Ex­port in­cen­tive ben­e­fit for cot­ton farm­ers

Chronicle (Zimbabwe) - - Business Chronicle - Busi­ness Re­porter

THE Gov­ern­ment might con­sider ex­tend­ing the five per­cent ex­port in­cen­tive to cot­ton farm­ers as part of mea­sures to as­sist im­proved pro­duc­tion of the cash crop, a Cabi­net min­is­ter has said.

To­bacco farm­ers are al­ready en­joy­ing the five per­cent ex­port in­cen­tives as the sub-sector con­tin­ues to be a ma­jor for­eign cur­rency earner in the econ­omy.

At least 201,9 mil­lion kilo­grammes of to­bacco worth $594 mil­lion have been sold since the 2016 mar­ket­ing sea­son com­menced in March this year, sur­pass­ing the 190 mil­lion kilo­gramme tar­get that the in­dus­try reg­u­la­tor had set, re­cent re­ports from the To­bacco In­dus­try Mar­ket­ing Board in­di­cate.

Agriculture, Mech­a­ni­sa­tion and Ir­ri­ga­tion Devel­op­ment Min­is­ter Dr Joseph Made told Par­lia­men­tar­i­ans on Wed­nes­day that it was pos­si­ble to ex­tend the ex­port in­cen­tive to cot­ton grow­ers.

He was re­spond­ing to a ques­tion from mem­bers on the pol­icy po­si­tion re­gard­ing ex­tend­ing the five per­cent in­cen­tive on cot­ton pro­duc­tion.

“I think the only thing I can do... is to raise the issue with the Min­is­ter of Fi­nance and Eco­nomic Devel­op­ment (Pa­trick Chi­na­masa) and also the RBZ so that we can see the va­lid­ity of con­sid­er­ing that po­si­tion,” he said.

The Gov­ern­ment has scaled up in­put sup­port for the cot­ton farm­ers, with 400 000 house­holds ex­pected to re­ceive free in­puts cov­er­ing a hectare each in this year’s farm­ing sea­son.

This is dou­ble last year’s pack­age and could trans­late to a yield of more than 200 000 tonnes.

“We are ex­pect­ing good rains this sea­son and we would want to ca­pac­i­tate our farm­ers,” said Dr Made re­cently. Last year, farm­ers re­ceived free in­puts worth $25 mil­lion and the ex­pected po­ten­tial har­vest was 130 000 tonnes.

How­ever, pro­duc­tion is ex­pected to be way be­low the ini­tial es­ti­mate as yields were af­fected by poor rains and late distribution of in­puts.

In­dus­try play­ers es­ti­mate that pro­duc­tion could be as low as 35 000 tonnes, the low­est since 1992 when out­put de­clined to record 52 000 tonnes since in­de­pen­dence. How­ever, an­a­lysts said while the Gov­ern­ment should be com­mended for sup­port­ing farm­ers with free in­puts, the ap­petite for grow­ing cot­ton re­mained sub­dued due to poor prices. While pro­vid­ing free in­puts was crit­i­cal, it was also im­por­tant for the Gov­ern­ment to come up with a price mech­a­nism that in­cor­po­rates a pre-plant­ing price and for­ward sales. The issue of farm sub­si­dies has been a highly emo­tive in view of the im­pli­ca­tions on world trade and po­lit­i­cal power dy­nam­ics. Fun­da­men­tally, the richer na­tions saw it as their right to look af­ter their farm­ers’ vi­a­bil­ity while the emerg­ing na­tions felt that such action was un­fair and per­pet­u­ated trade struc­tures, which sup­pressed com­pet­i­tive­ness while at the same time per­pet­u­at­ing poverty in least de­vel­oped coun­tries whose economies are heav­ily de­pen­dent on global com­mod­ity prices.

Dr Joseph Made

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