More cotton growers coming on board

The Government has introduced a number of support programmes to boost the cotton farming sector after years of underinvestment. Over the last two years, the Cotton Company of Zimbabwe (Cottco) has been on a drive to revive its relationship with farmers so that they start to grow cotton again in their numbers. Our Senior Reporter Leroy Dzenga (LD) sat down with the Cottco managing director Pious Manamike (PM) to discuss the company’s gains and challenges faced during the current rebound period.

***

LD: Farmers have over the years lost interest in cotton farming. Is there a strategy to bring back more farmers into producing the white gold?

PM: I will probably put my analysis in two categories.

There is the pre-Presidential Input Scheme period, definitely, we had a serious drop in interest in the farmers who wanted to grow the crop. Around 2015, production slammed to about 28 000 tonnes in terms of national production, down from averages of 200 000 to 250 000 tonnes per annum.

That drop was caused by poor prices that the merchants were paying against high input costs, which were being given on credit and also this was on the back of declining international lead prices.

So, during that period the farmer had the bad end of that bargain.

When the Presidential Input Scheme was introduced by the Government, the purpose was to resuscitate and generate interest by way of providing free inputs.

This meant that at the end of the day, the farmer became viable because they did not carry the burden of paying for the inputs.

So, during that period we saw growth of interest in cotton farming.

I think we will be engaging the farmers to encourage them to produce.

To illustrate the growth, interest has grown from about 155 000 farmers producing the crop to the current 520 000 farmers, when we include the recently launched Pfumvudza/Intwasa Cotton Scheme that was launched by President Mnangagwa in Gokwe.

So, as I speak now the interest is quite huge; what is left is for us to ensure that the farmers produce. This current season is the first year that the Pfumvudza/Intwasa crop has been planted and the interest was quite huge from the farmers.

LD: On the Pfumvudza/Intwasa programme, farmers are of the opinion that although they receive free inputs, the scheme has reduced their hectarage by four-fold. How do you as Cottco react to this concern?

PM: The observation on the face of it is correct, in that the hectarage has been reduced and that is deliberate because when we talk of Pfumvudza/Intwasa, we are now talking of precision agriculture.

So, what is going to happen is that farmers are going to be working on a smaller piece of land, put less effort and get more out of it.

So it is an efficient way of producing cotton.

If I may explain in much more detail, where the farm was being given inputs for a hectare, those inputs are still the same, but they use those inputs on a quarter of a hectare, that’s point number one.

The second aspect is that the other costs that they used to incur like weeding, spraying inputs and so on are now going to be less because they are now applying on a smaller piece of land.

Then the other point is that because it’s now precision agriculture where these farmers used to produce or plant an average 22 000 plants per hectare, they are now going to be producing 33 000 plants per hectare.

So before we talk about any other benefits coming out of that, we are seeing an increase of 50 percent in terms of yield coming out of the increased plant population.

The increased nutrition that is coming out of the extra inputs because if we are cutting the hectarage by four, we are also increasing input per unit by four so there is better nutrition which is going to give us better yield out of that.

Yes, farmers are used to ploughing huge fields, but we are saying that is not the way to go. The future is that you do less and get more.

So this is what we are trying to explain to the farmers, I think they will see for themselves at the end of this season.

LD: We understand Cottco plans to bring on board commercial farmers since currently the bulk of your producers are small-scale farmers. Can you outline if you have made any progress in co-opting large-scale farmers and what you think is the major deterrent stopping these farmers from joining you?

PM: At the moment we have the Presidential Inputs Scheme or the Pfumvudza/Intwasa programme, this is targeted at vulnerable farmers so commercial farmers do not qualify.

However, we are working on a model that will be for commercial farmers, which will be a model where we give those farmers inputs on credit.

Commercial farmers are farmers of means; they can afford to pay back the loans so that is the model we are working on.

We feel once we fine-tune our model, we will be able to roll it out in the 2022/2023 season.

LD: We have an emerging fashion industry where we have young people manufacturing clothes at small and industrial scales. They are importing cloth and other materials they use. What is Cottco doing to bridge this gap between the parastatal and these entrepreneurs?

PM: Firstly, you should acknowledge that our textile industry is down at the moment.

It is an area that we need to focus on as Cottco and as a nation at large; we need to support the textile industry.

From a Cottco point of view, we are committed to ensuring that there are adequate and enough raw materials for the textile industry that should be value-adding our lint into yarn and fabric.

I also point out that the textile industry is an open industry and not a controlled industry so anyone, private or Government institution can produce or value add cotton into yarn and fabric.

As Cottco we are also taking it upon ourselves with the guidance and support of the Government to start value addition along that textiles value chain. So, plans are at an advanced stage to start implementing our first phase of producing yarn and fabric.

Over the next 12 months, we should have taken off, producing and value-adding our lint into yarn and fabric.

LD: Going through Cottco’s third-quarter update, it is said that Cottco paid $3 billion to farmers and it is looking to raise $800 million to clear outstanding payments. Have you secured the funds?

PM: We are negotiating with financial institutions that provide us with working capital we use to buy cotton.

I am sure anytime from now the financial institutions should be able to release funding so that we clear that portion that Cottco still owes to farmers.

Our aim is to ensure that by mid-February we would have cleared whatever we owe farmers.

That also goes with what the Government owes farmers through the subsidy.

We got a commitment from the relevant authority that we will start paying the outstanding amounts at a rate of $500 million per week so that in four weeks we will be done.

The payment of the $2 billion should start from next week.

All these farmers that we are talking about are all contracted by Cottco under the Presidential Input Scheme and Pfumvudza/Intwasa Programme. Last year, there was the price we had committed to pay and also a top-up from the Government paid to the same farmers. So, all in all, there are about 300 000 farmers that we had contracted last year and all of them are due to get that subsidy payment from the Government.

LD: How are power shortages affecting your operations? I understand the ginning process faced some delays towards the end of last year.

PM: Ginning season is June to November, we gin during the dry season.

So, we always try as much as possible to complete ginning during that period.

Cottco ginning capacity at the moment is around 100 000 tonnes, if we are ginning around the clock running three shifts.

However, due to intermittent power challenges which we experienced the past season, we faced serious delays in our ginning programme.

We had to overrun our time, we are still ginning right now and will complete ginning maybe in the next two weeks.

That has necessitated in our planning the need to ensure that we enter into toll ginning arrangements with other ginners.

LD: Any possibilities of pursuing alternatives like green energy within your processes?

PM: We have a plan to put up a solar plant in Muzarabani. It will be our pilot project, as we try to find a solution to power shortages.

Muzarabani is the most affected because it is at the tail-end of the power line, so any disturbance along the line we are always affected.

That is the route we are taking, now we wait for the project to take off, then we go to other depots to do the same.

At the moment we are at the stage of mobilising the funding and we should be able to start even this year.

LD: You are speaking of increased resources being directed towards cotton, how are you dealing with side marketing?

PM: Side marketing has always been there and will continue to be there, maybe on a smaller scale.

The Ministry of Lands, Agriculture, Fisheries, Water and Rural Development has come in to strengthen the fight against side marketing through Statutory Instrument 96 of 2021. It penalises any ginner who buys cotton that they have not contracted.

We saw a bit of enforcement last year when some ginners tried to side market, that cotton was intercepted and corrective action was taken. There are also penalties attached to that, I believe the test cases were done and everyone is now aware that it is not an area to stray into going forward.

LD: In 2015, cotton production fell to 28 000 tonnes. How has the recovery been? How much did the country produce during the 2021/2022 season?

PM: Output has been increasing, as a result of the increased hectarage seen through new farmers who are getting into cotton production.

However, we are critically looking at the yield per hectare which is vital.

We have been testing some hybrid seeds from India and that seed has done well during the trial period and we believe that is the way to go for our farmers.

We need to get them that seed which is yielding probably more than 10 times than the current varieties we are using locally.

So, once our farmers are viable from a yield perspective I think cotton production will become very attractive.

We managed to buy 116 000 tonnes for the season up from 82 400 tonnes from the previous season.

LD: Can you outline the state of Cottco’s plants and machinery?

PM: Our ginneries are now old so we need to replace them.

Most of the ginneries are now almost over 50 years old and those are now functioning at about 60 percent of their installed capacity and they are now inefficient in terms of maintenance as well.

So our plan as Cottco is to replace all those ginneries with modern ginneries.

We are going to do it in a phased approach.

We are going to put smaller or what we call right-sized ginneries in the rural areas at various business centres where we produce cotton, starting off with our transit depots.

The strategy aligns with Government’s policy on devolution.

Once we start putting up such ginneries in such business centres, we are devolving at the same time developing those rural communities to be at par with urban centres.

This is going to be a big project I probably put on an estimate of around US$20 million, so it is going to be a phased approach.

LD: Farmers have often complained about your prices, which they say are far below what they deem fair return. Do you think you are paying farmers fairly?

PM: In terms of pricing, this past season we were paying $85 per kg which at that time was equivalent to US$1. That was the Grade A price, while Grade D was pegged at $56 per kg comprising $34 paid by Cottco and $22 paid by the Government.

When we look at that $56, it was around US 65cents if I remember well.

If you look at these numbers we were way ahead of the regional market.

Some companies in the region are paying between US$25 to 30cents per kg so Zimbabwe is paying more than double what other countries are paying.

I should also highlight the fact that this is courtesy of the Government paying of subsidy over and above what Cottco is paying.

Of every dollar paid to the farmer, Cottco is paying 60 percent and the Government is paying 40 percent.