Online Reporter
Edgar Vhera
Agriculture Specialist Writer
THE Agricultural Marketing Authority (AMA) is advocating the establishment of a price stabilisation fund to cushion cotton farmers from the international market price volatilities, as marketing of seed cotton starts on June 1.
This was said by acting AMA chief executive officer, Mr Jonathan Mukuruba, yesterday during the launch of the 2024/25 cotton marketing season.
“As Zimbabwe, we are price takers on the international market and we bear the burden of low international prices this year.
“Given the vagaries in international lint prices, as an Authority, we therefore advocate for the establishment of a price stabilisation fund to protect our farmers from such price volatilities,” he said.
A price stabilisation fund is any form of mechanism that the Government can use to mitigate price volatility of essential commodities like agricultural products to prevent sharp price increases or decreases, which can have substantial economic and social consequences.
As a result of the decline in international lint prices and to help farmers, AMA said that seed cotton will be bought 100 percent in foreign currency (US$) to maintain the time value of money.
All cotton contractors are instructed that no seed cotton bale will depart the common buying point (CBP) unless fully paid in terms of the grade D price of US$0,30 per kilogramme.
“The season will run for one month from June 1 to July 15, 2025, and 697 CBPs have been established countrywide, comprising 221 permanent and 476 mobile points.
“Buying is strictly at AMA designated buying points using the AMA database and all contractors are to deploy appropriate payment channels within reach of the farmers from their nearest buying point,” he added.
Mr Mukuruba emphasised that merchants will only buy seed cotton once they have finished paying farmers for deliveries made in the last season and when all grade differential prices have been paid.
“The minimum seed cotton prices for the season, which shall be paid in US$ are as follows: grade A — US$0.41 per kg, grade B — US$0.37 per kg, grade C — US$0,34/kg and grade D — US$0,30/kg,” he said.
AMA registered six seed cotton contractors this season with buyers’ licences, only to be issued to those who fulfil the required conditions.
To curb side marketing, AMA has created a database as a mechanism for continuous verification during marketing/delivery of seed cotton.
It will also ensure that woolpacks are issued to farmers via the database and by their respective contractors, use seed cotton intake analysis and dispatch reports, CBP registers and other measures such as invoking all penalties as per regulations, conducting random blitzes, as well as publishing, naming and shaming all violators.
AMA shed more light on the issue of free cotton, saying that for this season, the Authority does not have any free farmers in its database as no one registered with them as a free farmer by December 31, 2024, as required by the statutes.
“Further, no proof of input purchase was provided by any grower and should any free cotton exist in the country, such should be examined and a report produced by March 31 and no such report materialised this year.
“Additionally, for any cotton that may be beyond contractual obligations, the contractor generally has a right of first refusal to buy such a crop,” Mr Mukuruba explained.
Statutory Instrument (SI) 63 of 2011 states that growers and contractors shall by mutual agreement, enter into a volume-based contract, which shall be binding; that is, the contract seed cotton shall not be purchased by any person other than the contractor to whom the grower concerned is contracted.
Free cotton is defined as seed cotton that is grown by a farmer without contractual obligations or above contractual obligations agreed between the grower and the contractor, as confirmed by crop reports done at the end of March of each year.
“However, self-financed farmers, proven beyond any reasonable doubt, are at liberty to sell to any registered buyer of their choice, including Zimbabwe Mercantile Exchange (ZMX)”, he added.
The second-round crop, livestock and fisheries assessment (CLAFA-2) 2024/25 report estimates that cotton production will be 61 289 tonnes, an increase from last year’s El Nino drought-impacted 13 500 tonnes.
