Maravi

Consultative forum regrets lack of cotton industry regulatory board

Consultative forum regrets lack of cotton industry regulatory board
Written by Fridah Zinyama
Friday, March 06, 2009 6:19:35 PM

THE Agriculture Consultative Forum (ACF) has observed that the absence of an effective regulatory framework (Cotton Board) in the cotton industry is hampering its growth.

In a presentation on effective public private sector coordination in Zambia’s cotton sector to members of parliament in Chisamba, ACF Research project officer Stephen Kabwe said the lack of a regulatory framework was undermining the sector’s growth as there were no rules to control the players in the industry.

“Over the past few years, there has been an increase in ‘side buying’ (buying a crop financed by somebody else) due to the proliferation of companies buying seed cotton,” he said.

Kabwe observed that most of the problems being faced by the cotton sector would be minimised once the cotton board was put in place.

“The cotton sector has slowly been growing and supports over 280,000 households in Zambia, meaning that there are over 2,200,000 people who are directly or indirectly dependent on cotton production,” he said.

Kabwe said the sector earned Zambia between US$ 64 million and US $70 million in 2005/206 in foreign exchange from cotton exports.

“This revenue could be increased if most of the challenges that the sector is experiencing are addressed,” he said.

Kabwe however noted that the unstable exchange rate that the country was experiencing was not good for business as it was increasing production costs.

“And the sharp increase in profits tax on lint exports and also on cotton seed in this year’s budget could further destabilise the industry, especially in absence of a functioning Cotton Board,” Kabwe said. “These factors could reduce the ginners’ ability to offer farmers high seed cotton price. The Cotton industry could further be destabilised due to reduced demand of cotton lint on the international market due to the financial crisis.”

But Kabwe noted that the high reputation on the quality of Zambian cotton lint could help give it an edge on the international market.

Labels: ACF, COTTON, REGULATION

posted by MrK @ 5:57 PM