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Edgar Vhera
Correspondent
STAKEHOLDERS in the cotton industry are enduring anxious moments as they wait for the Agricultural Marketing Authority (AMA) to announce the date for the opening date of the marketing season amid growing nervousness on the payment modalities.
For now, ginners, farmers and other stakeholders cannot help but hope that the season gets underway on June 1 with their first deliveries to buying points.
Farmers who planted early have since finished harvesting their crop and are ready to deliver to buying points in their areas while those who planted late are still to finish harvesting.
Conflicting reports on cotton pricing modalities are making farmers apprehensive although they are hopeful the final monetary policy position prevails.
Early in January the Government announced a lucrative pre-planting producer price for cotton under Pfumvudza/Intwasa Scheme at $63, 23 per kilogramme while the crop financed under non-Government funded arrangement was $111, 17 per kilogramme.
In February AMA advised all cotton stakeholders that “further to the announced pre-planting producer prices for the 2021/22 agricultural cotton season, the Government had approved a dual payment system whereby US$30 would be paid per 250kg bale delivered with the remainder coming in Zimbabwe dollars.
The Monetary Policy Statement of February 7 also indicated that the financing models for tobacco and cotton required a refinement of the export retention threshold to increase participation by small scale growers and to boost tobacco and cotton production in the country.
Accordingly, the retention threshold for tobacco and cotton growers shall be increased to 75 percent for the forthcoming tobacco and cotton marketing seasons. The funds retained by the growers shall continue to be treated as free funds.
The Exchange Control Directive RX003/2022 dated 10 February 2022 advised that with effect from the 2022 tobacco and cotton marketing seasons, tobacco and cotton growers shall be paid 75 percent of their sale proceeds in foreign currency deposited into their Foreign Currency Accounts and the remaining portion of 25 percent shall be deposited into the grower’s local currency account at the prevailing auction exchange rate.
Cotton Producers and Marketers Association chairman, Mr Stewart Mubonderi highlighted that farmers were ready to deliver their cotton to buying points, but implored cotton companies to ensure the availability of enough picking bags to enable the grading and baling of cotton.
Mr Mubonderi stressed on the importance of ensuring that cash is available at the buying points whether in US or Zimbabwean dollars as some cotton farmers from 2020 and 2021 seasons are still to be paid their dues.
“We are happy as Cottco has assured us that funds will be available for buying since they have made arrangements with their banks and this goes a long way in restoring confidence among cotton farmers”, added Mr Mubonderi.
This season’s cotton production is slightly lower than last season due to drought, however, late rains received in the past week has helped late planted crop in districts such as Chiredzi, Chipinge and Mwenezi, noted Mr Mubonderi.
The Zimbabwe Farmers Union (ZFU) secretary general, Mr Paul Zakariya concurred saying farmers were ready to deliver to their contracted buying points, however there is need for the Government to review the pre-planting prices which have since been eroded by inflation.
There is need for clarity from the Government on the payment modalities in terms of the foreign currency portion and time of payment in order to restore trust from past seasons’ experiences where farmers were paid late with some even still unpaid for now, added Mr Zakariya.
Zimbabwe Commercial Farmers Union (ZCFU) president Dr Shadreck Makombe emphasised trust building as lack of payment and/or delayed payment has resulted in some experienced growers opting out of cotton production.
“Even if farmers are to receive their dues late, there is no consideration for inflation to enable farmers to retool, recapitalise and taking farming as a business,” retorted Dr Makombe.
Online Reporter