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The move is expected to end farmers’ reliance on prices set on the global markets and address the price wars that have rocked the industry yearly.
Agriculture, Mechanisation and Irrigation Development Minister Joseph Made yesterday said the country must start processing raw agricultural products for farmers to access fair markets and good prices.
“It is the function of Cabinet to facilitate the resuscitation of the processing industry with a view of saving farmers and our agro-based economy,” he said.
“As it stands, cotton farmers are taking prices that are set internationally and are manipulated by ginners and contractors, who give them inputs whose prices are only announced at the marketing of the crop.”
Government is yet to announce the new cotton price though some ginners are reportedly capitalising on the farmers’ desperation to offer prices ranging between US$0,31 and US$0,35 per kg
Minister Made said Government rejected the notion of international prices used by ginners and contractors to prejudice farmers of revenue when they would have given them inadequate inputs at prices that do not allow farmers to break even after marketing.
“Ginners and merchants have formed a cartel to make sure farmers are perpetually obligated to them through carry-over debts as most of them would have failed to service their debts at once because of poor prices,” he said.
“The farmers have since indicated that they are comfortable taking between US$0,70 and US$1 for a kg of cotton, yet the merchants want to arm-twist them to accept as little as US$0,30 per kg.”
Government, said Minister Made, was moving swiftly to amend the cotton Statutory Instrument and break the cartel.
Cotton has already been declared a controlled product whose price is going to be set by Cabinet.
Minister Made said Cabinet would consider a lot of factors in setting the price for cotton so that every component of the chain was fairly treated.
The Statutory Instrument seeks to make the cotton crop for the 2011/12 season a controlled commodity, effectively giving the State the power to fix the price.
Under the SI106A of 2012, buyers will be required to buy the crop at a price fixed by the Government.
“The SI is not yet in force in terms of the price determination but the farmers have been very open on the prices they consider viable,” said Minister Made.
“I am obligated to the farmers and I will try to establish their costs of production as well as the ginning costs to give all parties a fair deal.”
Minister Made said the resuscitation of the processing industry was critical and as long as that sector remained down, farmers would be forced to take international
prices that do not factor in their costs of production.
For the industry to be revived, he said, it was critical to support it with resources such as modern equipment, finance and reliable sources of energy.
He said that farmers were primary producers and as such were critical and needed to be allowed access to services and inputs at reasonable charges.
Cotton farmers and ginners are locked in an impasse over prices, which has threatened to bring the industry down, with farmers refusing to sell their produce.
Online Reporter