Treasury has released an additional $750 million towards settling outstanding dues to farmers for last year’s season, taking the total now paid to farmers to $1,75 billion with just $750 million, which is expected by month-end, left to pay.
Cottco could not pay for much of the cotton delivered last season and the Government made a commitment to settle the outstanding payments.
Cottco managing director, Mr Pious Manamike, on Monday confirmed that Treasury had released the funds two weeks ago and farmers had received their money.
“We received $750 million recently to bring the total amount released so far to $1,75 billion and we still need $750 million to clear the outstanding payments for 2021,” he said.
“We expect to receive more money and we hope by end of March we would have paid all farmers their money.”
Cotton growers had been expressing concern over delays in payments which they said was eroding their profits.
The farmers argued that the outstanding payments can lose buying power and did not reflect the true value that it would have had at the time the farmers’ cotton was collected by the buying contractor.
Cotton Producers and Markets Association of Zimbabwe president, Mr Stewart Mubonderi, confirmed that farmers had received their payments.
“Some farmers have received their money while others are still to get their payments,” he said. “We hope the outstanding payments will be made soon so farmers can get the value from their money.
“Meanwhile, farmers have continued to tend to their crop. The condition of cotton in most areas has improved due to the recent rains. Farmers should continue checking on pests and spraying.”
The Cotton Council of Zimbabwe said the Government had demonstrated its resolve and determination to ensure that cotton farmers’ concerns were taken care of by releasing a further payment towards clearing Cottco’s debt to farmers.
“There should be transparency and accountability in how those funds are disbursed and used so that such a situation does not arise again,” said the council’s chief executive, Mr Chris Murove.
Cotton is a strategic crop that is interwoven into the rural economy and indeed, the national economy, as it is a cash crop for farmers, particularly those in drought-prone areas.
The crop provides lint for downstream textile industries and generates export earnings, while the cotton seed is used to extract edible oils for human consumption with the seed residue used in animal feeds.
Production of cotton can transform rural communities through the major cash crop and having huge benefits to the economy at large as a major source of cooking oil for local consumption and cotton fibre for export markets.
The intervention by the Government on cotton production through the Presidential Inputs Support Scheme was meant to revive the sector, which was collapsing due to low prices offered by merchants and other problems related to inputs.
Some farmers in cotton-growing areas had abandoned the crop after prices fell and merchants had reduced input packages citing side-marketing by farmers, further affecting production.
Source: The Herald