Cottco seeks $800m to clear farmers’ debts

16 Jan, 2022 - 00:01 0 Views
Cottco seeks $800m to clear farmers’ debts

The Sunday Mail

Business Reporter

Cotton Company of Zimbabwe (Cottco) says it will mobilise $800 million to clear outstanding debts to cotton farmers after the Government settled the unpaid portion of the 2020 subsidy.

The nearly $1 billion Cottco needs to clear arrears includes unpaid amounts for deliveries in the 2019/2020 and the 2020/2021 season.

Cotton is a key source of income for tens of thousands of rural farmers across the country.

The company once tried to give farmers groceries in lieu of  payments. The intervention, however, did not find favour with many farmers. It managed to pay farmers $3 billion from funding raised last year.

In order to ensure that cotton farming remains viable, the Government generously committed an additional $22 per kg delivered by farmers in 2021 as a subsidy.

“The total subsidy for 2021 is $2,5 billion and $500 million was released and paid to farmers during the third quarter ended 31 December 2021,” said the acting company secretary, Ms Jacqueline Dube.

“The balance is anticipated shortly from the Treasury.”

Power shortages delayed the ginning schedule, according to the company, which negatively impacted resource mobilisation, as this affected the turnaround for exports.

Notably, this comes as 93 percent of the seed cotton intake had been ginned by December 31, 2021, with production now set to end in January 2022.

“Zimbabwean hand-picked cotton is in high demand and the company’s order book exceeds production volumes.”

The country’s cotton deliveries increased by 39 percent to 114 656 tonnes as the country approached the end of the buying season of 2021, up from 82 479 tonnes in 2020.

Ms Dube said the late onset of rains had resulted in a sizeable crop being planted one to two months later than normal.

“Depending on the length of the season and available heat units, this could affect the maturity and fibre length of the output,” she said.

Cottco’s ground staff is working with farmers to achieve the best possible results under the circumstances,” she said.

“The adoption of precision agriculture under the Cotton Pfumvudza/Intwasa programme is also expected to improve the outlook.”

Cotton production in Zimbabwe has registered significant growth since 2015, when lack of input support and frustration caused farmers to abandon the crop, but the Presidential Free Inputs Programme has managed to turn around fortunes of the sector.

In 2015, deliveries plunged to 28 000 tonnes from a peak of 351 000t in 2011, but the Presidential Free Inputs Scheme has seen gradual increase in output, which reached 142 000t in 2018.

Ms Dube added that the company was reviewing projects for value addition and increased use of technology in its processes to enhance operational efficiencies.

Cottco is reviewing projects for value addition and increased use of technology in its processes to enhance operational efficiencies, said the company in its outlook.

It is the largest cotton producing company in the country, with an 80 percent market share.

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