Martin Kadzere Senior Business Reporter
PRIVATE cotton merchants found dabbling in side marketing in the forthcoming season will face the full wrath of the law.Agriculture, Mechanisation and Irrigation Development Minister Dr Joseph Made said the Government was deeply concerned over “poor funding” of the crop by the errant merchants and largely blamed them for the decline of investment in the cotton industry.
Dr Made said the Government would ensure relevant agencies, including the police and the Agricultural Marketing Authority would be on the ground to ensure orderly marketing.
“Let me warn errant companies that we will take action against cheating companies,” Dr Made said in an interview last Friday.
“I will put all instruments to protect, not only Cottco, but companies that have fully funded production of the crop . . . not only seed, but a full input package, which includes all fertilisers and chemicals.”
The Government, through Cottco came up with a three-year free input scheme for cotton farmers, which extends into next season to revitalise cotton sector. Already, there are growing concerns that some private companies might have overstated cotton inputs they gave to farmers to obtain buying licenses during selling season.
According to figures obtained from AMA, cotton companies invested about $45 million into cotton production during 2016/17 cropping season. Five companies funded production, with the bulk of the investment coming from Cotton Company of Zimbabwe.
The AMA report, as at March 16, 2017 showed that apart from Cottco, the funding from other companies was mainly seed. This lends credence to claims by most farmers financed by private players in major cotton producing areas that some of the contractors’ level of funding was very low. Most farmers complained that the input packages by some private contractors were insufficient to guarantee a good yield.
According to AMA, Cottco invested $36 million, or 80 percent of the total investment.
Alliance Ginneries and ETG Parrogate spent $3,1 million each, Olam $1,5 million and Grafax $1,4 million. While Government has moved in to revive the cotton industry through a three-year free input support programme, inadequate regulatory enforcement, particularly during the marketing season remains a threat to the sustainable recovery of the sector.
The cotton industry remains at a crossroads due to the rampant illegal purchase of contracted cotton by unscrupulous non-indigenous merchants. Last year, Government financed the crop to the tune of $26 million but only a bought a third of 30 000 tonnes produced.
Dr Made said his ministry would request names of people funded by cotton merchants for validation purposes to determine the level of inputs support by the companies.
“While we are going to expose and take action against cheating companies, it is very important that Cottco must be on the ground, working with our extension officers while AMA on the other should also be on the ground to enforce rules and regulations,” he said.
In terms of the law, AMA will issue buying licenses to merchants based on the investment made. Farmers are expected to produce at least 110 000 tonnes of cotton this year.
Analysts said there is need for a thorough review of the effectiveness of AMA structures in curbing side marketing and capacitation of the regulator to adequately discharge its functions.
“Unless we choose to get serious about effective regulatory control, the recovery of the cotton industry is not sustainable,” said one analyst.
Dr Made said the cotton industry was critical for revival of the economy considering various spin offs from the value chain. He urged farmers to deliver their crop to Cottco, as this would automatically make them eligible for next year’s Presidential Inputs Scheme.