The Sunday Mail
The Agricultural Marketing Authority has approved 98 common buying points across Zimbabwe as the cotton marketing season begins, with prices again the bone of contention.
Cotton price wars have begun as farmers are being paid 30 cents per kg. – (Picture by Kudakwashe Hunda)
Cotton production is expected to fall 20 percent from 2013 levels due to poor rainfall and low producer prices that do not encourage farmers to plant the white gold. Production was flat at about 143 000 tonnes in 2013 and 2014.
International lint prices have slumped from US90c in June 2014 to US70c at present.
Locally, there are moves to agree on base prices after the Competition and Tariffs Commission lifted last season’s ban on unions negotiating directly with ginners on behalf of farmers.
Zimbabwe Indigenous Commercial Farmers Union president Mr Wonder Chabikwa said the Commission had lifted that injunction, and there have been meetings between the two sides to map a sustainable way forward.
Zimbabwe Farmers Union president Mr Abdul Nyathi said ginners, two weeks ago, offered US30c per kg as an advance payment to farmers, which was turned down.
“After this advance payment, which is for all the grades, they said they would then pay the difference after the grading as the US30c was meant only to pay the farmers promptly on delivering their crop at the buying points,” said Mr Nyathi.
“We said what is this US30c per kg based on since it is across the board for all grades from A to C? So we cannot really say we met to negotiate prices on behalf of farmers but it is the ginners who approached us and we have refused,” he said.
“We reminded them, the ginners, that even if they funded all the crop grown this season, they had not factored in the buying price in the contract forms.
“We, therefore, agreed that both parties go back to the drawing board and come up with production costs before we agree on the price.”
Cotton Ginners Association director-general Mr Godfrey Buka could not be reached for comment.
Mr Chabika weighed in saying: “We are of the opinion that we negotiate prices for all the grades, so that . . . farmers would know how much they will be owed after selling their crop.”
Growers said they expected nothing less than US$1 per kg.
“Anything below US$1 a kg will be unacceptable. The ginners are at it again as they are used to rob us while they make profits. We understand they contracted us but that does not give them the freedom to pay us peanuts,” charged cotton farmer Mr Aaron Nyamweda.
On the wider problems hurting local cotton production, the ZCFU’s Mr Chabikwa said much of these were spawned by liberalisation that came via the Economic Structural Adjustment Programme and privatisation of marketing.
“Zimbabwe was once cushioned by the Cotton Marketing Board, which – when prices were unstable and low on the international market – would
buy cotton from farmers at the trending low prices and later sold it when prices finally appeared favourable,” he said.
Huge subsidies enjoyed by global cotton producers make Zimbabwe’s white gold uncompetitive as locally there are few support facilities – though the Presidential Well-Wishers Inputs Scheme went some way in assisting by giving qualifying households 10kg of seed and 25kg of fertiliser each last year – while the development of synthetic fibres also threatens viability.
The bulk of Zimbabwe’s cotton lint is sold cheaply to Asian countries, who in turn beneficiate and sell back textiles.
African cotton growers produce about 1,3 million tonnes of cotton lint – 6 percent of global output – but the continent consumes just 1,5 percent of all lint.
In Zimbabwe, cotton production is a source of livelihood for an estimated 250 000 households and remains the country’s second-largest foreign currency earner in agriculture after tobacco.
The white gold is key to livelihoods in areas like Gokwe and Muzarabani where cotton is still king. But overall declines in output mean tens of thousands of families in the local textiles, clothing, and oilseed sectors have been hit hard.
Major contractor Cotton Company of Zimbabwe was last year put under judicial management, while Cargill closed shop.
