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Government Releases $1.75 Billion As Part Payment To Cotton Farmers

Government Releases $1.75 Billion As Part Payment To Cotton Farmers

The government has released $1.75 billion as part payment to thousands of cotton farmers who were owed a combined $2.5 billion.

Cotton Company of Zimbabwe (Cottco) chief executive officer Pius Manamike told NewsDay Business yesterday that $1.75 billion had been paid in three tranches since the end of last year.

Government paid in three tranches, two tranches of $500 million each and then the third one of $750 million.

The balance is now $750 million and the plan is to have it paid off before the end of this month.

This comes as the government maintains incentives, including payment of an above market price, to encourage the production of cotton across the country.

There have been concerns that late payment to cotton farmers, along with those producing such crops as maize, was contributing to a drop in production levels.

Cotton farmers are mostly paid in Zimbabwe dollars, which has been depreciating fast on both the parallel and official markets.

In many cases, affected farmers have ended up failing to procure inputs to return to production because of the depreciation of the local currency.

Cotton output has declined in the past decade, as farmers switched to other crops, such as tobacco, where they are paid in foreign currency.

Manamike said it was too early to make production estimates for the new season.

However, there have been concerns across the country that a mid-season dry spell that affected other crops could affect cotton output.

Cottco is also mulling introducing micro-ginneries as part of its strategic remodelling, which is expected to see the company investing in oil production and fabric weaving technology.

Cottco is on an expansion drive that will see it transform into one of AfricaÔÇÖs biggest cotton dealers within 10 years.

More: NewsDay Zimbabwe


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2 Comments

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