Cot­ton pro­duc­tion hits 16 mil­lion kgs

Chronicle (Zimbabwe) - - Business Chronicle - Busi­ness Re­porter

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 li­censed 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 side­mar­ket­ing.

Ac­cord­ing to some an­a­lysts, there is a 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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