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at being paid the minimum price of US$0,85 per kilogramme and doubting the promise by merchants to pay them top ups when the crop is graded.

The price under protest is a culmination of protracted negotiations between producers, ginners and other players in the industry who agreed that the lowest grade would sell for US$0,85 per kg while the highest would start from US$1 per kg.

Following the negotiations it was agreed that Grade A seed cotton would attract a price of US$1,05/kg; Grade B US$0,96/kg; Grade C US$0,89/kg and Grade D US0,85/kg.
Presently the merchants are paying farmers the minimum Grade D price of US$0,85/kg and have promised that, depending on the results of grading, they would pay top ups.

Interestingly, regional comparisons of the seed cotton minimum price have shown that Zimbabwe, at US$0,85/kg is faring much better than countries like Malawi and Zambia where seed cotton is selling at US$0,65 per kg and at US$0,50/kg in Mozambique.

Cotton Ginners Association chairman, David Machingaidze yesterday allayed farmers’ fears, saying the minimum price being paid was not the final price as that price would only be ascertained when the crop has been graded.

“Seed cotton in excess of 10 million kg has so far been bought since the marketing season started in April compared to just over 1 million kg over the same period last year.
“We are buying at the D-grade price of US$0,85 per kilogramme but after grading there will be a final price based on the final grade of the seed cotton.

“We have an agreement with farmers providing for the sharing of incremental profits in the event of prices surging. The profits should be shared between the farmers and ginners and the process should be done by November 30 every year,” said Mr Machingaidze.

But farmers are just not comfortable with the arrangement. They want the crop to be graded instantly and not wait for the September 30 deadline by which all grading should have been done.
“It is impossible to grade cotton at the buying points. In fact, even history will tell you that it has never happened.

“In the past, farmers used to wait for three months for payment but we are saying instead of them waiting for such a long period, we pay them the Grade D price, which would then be adjusted depending on the final grade of the seed cotton.

“There is no reason whatsoever for the farmers to panic. In fact, the minimum price protects them from lower prices, as is the case with maize where a minimum price is set every year by the Government. It means farmers should not accept any price below the minimum,” said Machingaidze.

The Zimbabwe Farmers Union urged merchants to grade the seed cotton before paying the farmers.
ZFU director Mr Paul Zakariya said there was need to first grade the cotton before any payments are made. It does not matter if the payments are delayed.

“The ginners must train the farmers on how cotton is graded so that they understand the process too. The farmers do not know how the grading is done and are not sure on the fairness and transparency of the process,” he said.

Agriculture, Mechanisation and Irrigation Development Minister Joseph Made recently urged merchants to listen to the farmers to allow them to get fair deals.
“Cotton is a multi-purpose crop whose value has the capacity to improve the socio-economic situation of most of the smallholder farmers who grow it.

“What we want is for the farmers to get the true value of their produce so that we do not reverse the gains of the agrarian revolution,” he said.
Cotton prices have been falling of late with the current index now at US$1,72 down from US$2,30 as of April 12, 2011. The forward index is at US$1,43 and runs from the month of July onwards.

According to the International Cotton Advisory Committee (ICAC), after seven consecutive months of increase, cotton prices fell in April 2011. The main reason for the slump seems to be a significant slowing in demand especially in the Chinese markets.

High cotton prices, problems of credit access and the fact that cotton yarn prices did not increase as fast as cotton prices and started yielding ground in mid-March, are all affecting mill use.
Global cotton use is expected to reach 25,1 million tonnes in 2010/11 season, almost unchanged from the 2009/10 season. Production is also projected to increase to a record 27,6 million tonnes in the 2011/12 season.

Based on the minimum price of US$0,85/kg and a crop size estimated at 300 000 tonnes, about $270 million is expected to go into the pockets of communal cotton farmers this year.