EDITORIAL COMMENT: Cotton farmers need Govt subsidies

12 Jul, 2018 - 00:07 0 Views
EDITORIAL COMMENT: Cotton farmers need Govt subsidies

The Herald

Government has been investing hundreds of millions of dollars towards the revival of the cotton industry, but there are many disturbing factors that are likely to throw the huge investment down the drain.

In as much as the opening of the agricultural marketing season is punctuated by chaotic scenes — cash shortages, unfaithful merchants and traders who want to reap where they did not sow — the proliferation of second-hand clothes is a cause for concern as it has potential to kill the sector and the entire value chain.

This week there were reports that one of the leading blanket manufacturers, Waverley Blankets, faces collapse in the face of competition from low grade imports, most of them smuggled into the country.

The clothing industry might not take off as more informal traders use the scarce foreign currency to smuggle used clothes that they sell for a song, threatening the viability of formal businesses that are contributing towards national development through taxes.

Government, which has invested a lot to make a success of the land reform programme, usually comes up with prices favourable to farmers, while merchants, especially those that do not fund part of the value chain, want to collect the produce for a song and make maximum benefits.

The pricing pendulum continues swinging, with authorities trying a balancing act to avoid creating inequalities, but the activities of informal traders are threatening to bury the cotton industry for good if not checked.

The underlining logic is that cotton farmers and the sector as a whole need protection, which however, should be done prudently to avoid overprotection that results in consumers being exploited, or being forced to pay for incompetence and inefficiencies along the value chain.

Business is about destroying competition to maximise profits and if the activities of the informal traders are detrimental to the development of the cotton industry in Zimbabwe, then technology could help actors in the formal sector.

Cotton, although in some areas has been overtaken by tobacco, remains a strategic crop that at some point was referred to as “white gold”, as it was one of the major foreign currency earners that supported nearly 400 000 families.

There is nothing that can stop this crop from being restored and become a major foreign currency earner given that there is a niche market globally that demands Zimbabwe’s organic cotton with strong fibre that is hand-picked compared to a genetically modified one that is also machine harvested and is of poor  quality.

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

The Government support programme, running for the third consecutive year, is administered by State-owned entity, Cotton Company of Zimbabwe.

We therefore call upon the authorities to ensure that there is investment in research and development so that the country has cotton varieties that are drought and pest resistant to reduce the overall cost of producing the crop.

There is also nothing wrong in central Government subsidising cotton production since big economies such as America are doing it using facilities such as the American Growth and Opportunity Act that provides assistance to African countries to grow selected crops for the American market.

When this happens, it means the farmers are cushioned from price movements on the global markets and ensures their sustenance and more foreign currency for the country.

No viable agriculture has been recorded the world over without Governments moving in with either loans or concessionary rates or direct subsidies.

We want our farmers not only to produce for the export market, but for the local ginners so that they value add the commodity and earn the country more foreign currency.

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