HomeBusiness DigestCotton farmers narrate horror stories …as authorities battle to clear massive debts

Cotton farmers narrate horror stories …as authorities battle to clear massive debts


COTTON farmers struck a pessimistic tone this week, saying they would only believe fresh undertakings by authorities to clear outstanding payments due to them after funds start reflecting in their bank accounts.

In the meantime, several farmers said they would continue to endure extreme poverty stemming from delayed payments stretching as far back as last season.

At the end of 2020, farmers estimated that up to ZW$1,5 billion (about US$18 million) was outstanding, the bulk of it owed by the government, which through the Cotton Company of Zimbabwe (Cottco), controls 90% of the domestic market.

In a trading update on Friday, Cottco said outstanding payments were with regards to a State-funded support price offered by the Treasury to bolster farmers’ capacity.

But these debts may have increased because part of this season’s crop has not been paid for.

The farmers spoke as the government said last week it paid ZW$220 million (US$2,58 million) and US$659 000 to farmers for this season’s deliveries.

This translates to a combined US$3,3 million, which falls short of debts that have pushed farmers to the brink and forced many to abandon the crop.

However, the ZW$1,5 billion includes debts owed by private contractors that also fund cotton production.

Cotton Producers and Marketers Association chairperson Stewart Mubonderi said farmers had lost faith in the government.

“It is true, money has not been paid,” Mubonderi told businessdigest.

“However, Cabinet has said the money is now being paid but we are not sure if it is coming. Since last year government has been making these promises and farmers have lost faith. We hope that this time around (we will receive it) since it was Cabinet, chaired by the President, which made the announcement. Farmers are very unhappy. They will only believe it when funds reflect in their accounts,” Mubonderi said.

When Finance minister Mthuli Ncube presented the 2021 national budget in November, he had promised to clear the debt.

Zimbabwe’s subsector could be on the brink of collapse following a total bloodbath since payment problems escalated a few years ago.

Production fell to an all-time low of 32 000 tonnes in 2016, from 143 000 tonnes in 2014.

The carnage was compounded by unsustainable prices of about US$0,30 per kg, which only changed following a public outcry in 2010.

This year farmers are being paid US$0,85 per kg.

Cottco board chairperson, Sifelani Jabangwe said under the agreements between government, Cottco and the Reserve Bank of Zimbabwe (RBZ), the central bank agreed to release 15% of unsettled payments last week.

“The amount due is going to be paid by government through Treasury since it is the portion, which makes up the cotton support price,” Jabangwe said.

“Everything has been agreed. Names and accounts of farmers with outstanding payments have been submitted to RBZ, which advised it will start making payments. They released the first amount, which is about 15% of the payment. Weekly payments will be expected until the debt is cleared,” he added.

In separate interviews, farmers said they had been forced to accept anything from contractors, including groceries, but they were now at loggerheads with farm workers over delayed wages.

“This year we reduced our hectarage since we did not get money from last season. I delivered four bales last season and was paid for one bale through groceries. Payment for the other three bales is still outstanding,” Darious Mtisi, a farmer from Chipinge said.

“There is no money here this season, and we are still owed money from last season. But we have just been told that the money will now come.”

Mercy Chikowo, another farmer from Chipinge said she was struggling.

“Since last year, they have promised to pay us to no avail. I have five kids in primary and secondary school. They still owe fees from last year. I was hoping to clear the arrears once we receive our payments. I am also yet to settle for labour costs. Things are getting out of hand,” Chikowo said.

In May, government said: “Cabinet noted with concern the continued failure to pay farmers for cotton delivered to Cottco and has decided to institute measures to increase its shareholding in Cottco to at least 51% in tandem with its contribution in the company and apparent support to farmers and the need to spur rural industrialisation. To this effect, government will be paying farmers directly”.

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