White gold gains traction. . . as threat of side-marketing looms

Harmony Agere
Stakeholders in the cotton industry have called upon Government to declare this year’s cotton output a “State resource” after it emerged that unscrupulous buyers are enticing farmers contracted under Cottco into side marketing.

The Government is this year the major funder of cotton production having dispatched about $50 million worth of inputs through Cottco.

However, fears that the crop could end up in the hands of private players at the expense of Cottco have heightened.

This follows revelations that some private contractors might have over stated cotton inputs they gave to farmers in order to obtain buying licenses from the Agricultural Marketing Authority.

Such dodgy buyers are said to be already laying ground work in cotton greenbelts such as Bindura, Shamva, Mt Darwin and Rushinga. And according to analyst Nhamo Muchapondwa, Government risks losing out on the bulk of the cotton due to weak regulation.

“In view of the extent of side marketing in the sector, private sector investment has remained at very low levels. Currently the bulk of the crop is being funded by the Government but as a result of weak legislative enforcement when it comes to marketing, private players end up buying the crop at the expense of the Government. Clearly, this is not a sustainable production model.”

Last season, Government invested $26 million towards cotton production and the bulk of the crop was meant to be purchased by Cottco following its takeover by the State.

Instead, Cottco only purchased about 10 million kgs from the total crop production of 30 million kgs and observers say this should be avoided this year.

Having reached its all-time low of 32 million kgs last year, cotton output is this year expected to hit over 110 million kgs and the increase is likely to trigger parallel marketing.

“The crop will likely be abundant this year and the vultures are already circling,” said a source at one of the distributing points in the country.

“But it boggles the mind that there are those who brazenly want to reap where they did not sow. It is well known that well over 90 percent of cotton was funded by Cottco so it makes sense that the crop should be declared a ‘State resource’ this year.”

Figures at most distribution points show that Cottco is enjoying over 95 percent of the market share based on the value of inputs it disbursed to farmers. And unlike some private companies which are mainly distributing seed only, Cottco has provided a full input package including fertilizers and an assortment of chemicals.

Mr Edworks Mhandu, the managing director of a local cotton seed company, Quton, said only Cottco bought seed from the company this year.

“In terms of the seed, no-one bought from us except Cottco this year. They bought 6 000 tonnes of seed and others who are distributing seed besides Cottco might be distributing last season’s left overs.”

Efforts to get distribution figures from Agricultural Marketing Authority chief executive officer, Mr Rockie Mutenha, were fruitless as he had not yet responded to written questions by the time of going to print.

Zimbabwe Farmers Union executive director, Mr Paul Zakariya, castigated private contractors who are enticing farmers into side marketing, describing their behaviour as unprincipled.

He, however, added that farmers should equally take the blame for selling the crop outside their contractual agreements.

“What we know is that Cottco was this year the major funder of cotton and farmers contracted under the company should take their crop there,” he said.

“It is just a basic business principle that one should honour their contracts. Therefore, it is very bad if there are ginners who are trying to buy the cotton they did not fund.

“Private contractors did not fund any cotton this year but side marketing is a problem which we face every year and we emphasise that parties should honour their contracts. This also applies to the farmers, they should not sell the product to those who did not fund their crop. If they had contracts with Cottco they should take their crop there. We are looking forward to a good harvest this year and it should not be blemished by such dishonesty.”

Zimbabwe Commercial Farmers Union president, Mr Wonder Chabikwa, echoed Mr Zakariya’s sentiments, adding that cotton production improved this year owing to Government intervention.

“We have known for years that cotton production had been in the control of contractors and for years it has continued to dwindle because the prices have not been good for farmers,” he said.

“So it was not working. But luckily Government intervened and this season the crop has received improved funding under Cottco. But we know that there would still be those who are dishonest come harvest time with contractors and farmers trying to buy or sell the crop outside their contract agreements. However, we are still looking to a good harvest even up to hundred million kilogrammes this year.”

Cotton prices for this year are said to have been set at 45 cents per kg and observers say the issue of pricing usually causes side marketing as farmers seek better selling prices.

While Cottco has traditionally offered fair prices over the years, delays in payment in some instances are believed to have driven farmers to private buyers for instant cash.

Cotton farming in Zimbabwe has been declining for almost a decade with output falling below national capacity. This is despite the fact that Zimbabwe is one of the countries with the best climate, soils and experienced farmers for cotton farming on the continent.

Most farmers who had abandoned growing the crop have made a comeback this season following funding from Government.

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  • Fairgame

    Who are the stakeholders referred to here? Ok Govt funded the inputs (ndokusaka iri hurumende yedu); was there a contract with the farmers in place stating exclusive marketing?why would someone’s harvest be forfeited by state? – I will not insult the writer but he/she should be more diligent to address such questions; otherwise this is a malicious article meant to incite politicians to trample on the defenceless farmer through abuse of statutory instruments………