Amos Mhodzi (63) has been growing cotton on his piece of land since he was a teenager and over the years he has mastered the art of growing the “white gold”. And when other farmers abandoned the crop in favour of tobacco, Mhodzi brushed off the idea.
“Many people abandoned the crop this year, citing low prices, but I couldn’t because cotton is my life and all assets I have are a result of cotton growing,” said Mhodzi of Hurungwe.
The farmer, just like other seasoned cotton growers, has been “faithful” in growing the crop for many years, but now he is in dilemma because the prices have fallen by at least $0,35per kilogramme.
When NewsDay visited Mudzimu Cotton Depot in Hurungwe indications were most farmers were withholding their crop in anticipation of an increase in prices.
“Farmers are not forthcoming with their crops. Most of them are stocking their crop at home because, surely, the prices are not viable,” said an official at the depot.
The situation was different from tobacco farmers who were splashing cash at every opportunity.
“People do not learn. I invited most of my friends to plant tobacco, but they refused and now they are in a quandary not knowing what to do with the cotton,” said Giles Mukono, clutching his beer bottle.
Cotton bales ready for sale could be seen at most homesteads in Mashonaland West as most farmers remained defiant, refusing to give away their “white gold” away at low prices. Farmers on contract are the worst affected because companies are threatening to attach their properties.
“All my assets are in danger of being attached. The company says if the producer price remains low, they will attach all assets to recover their money. Farmers risk loosing lifetime savings,” said Mhodzi.
Despite high prices that prevailed last year ranging between $0,85 to dollar per kilogramme, a significant drop in international cotton prices as shown by the Cotlook A Index in January, prevented ginners from offering high prices again this season, on the back of reduced consumption from large consumers like China.
The Agriculture and Marketing Authority subsequently announced a producer price of 50 cents per kilogramme of Grade A cotton after weeks of price negotiations between ginners and farmers.
Farmers said they wanted the price to be pegged at least $0,50 per kilogramme of the lowest grade to enable them to break even.
Zimbabwe Farmers’ Union Cotton Producers’ Association national chairman Joseph Gondo said farmers were now being forced to seek private buyers, adding that there was a lot of cotton that was not planted under contract system due to funding that was availed through the Presidential Well-Wishers’ Scheme.
Statistics, however, indicate that contractors funded at least $40 million worth of inputs for cotton which they are entitled to buy from farmers. Moreover, Statutory Instrument 142 of 2009 formulated to regulate the cotton sector, makes it illegal to side-market cotton as the practice almost derailed the industry prior to 2009.
A Seatini Senior Policy Analyst said cotton farming was a big gamble due to the way prices were formulated, highlighting that farmers appear to be bearing both the production and marketing risks instead of the risk being shared equally among ginners and farmers.
Meanwhile, some farmers were demanding payment for last year’s graded crop ahead of this year’s selling season.
Farmer organisations called on ginners to settle payments for cotton which rated from Grade A to C as ginners only paid a flat rate using the price for the lowest grade D valued at $0,85 per kilogramme.
Zimbabwe Farmers’ Union Second vice-president Berean Mukwende said that cotton farmers were disgruntled as non-payment of their money has negatively affected their operations.
He said: “We have talked to ginners and they said they haven’t been able to pay because the price of lint has tumbled, but farmers are not convinced with this explanation.”
Cotton Growers and Marketers’ Association chairperson Morris Mukwe said farmers were now basing hopes of getting their premiums on a meeting scheduled between concerned stakeholders and the Agriculture Marketing Authority.
“We agreed that ginners would produce information on graded cotton, but surprisingly this was not done, so we are going to meet with the Agriculture Marketing Authority to iron out the issue,” said Mukwe.
Output in the Zimbabwe cotton industry rose by 30% to 270 000 tonnes in 2010 from 207 000 in 2009, following the promulgation of Statutory Instrument 142 of 2009, which regulates the sector.
Prior to that, the sector had been losing revenue due to poor grades and side-marketing. Cotton is the second highest foreign currency earner in agriculture after tobacco.