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COTTON stakeholders have proposed a minimum level of funding to farmers by cotton merchants to enhance productivity and discourage side marketing of the crop. This follows the realisation that substantial cotton volumes were being lost to some errant merchants paying higher prices since they would have not made any meaningful investment in terms of inputs such as finance, infrastructure and extension services.
There were also concerns that funding for the next season could be significantly lower after some farmers failed to meet their contractual obligations this season.
The proposals were made at a cotton indaba held in Harare on Wednesday. The indaba, organised by the Agriculture and Marketing Authority, brought together ginners, farmer unions, Government officials and several industry stakeholders.
The proposed minimum funding was put at between US$3 million and US$5 million. But it could be difficult for merchants to raise the money due to prevailing liquidity challenges.
It was also proposed that penalties slapped on merchants engaging in side marketing be reviewed upwards to discourage the practice. The establishment of a farmer database was also recommended.
Other issues that came up include incentives for crop quality and value addition.
Meanwhile, Government has expressed concern over the industry’s failure to meet the target of 250 000 tonnes last year. Preliminary figures indicate that the crop could be 145 000 tonnes or 58 percent lower the 2011/2012 production of 347 000 tonnes.
Agriculture, Mechanisation and Irrigation Development secretary Mr Ngoni Masoka urged merchants to make available sustainable funding to farmers.
About 98 percent of cotton is grown under contract schemes. The schemes were introduced when farmers were failing to access finance from banks due to lack of collateral.
“It is incumbent upon all relevant stakeholders in the industry to make a concerted effort to arrest the decline and ensure that cotton production is back on the recovery path,” Mr Masoka added. He said the Government was willing to engage farmers’ unions, ginners and all stakeholders to create a platform for dialogue.
“The Government is prepared to support the cotton and agricultural sector as a whole in order to enhance viability especially among small-scale producers” he said
“So far US$200 000 has been disbursed to the Cotton Research Institute this year, and additional resources are being channelled towards farmer and extension worker training.”
Online Reporter