from US$0,35 to $0,55 a kilogram, far below what the growers are calling for.

Growers had initially indicated that a price of between US$0,90 and $1,50 a kg would make them break even since last season most of them failed to realise any profit after prices were as low as US$0,30 a kg.

As a result, most growers abandoned operations during the 2013/ 14 season.

Zimbabwe National Cotton Council (ZNCC) has, however, blamed the Competition and Tariffs Commission for not allowing cotton growers to engage the ginners and textile players on issues to do with pricing.

The Competition Tariffs issued this warning early this year saying such negotiations should be stopped arguing that the farmers were being ripped off by these ginners and associations doing the negotiations on the farmers’ behalf.

In a telephone interview with The Sunday Mail, ZNCC vice-president Mr Garikayi Msika said the move would disadvantage farmers as they have no option but to sell their cotton at the low prices being offered.

“Farmers are now being taken advantage of by merchants who are misleading them that international prices of the crop are going down and this is forcing farmers to sell their cotton at a lower price of US0,30 cents per kilogram,” he said.

Mr Msika said farmers were being misled on the notion of the international market whose prices only start going down as the season progresses, usually around December, adding that as such this should not determine local prices at the moment considering that Zimbabwe’s cotton was of great quality as compared to others in the region.

Mr Msika said while a statutory instrument was in place, which allows unions to set minimum prices for the crop, the directive by the Tariffs Commission had blocked the use of this instrument.

“There is a Statutory Instrument which allows our unions to set minimum prices for cotton but this season is a different year altogether,’’ he said.

He added that traditionally farmers’ unions used to sit down with farmers and map the way forward together on the pricing of cotton.

He said ginners used to form cartels of at least 15 companies and come up with one price and farmers had always been at the receiving end.

“Farmers are always at the receiving end and get forced to shift to other crops, he said.

He said because of the inconsistency on the pricing issue, growers who were contracted to grow the crop were likely to side market their crop as they would be looking for better prices on offer so that they realise a profit as well as be able to go back to the fields next season.

“Cotton is going to be affected by side marketing because of inconsistency of prices,” he said.

Zimbabwe Commercial Farmers’ Union president Mr Wonder Chabikwa said the country was expecting 48 000 tonnes more than this year leading to a total of 180 000 tonnes by the end of the marketing season compared to last season’s 132 000 tonnes..

“We are expecting 180 000 tonnes from last season’s 132 000 tonnes and our cotton remains of top quality in the region as compared to other countries such as Zambia and Malawi.

“Our only wish is to see farmers being paid well for such a good quality crop considering that they have other obligations to meet,” said Mr Chabikwa.

by Emilia Zindi – Agriculture Editor