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Government has announced a new producer price for cotton that will see Grade A being sold for a minimum 42 US cents per kg and Grade D fetching 33 US cents per kg.
Government arrived at the prices after consulting farmers’ unions, ginneries and contractors.
Acting Agriculture, Mechanisation and Irrigation Development Minister Ignatius Chombo yesterday pegged the minimum prices at 42 US cents for grade A, 39 US cents for grade B, 36 US cents for grade C and 33 US cents for grade D.
Cotton farmers and merchants were deadlocked on the price of cotton this season. Growers have been refusing to sell their crop at 30 US cents per kg saying it was unviable and would push them out of business.
Those in the spinning industry and merchants said they could not go higher as the figure was based on international prices.
Minister Chombo said the new prices were meant to ensure buyers competed for the crop.
"Buyers are, therefore, expected to offer higher prices per grade to compete for growers next season. These prices will be reviewed upwards in line with international prices," he said.
The price adjustments are effective end of this month.
Zimbabwe cotton crop, which is mostly — grown by communal farmers — is usually of high-quality.
Minister Chombo said existing legislation would be amended to accommodate the decision to open up cotton marketing.
"The introduction of competition in the buying of cotton is meant to do away with the evil tendencies of forming cartels in the cotton sector.
"It should, however, be noted that the introduction of additional players should not violate conditions laid out under current contract growing arrangements," he said.
Stakeholders welcomed the prices, saying they were fair.
Zimbabwe Farmers Union President Mr Silas Hungwe said, "There is need to review the prices in line with international prices. Farmers should, however, work hard for high yields."
Zimbabwe Commercial Farmers Union President Mr Wilson Nyabonda added: "However, the Statutory Instrument should be amended to level the playing field and address issues of undersupplying of inputs to farmers by contractors."
Cotton Ginners Association director-general Mr Godfrey Buka said there was need to constantly discuss such issues.
"We have always said we will adjust prices in line with international prices and we would want to make a policy of transparency."
05 June, 2010 by admin