Thanks for cotton price change but . . .

Obert Chifamba
Christmas cookies and happy hearts!

This is how the holiday starts for Christians and holiday makers everywhere but for Zimbabwe’s cotton farmers, Cottco has waved a magic wand by announcing a $0,10 price adjustment coming just before the big day.

This price adjustment will take Cottco’s last season seed cotton price to $0,45 after initially buying the white gold for $0, 35 per kilogramme. And coming just before Christmas, this surely is a gift to the farmers.

Cottco is now the major buyer of cotton after Government intervened to save both the farmers and the cotton industry in the wake of chaotic marketing seasons that saw farmers withholding their

produce at some point to protest poor prices that were as low as $0,30 per kilogramme.

The big question now is: How much impact will this price adjustment make on the farmers’ total earnings given that most of them are small-scale and produce very little for the market yet also expect good prices every season to remain alive?

For those farmers who benefited from the free Government cotton inputs, it was almost a 100 percent subsidy and if they scored high yields of between 1 000 and 2 000kg per hectare, then it means they will reap good profits but the majority of smallholder farmers are scoring between 400 and 650kg or even less per hectare, which means they will not make any profit.

The cost of producing a kilogramme of cotton was estimated at $0,52 at some point, which means that farmers needed prices ranging roughly from $0, 65 onwards to break even.

The model cost of producing a hectare of the white gold is around $500 depending on the individual farmer’s circumstances. Those farmers with improved access to resources may find the $0,10 price adjustment very rewarding while their colleagues that do not enjoy the same privileges will definitely find the going very tough.

Essentially, this means that concerted efforts in both extension and training of farmers are critical if the free inputs from Government are to make cotton farming viable to smallholder farmers who are struggling because of their incapacity to score high yields.

Most of them are in traditional cotton producing areas such as Chiredzi, Chisumbanje, Gokwe and Sanyati to name a few, where the soils and climate are ideal for the crop but are failing to take advantage of that.

The mistake some of them make is to always assume that their soils have adequate nutrients so they just plant and wait for the crop to grow yet they must realise that the soils have been producing for many years and may now need additional nutrients through fertilisers, which they may be failing to procure to add on to what Government would have given them.

For such farmers, even if the price of the white gold was to rise to $1 per kilogramme, they would still remain in the doldrums thanks to low yields.

To those farmers producing cotton commercially, the $0, 10 price adjustment is not profitable because they have a lot of other costs to upset before they can talk of breaking even.

This $0,10 adjustment to be given to farmers this December comes at a time Government has also announced the pre-planting cotton producer price of $0,55 per kilogramme up from the $0,45 paid to growers last year.

This means that the farmers will initially receive $0,45 per kilogramme and then $0,10 will follow as the adjustment price, which is not a bad price. What is critical is that farmers produce big volumes of the crop and also make sure their quality is good and then they can make money. Zimbabwe’s lint is ranked among the best globally so the crop has a lot of potential to raise the economic reality of the farmers significantly.

In Zimbabwe, cotton production is a source of livelihood for around 300 000 households though source of funding for the crop has declined over the years, as contractors have decided to take a backbencher’s role citing rampant side-marketing triggered by poor prices. On the other hand merchants have also shunned investing in the crop because of the unavailability of cheap funding thanks to the spike in interest rates caused by the cash squeeze rattling the market.

But despite all these negatives, cotton has remained the second largest foreign currency earner in the agricultural sector after tobacco and has taken care of the livelihoods of many.

It is, however, sadly ironic that most of the farmers in the small-scale bracket are struggling to reach optimal levels of production for a crop that can easily change the complexion of their livelihoods especially at a time like now when there are numerous efforts to boost their performance by Government and other stakeholders.

Anyway, enough of the grumbling

lest I dampen the festive mood most cotton farmers had slid into thanks to Cottco; what they must remember as they dine and wine during the festive season is that for cotton to adequately take care of their economic concerns, they too must up their agronomic practices to boost yields.

If yields continue on a free fall, as they are currently doing, then even the price adjustments that may come in future will not make any meaning.