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Cash barons pounce on cotton farmers

11 May, 2018 - 00:05 0 Views
Cash barons pounce on cotton farmers Cotton farmers, like their tobacco counterparts, will be paid 85 percent in foreign currency

eBusiness Weekly

Private merchants and politicians sponsoring middlemen

Middlemen offering ridiculously low prices

By Martin Kadzere
Unscrupulous private cotton merchants and politicians have besieged some cotton growing areas, providing cash to middlemen to entice vulnerable farmers to sell the commodity produced under a Government contract scheme at very low prices.

An investigation by Business Weekly in Gokwe South, one of Zimbabwe’s largest cotton producing districts, showed that some private firms are sponsoring local business owners and individuals to buy cotton at between 25c and 30c per kilogramme.

This is far less than last year’s minimum grade price of 47c per kg.

The government’s own cotton company has since appealed to the sector’s regulatory authority to stop the practice, which is likely to discourage farmers from growing cotton in the future.

Sixty percent of the government’s cotton growing support scheme went to Gokwe where the private merchants and middlemen are fleecing the farmers with their low prices.

Cotton, which at some point was referred to as ‘white gold’, is one of the country’s major foreign currency earners and supports nearly 400 000 families. The marketing season opened yesterday, but the producer price is yet to be announced.

Last year, the Government availed inputs worth $62 million to support 380 000 cotton growers, bringing the total state investment to the sector to about $130 million since 2015.

The government support programme, running for the third consecutive year, is administered by state – owned entity, The Cotton Company of Zimbabwe Cottco.

The State sponsored programme has helped the revival of cotton production as output increased to 74 000 tonnes last year from 28 000 tonnes recorded two years ago–the lowest yield in more than two decade as famers shunned the crop due poor prices.

During the investigations, Business Weekly, with the assistance of local farmers sold small cotton packs to three buyers who confirmed to have been funded by private firms.

In isolated instances, illegal buyers are buying the commodity with the intention of selling at a higher price to Cottco when the season officially opens. In interviews with some of the middlemen–mostly business people–they confirmed they had been given cash by private players to buy the commodity on their behalf.

Some of the illegal buyers have sub-contracted individuals to also buy on their behalf.

At Masakadza business centre, farmers could be seen delivering cotton packed in small sacks popularly known as “GBs”.

“The issue here is some private companies are taking advantage of desperate farmers who are in desperate need of cash,” said Tonderai Sibanda, one of the local farmers. “So they have disbursed cash to local businesspeople who are buying the crop even before the commencement of the cotton marketing season.”

“The farmers face a lot of challenges. They need to pay fees for their children.

“Because the selling season hasn’t opened yet, the farmers sell their crop to whoever is providing cash even if that violates their contracts,” he said.

A businesswoman claimed one big private company was dishing out cash to buy cotton contracted by the Government.

“We are getting cash to buy on their behalf. After all this is crop contracted by the Government and it belongs to us all.”

“We have the targets and to meet the targets, we have sub-contracted individuals in villages to buy the crop. This has been happening, but this time it has become so widespread. Go into the village and see it for yourself,” she added.

Chasing the culprits

Cottco managing director Pious Manamike, told Business Weekly that the regulator Agriculture Marketing Authority should ensure orderly marketing of cotton.

“We have received the reports and our teams are on the ground to establish what is going on but at the same time we appeal to the regulator make sure order prevails during the season,” said Manamike. “As a major player, we do not condone such actions and we will leave no stone unturned to ensure to recover our crop.”

AMA had not responded to questions send by Business Weekly by the time of going to print.

Villagers who spoke to Business Weekly said the practice had become the order of the day.

“We have two issues here were private companies are buying the crop contracted by Government while some individuals and businesspeople are buying at much lower prices with the intention of selling at a higher price,” said Melody Marwi.

This publication also spoke to some farmers who were delivering their crop to middlemen.

They confirmed that they were contracted by Cottco but were side marketing due to their desperate situations. “Cotton is the major economic activity here in Gokwe and it has been a long time after the previous season,” farmer Getrude Tigere said.

The government is already working on another inputs package for the next season.

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