eBusiness Weekly
Martin Kadzere
IT is six months after Chenai Mabanga delivered her cotton crop. But the 51-year old Murabani farmer is yet to receive the full payment of her cotton crop. As she waits in agony for her dues, inflation is wiping off the value of her earnings. She is concerned that upon the full payment, the value of her money will almost be worthless.
“I am a proud cotton farmer and this is the only commercial crop that thrives in our area,” Mabanga, a beneficiary of the Presidential Free Inputs Programme, a scheme aimed at assisting mostly rural farmers told Business Weekly in a recent interview.
“But my appetite (to produce cotton) waning because of recurring late payments. With all that is happening in our economy; what would I do now with the money that I was supposed to get six months ago. Definitely nothing; it is very painful.”
Mabanga is among several farmers who are yet to be paid for last season’s deliveries.
Initially, Government had set the minimum price at $85 per kilogramme, but reviewed it downwards to $56 following an outcry from merchants who argued the producer price was beyond their reach. Of the $56, $22 was to come in the form of a support price from the Government while the merchants were to pay the remainder.
While several cotton merchants fully met its obligations, including the Cotton Company of Zimbabwe (Cottco), which finances almost 85 percent of Zimbabwe’s cotton production, some farmers are yet to receive the subsidy payment.
According to Cottco, the total subsidy for 2021 was $2,5 billion but only 20 percent has been paid to farmers. The company was expecting the balance from the Treasury soon.
“Prices are going up and the money continue loosing value,” Carvin Mazonde said.
While the official exchange rate has remained relatively stable last year, the pricing regime in Zimbabwe is largely linked to black market foreign currency rates now at between $240 and $250 per US$1 against the official exchange rate of $115.
The Government says the delayed payments were partly resulting from failure or reluctance by the farmers to open mobile accounts. However, several farmers, especially those in the countryside, are arguing that mobile payments are inconsiderable given challenges associated with mobile network connectivity.
“Besides, you still need to travel to towns closer to transact and this becomes more expensive,” Andrew Meso, a 51-year-old farmer said. “We have a very big challenge.”
Last year, Cottco came up with an alternative payment scheme, which saw farmers paid in household commodities, building materials and farm implements. This was, however, stopped by the Government to allow farmers to receive their cash as opposed to household goods and farm implements.
“We were very happy with the payment scheme, which saw us paid in the form of farm implements and groceries. “This insulated us from currency depreciation,” said Mazonde.
“The other option is to pay us in hard cash because some of us stay where mobile network connection is a challenge and we forced to go to nearby towns to transact.”
Mazonde added that as a result of the pandemic travel restrictions during the better of the years, many common farmers were stuck with money in their mobile phones.
Economic analysts say the government should come up with a proper pricing mechanism to “remain trusted” by the farmers and ensure sustainable production of cotton.
“Cotton is a major cash crop; it generates a lot of foreign currency and the producers of this commodity needs to be treated with respect,” economist Carlos Tadya said.
After slumping to a record low of 28 000 tonnes in nearly two decades in 2015, cotton production rebounded, thanks to Government intervention through inputs subsidies.
The programme, now running for the seventh year, regenerated massive interest among farmers who had abandoned cotton for other crops citing poor prices and lack of agronomy support from contractors. The Government came up with Presidential Cotton Inputs Scheme meant to support farmers with free inputs such as seed, fertilisers and chemicals. The scheme is different from those previously run by private merchants when farmers were given inputs on commercial basis.
