Cotton farmers have been assured that they will be paid their outstanding dues in full by mid next month for the crop delivered last season, Lands, Agriculture, Fisheries, Water and Rural Resettlement Permanent Secretary Dr John Basera said last week.
Farmers are owed $1,5 billion by Cottco from last year’s deliveries, which were done when the cotton producer price was set at $43,94 (US$1,75) per kg. Cottco has had cash flow problems and the Government has intervened.
Giving oral evidence to the Parliamentary Portfolio Committee on Lands, Agriculture, Fisheries, Water, and Rural Resettlement chaired by Gokwe Nembudziya legislator Cde Justice Mayor Wadyajena, Dr Basera said the Ministry of Finance and Economic Development, together with the Reserve Bank of Zimbabwe, was working out modalities so that money was passed to Cottco so that it pays farmers.
Once the modalities have been finalised, we will pay the farmers by mid-May before the next cotton marketing season begins,”
Dr Basera said it was Cottco that owed farmers and is facing challenges prompting Government intervention to resolve the impasse between it and farmers.
Government has been impressed by the Presidential Inputs Scheme being administered by Cottco, which has revived the cotton industry. Dr Basera said the scheme, coupled with renewed interest from private companies to finance the crop, has seen the cotton sector recording significant recovery.
It has helped to revive production of fibre which had declined on the back of a combination of reasons, including poor funding, inadequate agronomy support and side marketing.
The Presidential Cotton Inputs Scheme, said Dr Basera, has seen a significant increase in the number of farmers taking up production of cotton in areas where the crop had long been abandoned.
Government has since promulgated Statutory Instrument 96 of 2021, making cotton a controlled crop to curb side marketing and ensure all the crop produced under the Presidential Input Contract Farming Scheme is sold to Cottco.
Cottco acting managing director Mr Pious Manamike confirmed that payments to farmers had been a challenge due to a number of reasons.
“At this stage we have not made payments amounting to $1,5 billion to farmers for the crop delivered last year. We still have hurdles to be cleared in terms of operationalisation and raising of the funds,”
For this year’s crop, Mr Manamike said, the price has been pegged at US$0,35c a kg and Cottco is working with CABS and CBZ to obtain funds so that it pays farmers on delivery. Mr Manamike said 98 percent of the cotton was being produced through the Presidential Input Scheme while 2 percent was being contributed through free farming. Over 300 000 farmers were supported under the Presidential Inputs Scheme this year, with over 380 000 tonnes output expected. About 85 percent of output will be exported.
Legislators called for the abolition of a voluntary payment scheme where farmers were paid in the form of groceries, farm implements, productive assets and household goods saying farmers should receive their money in full and spend it in the way they wish.