eBusiness Weekly
Martin Kadzere
Zimbabwe is set to introduce a law that severely punishes cotton contractors and farmers engaging in side marketing and any other activities breaching sector’s regulations.
Breaking the law would attract heft fines, even deregistration or suspension of contractors, according to the new proposed regulations seen by Business Weekly.
The new regulations also seek to penalise contractors who fail to provide minimum inputs package per hectare, operating outside designated common buying points or conducting mobile buying, use of a defective weighing scale, growing and marketing of a ratoon crop (plant that regrows from the old root) stock, contracting regulator already contracted by another merchant among others.
Agriculture Minister Dr Anxious Masuka, told the national broadcaster ZBC News last week the regulations will soon be gazetted. He said the regulations were aimed at ensuring orderly marketing of cotton and restoring sanity into the sector.
Side marketing has remained a major challenge in the cotton sector. It takes place when a merchant buys the crop it has not contracted or when a farmer chooses to sell to another merchant.
What usually pushes farmers to side market is that they will be trying to avoid repaying the loans they would have obtained.
Between 2012 and 2014, several cotton contractors left the Zimbabwean market after suffering depressed margins and high levels of contractual obligations by growers.
This led to production falling to a mere 28 000 tonnes in 2014, the lowest yield in nearly two decades and 85 percent decline from peak output of 352 000 tonnes two year earlier.
The cotton marketing season for cotton will begin next Monday and farmers have already pleaded for timely payments of their commodity. During the past two seasons, several cotton farmers were not paid on time after delivering their crop largely due to delays by the Treasury to release funds for subsidy.
The Government pledged to pay support price to encourage production, but left thousands of farmers disgruntled after failing to release the money of time.
“What happened in the past two seasons should be the thing of the past and we hope that farmers will get their money immediately after delivering the crop,” Cotton Producers and Marketers Association chairperson, Steward Mubonderi said in an interview.
“We need to see the sector growing and we do not want a situation which discourages farmers.”
Zimbabwe’s cotton output is expected to decline 30 percent this year to 116 000 tonnes, according to the latest figures from Agritex, but higher than initial estimates after late rains salvaged some of the crops.
The cotton crop suffered two major setbacks—the late-onset of the rainy season and a very long dry spell experienced in most cotton-growing regions during mid-season.
However, unusually heavy rains in March through April undid much of the damage that had been caused by the mid-season dry spell. Initially, the industry had projected that production would drop to 92 000 tonnes.
Zimbabwe’s cotton season runs in two phases: planting between October and January and a harvesting and marketing phase that normally runs from May to September.
The price for the 2022 cotton marketing season was set at $111 per kilogramme for the crop funded by private companies and $63,23 produced under State assisted farming programmes- Pfumvudza/Intwasa and the Presidential Free Inputs Scheme. Farmers will be paid an additional US$30 per bales weighing 250 kilogramme.
