MANY Zimbabwean cotton farmers may not return to the fields during the 2020/2021 season after payment delays affected preparations, businessdigest can report.
Farmers said they were also paid through groceries, and up to ZW$3 billion (about US$37 million) was still outstanding after delays by merchants.
In June, Cabinet approved a price of ZW$43,94 per kg (about US50 cents) for the 2020/2021 cotton marketing season.
Under the arrangement, farmers were supposed to be paid US$10 for every cotton bale delivered to merchants.
About 38% of the value of a 200kg bale would be paid in cash under the arrangement, with the balance electronically transferred to their bank accounts.
However, the cash crisis that marred the season forced merchants to pay through groceries, according to union leaders.
“Drought, late delivery of inputs to farmers, shortages of pesticides all affected production,” Cotton Producers and Marketers Association national chairperson Stewart Mubonderi told businessdigest this week.
“Non-payment of farmers was another factor. Until today over $3 billion is still outstanding to the farmers. They need it to prepare for the season. We need to come up with a payment system which enables prompt payment of farmers. Morale among farmers is high, they are geared to grow the crop. Groceries and grinding mills, ploughs motivated the majority of farmers. However, some had other plans but they got the money. They are not happy,” he said.
A cotton farmer from Chipinge said he and his counterparts have decided to abandon cotton farming over late payments.
“No one is eager to grow cotton this season because we are still owed our money,” he said.
“We don’t even know when we are going to get it. We felt short changed this past season,” the farmer said.
Announcing the 2021 budget last week, Finance minister Mthuli Ncube assured cotton farmers that they would be paid outstanding fees.
“Farmers are therefore encouraged to open bank accounts, so that the money can be deposited and this process is being facilitated by the government, Reserve Bank, banks and Cottco and will ensure that farmers do not bear the burden of travelling,” he said.
Zimbabwe Commercial Farmers Union president Shadreck Makombe said barter trade had infuriated cotton farmers.
“Issues of concern are arbitrary decisions half-hearted, piecemeal supposed consultations of farmers by contractors and other players hence the payment to farmers through barter. This left farmers enraged. Morale is very low except for a few individuals who were paid ,” Makombe said.
“There is need for all stakeholders to come together for the good of cotton production as a commodity.”
Economist Victor Bhoroma highlighted that it was fundamental for authorities to promote cotton farming viability through promulgating a market determined price.
“Production will plummet due to viability issues on the back of high inflation and low producer prices. Remember 70% of the cotton produced in Zimbabwe is exported while 30% is ginned locally for domestic use, hence low production will also impact local clothing manufacturers,” Bhoroma said.
“There is a need for the government to change policy and allow a market determined price to prevail and restore viability for the hardworking cotton farmers. Additionally, Treasury must issue a waiver to all cotton buying companies registered with AMA not to deduct 10% Withholding Tax from the payments they make to the cotton farmers.”
While final cotton production figures are being consolidated, so far, output for this season stands at 99 668 740 kg.
Government targets 101 000 000 kg in 2020.
Total output was 76 691 000 kg in 2019.
Cotton production in Zimbabwe declined to an all-time low of 32 000 tonnes in 2016, from 84 000 tonnes in 2015, and 143 000 tonnes in 2014, after a decade-long spell of perceived lower prices averaging US$0,30 per kg.
From 2015, the government moved to start sponsoring a free-inputs scheme to boost cotton production through Cottco, which has seen nearly 400 000 farmers constituting 90% of total cotton farmers benefit from the inputs.
The remainder is grown under contract farming through companies like Southern Cotton, Alliance and Zimbabwe Cotton Consortium, among others.