Govt wary of cotton price fixing

HARARE - Government is wary of setting a cotton producer price due to a lack of funds to purchase the commodity, Agriculture minister Joseph Made said.

“We must be careful when we set the price as government. We may not have the funds to buy, he told Parliament last week.

He added that government was “seriously looking at a situation where if we set a price, we should do so within the confines of the law so that we will be able to have it implemented”.

This comes as Made had earlier said government was considering phasing out cotton contract farming.

He said the system was “never meant to be a permanent mechanism, but a makeshift arrangement to assist farmers”.

“Cotton is not a controlled commodity, but be that as it may, we are worried about the issues concerning the farmers and the buyers in that there is a disagreement on the price of cotton. It is an issue that we are looking into,” he said.

Currently, farmers sell their cotton to contractors who supply them with inputs.

However, farmers say the contractor prices are usually “extortionate” and are way below market averages.

Contractors, who have lost out to black market buyers that entice contracted cotton farmers with better prices, have scaled down funding for cotton in the past few years due to rampant side-marketing.

Recently, the Cotton Producers and Marketers Association of Zimbabwe revealed that farmers agreed to sell the crop at $0,65 and $0,70 per kg for contracted and non-contracted crop respectively this season.

Government cannot set a producer price this season following an order from the Competition and Tariff Commission (CTC) that farmers individually negotiate the buying price.

The CTC ordered that farmers, previously represented by unions, must negotiate the prices on their own.

The crop was bought at a price of $0,35 per kg during the 2013 season although the price later shot up to $0,70 towards the end of the season.

As a result of the uncertainty surrounding the crop’s price farmers have delayed harvesting their crop with some threatening to abandon it in the fields.

Analysts, however,  say there is nothing government can do to control cotton prices because of contract farming. Made also said his ministry was in the process of reviving the Cotton Marketing Board (CMB), which will then oversee cotton trade in the country.

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