Cotton output poised to surge 25% this year


Zimbabwe’s cotton output is poised to increase 25% this year after the government backed out-grower schemes with a legal instrument that has unzipped the cheque books of cotton financiers and strengthened inter-industry linkages.
Statutory Instrument 142 of 2010 provides for the registration of cotton buyers with the Agriculture Marketing Authority and demands that buyers willing to fund contract farming declare their intention to do so.
The legislation has also empowered buyers to prosecute contractors for side marketing, thereby unlocking funding for the 2010/11 cropping season. The Cotton Ginners Association this week reported that its membership has already started procuring inputs for the next season.
Complemented by funding from commercial credit facilities, the revived contract farming is expected to boost production of the crop to 280 million kilogrammes this year from 207 million kilogrammes in 2009.
The government will be setting up a cotton facility from a regional development bank through CBZ Bank, while Agribank is also arranging a similar fund for cotton growers.
But taken against the crop’s peak output of 333 million kilogrammes six years ago, the projected increase in national cotton output still represents a loss of potential output of about 16%.
Cotton is the only crop which increased in output after a structural overhaul of the agricultural sector during and after the 2000-2002 fast-track land reform programme, which gave rise to many smallholder producers.
The results of this control experiment trek back to the funding the sector got through contract farming, a back-ward integration initiative whereby cotton ginners and other buyers of the crop provide inputs to growers under an agreed forward marketing arrangement. However, growers have been side-stepping their financiers to run away from poor prices forced down by forward marketing.
Average lint prices have however increased slightly to about 90 cents per pound from 75 cents per pound at the beginning of the cotton selling season.
Pressured by affected cotton ginners, the government then passed the statutory instrument to forestall diversionary marketing and grant extensive guarantees it had withheld under Statutory Instrument 142 of 2009.
The legislation enabled the cotton growers to receive 100% of their seed and chemical requirements with fertiliser being apportioned on the basis of an agreed minimum package. In some cases, they also received funds for land preparation and labour.
“Expected average production from the package is at least 850 kilogrammes per hectare and the reason why a minimum input package was issued because this was trial year when legislation had just been introduced,” the Cotton Ginners Association said in a statement.