New cotton price must be viable in all ends

THE opening of the agricultural marketing season is always punctuated by chaotic scenes — cash shortages, unfaithful merchants and traders who want to reap where they did not sow — and the list of challenges confronted by growers, mainly rural farmers, is endless.

Government, that always wants the farmers to continue farming and prove the land reform programme is a success, usually comes up with prices favourable to farmers, while merchants, normally those that do not fund part of the value chains, want to collect the produce for a song and amass maximum benefits.

The pricing pendulum continues swinging either side, with authorities trying a balancing act to avoid creating some inequalities.

The underlining factor therefore is farmers need protection, but meticulously handled to avoid overprotection that results in some ordinary consumers being exploited, or being forced to pay for some incompetence and inefficiencies along the value chains.

As soon as the marketing season opened, some unscrupulous private cotton merchants and politicians besieged cotton growing areas, providing cash to middlemen to entice the vulnerable farmers to sell the commodity produced under a Government contract scheme at very low prices.

The cotton marketing season opened last week amid reports some private firms are sponsoring local business owners and individuals to buy cotton at between 25c and 30c per kilogramme from hapless farmers mostly in the country’s cotton growing provinces.

This figure is far less than last year’s minimum grade price of 47c per kg, but vulnerable rural farmers desperately looking for cash are selling the crop, the majority of which is funded by Government.

Cotton, although in some areas has been overtaken by tobacco, remains a strategic crop that at some point was referred to as “white gold”, as it was one of the major foreign currency earners that supported nearly 400 000 families.

There is nothing that can stop this crop from being restored and become a major foreign currency earner given that there is a niche market globally that demand organic cotton with strong fibre that is hand-picked compared to a genetically modified one that is also machine harvested and is of poor quality.

Last year, Government availed inputs worth $62 million to support 380 000 cotton growers, bringing the total investment to the sector to about $130 million since 2015. The Government support programme, running for the third consecutive year, is administered by State-owned entity, Cotton Company of Zimbabwe.

Therefore as Government battles headaches associated with every marketing season, the broader picture should be on efforts to reduce costs of production, increase hectarage and boost yields.

Just increasing price of cotton might have a boomerang effect if some mechanisms are not put in place to protect the consumers of products such as cooking oil and many other related products such as cake for cattle.

If some unrealistic producer prices are set, what it means is that the oil processors will be left with no choice, but to pass the burden to the consumers. If Government moves to manage the prices, the country might be hit by a shortage of cooking oil.

Therefore as the authorities deliberate on the new prices and to keep our farmers in business, it should be mindful of the latent consequences it might also have on the other side of the market.

President Mnangagwa has declared the country’s economic future will be anchored on mining and agriculture and therefore that demand more support to the agriculture sector so that most of the crops are produced in abundance.

Government will from this season include oilseed crops under Command Agriculture and as part of strategies to boost production and ensure the processing industry has adequate raw materials to boost production capacity.

Government should continue supporting the agriculture sector until a time when farmers will be able to fund themselves and cut deals with the agriculture banks. In the process the sector will create thousands of jobs directly and indirectly and earn the country millions in foreign currency.