Desist from setting uniform seed cotton prices: CTC

HARARE - The Competition and Tariff Commission (CTC) has warned the Cotton Ginners Association of Zimbabwe (CGAZ) to forthwith desist from restrictive practices of setting uniform prices for seed cotton bought from cotton farmers.

This comes as cotton farming in the country is under serious threat mainly due to low uptake as farmers are turning to the more rewarding tobacco crop while serious pricing issues continue to discourage them from producing the white gold.

Dumisani Sibanda, CTC’s chairman last week ordered CGAZ to individually negotiate seed cotton prices with their contracted farmers instead of imposing uniform prices.

“CGAZ should desist from recommending prices for inputs and cotton seed given to contracted farmers and prices of seed cotton offered to farmers,” he said.

Sibanda’s order was made in terms of section 33 (1) of the Competition Act which provides that CTC’s role includes the prevention and control of restrictive practices, the regulation of mergers, the prevention and control of monopoly situations and the prohibition of unfair trade practices.

He, however, recommended that ginners and farmers negotiate an advance payment at the beginning of the cotton marketing season and that ginners adjust the price of seed cotton after grading it.

“The price adjustments should take into consideration relevant factors including economic value of seed and the international price of lint at the end of the cotton marketing season,” Sibanda said.

In recent years, cotton farmers have opted for other cash crops that have higher returns.

Cotton production in 2013 and 2014 remained stagnant at 143 000 metric tonnes from a high of 350 000 tonnes delivered to ginners in 2012 due to poor technology to fight the boll worm that attacks the crop coupled with depressed international cotton prices of lint also affected the local pricing system.

Agriculture Marketing Authority (Ama)’s chief executive Rockie Mutenha early this year also told Parliament that from the farmers’ perspective, it is the price that ginners were offering that was discouraging them from growing cotton while from the contractors and ginners’ point of view, it is the international prices of lint which year-by-year is going down that is affecting cotton pricing.

“On our part, we have been working closely with Agritex extension officers and the Cotton Training Centre researchers to try and improve the yields because our yields are poor, because we do not have quality plant population,” he said.

Comments (2)

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Until these ginners find a sustainable solution,in supporting contract farmers,they will see their extinction approach them slowly but surely. I remember a few years ago,when the white gold seemed an option to farmers in arid areas. Unfortunately their business models are not aimed at long term sustainability and that shall see the decline of this once attractive industry.

LEE - 30 June 2015

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