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CAZ bemoans cotton farmers’ lack of negotiating power

CAZ bemoans cotton farmers’ lack of negotiating power
By Fridah Zinyama
Tue 23 Feb. 2010, 04:01 CAT

LOCAL cotton producers lag behind their peers on the continent in economically benefiting from the product because they lack negotiating power, Cotton Association of Zambia (CAZ) executive director Joseph Nkole has observed.

Nkole said while farmers in other heavy cotton producing countries like in West Africa were flourishing and making a serious dent on rural poverty, Zambian farmers continue to struggle to make serious returns on their investment as they are at the mercy of the ginning companies.

Nkole said it would be difficult for local farmers to raise their business profile and get meaningful margins on their investment as long as they lacked adequate and reliable working finance.

Currently, the cotton producing sector is primarily driven by the private ginners who contract individual farmers to produce the cotton and also set the price of the commodity. Zambia has around 280,000 smallholder farmers, who are engaged in seed cotton production.

“We believe that the cotton industry is very important to Zambia, it creates employment for a lot of people,” he said.

“With the financial assistance of donors, a lot can be done to pay the farmers involved in the sector.”

Nkole said there was a lot that CAZ learnt which had to be taught to its members through the help of the funds the European Union (EU) provided.

The EU through the European Development Fund (EDF) had released about 236,810 Euros to provide technical assistance to the sector.

The funds were released through the Capacity Building for Private Sector Development (CBPSD) under the Ministry of Commerce, Trade and Industry and working with the Ministry of Finance and National Planning, the project was started in 2007 and successfully completed late last year.

“We were able to undertake some study tours to West Africa through where Zambian cotton farmers could learn from the experiences of the largest cotton producing countries in Africa like Burkina Faso and Mali,” he said.

“In these countries, the producers take advantage of their negotiating power to become more involved in the cotton industry, especially on pricing decisions.”

Nkole explained that presently local farmers had a challenge in negotiating selling prices for their produce, a situation which had adversely affected them.

“This is mainly because, farmers are not financially empowered to grow cotton on their own, hence ginning companies coming on the scene to provide inputs for cotton production to farmers,” he said.

“We were also able to organise another study tour of east Africa where CAZ was able to see the more effective use of the Cotton Out-grower Fund like the one operated by the ministry of agriculture.

“From there we learnt the various self financing mechanisms that operate in the region, which we can duplicate in Zambia.”

Nkole said the association had hired an international cotton consultant who helped to update the cotton pricing model earlier developed by the Smallholder Enterprises Marketing Programme (SHEMP).

“This knowledge helped us to negotiate on behalf of farmers with ginning companies on seed cotton prices of 2007/08 season from position of strength,” Nkole said. “We were also able to develop the CAZ negotiation paper for pre-planting prices.”

Zambia’s cotton industry has developed into the largest quasi-formal distribution network with an estimated two million dependents participating in various out-grower schemes.

A lot of people depend directly and indirectly for their incomes and livelihoods on the cotton value chain.

Despite the cotton industry’s great potential to contribute to the national economy, the sector continued to face enormous challenges that needed to be adequately addressed if the sector was to move forward and raise output.

Nkole explained that most of the activities CAZ undertook with the help of the EU were meant to ensure the growth of the domestic cotton industry.

Nkole added that CAZ was able to adequately train farmers on the importance of following communication structures and regular follow-ups with regard to governance, information dissemination and observance of the sanctity of contracts.

“We were also able to train our farmers on best practices and integrated pest management and managed to come up with a simple cost of effective farmer training model,” he said.

“It is imperative that the cotton industry continues to grow as it supports a lot of people in the country and is a source of revenue for government.”

Nkole explained that the CAZ negotiating paper involved updating the cotton pricing model, market trends and cotton input prices for the 2008/09 season.

“The association was able to negotiate with the ginning companies’ issues relating to pre-planting prices and incentives on behalf of the farmers,” he said. “Farmers also learnt the simple gross margin analysis for maize, soya and cotton and have since decided on the crop mix.”

Nkole said the association was also able to finalise the CAZ-Farmer communication concept.

“As CAZ, we noticed that there were no communication structures in place which would easily avail information to farmers,” said Nkole.

“This prompted us to conduct CAZ district membership awareness meetings in the 18 key cotton growing districts of Zambia through the Zambia National Farmers Union/ District Farmers Associations.”

And one of the beneficiary farmers from the training, Stanley Mwiinga, said most farmers in Mumbwa lacked good farming practices, a situation which led to low cotton seed output.

“Previously, we did not have adequate training on how to manage our crops,” Mwiinga said. “We did not consider farming as a business hence did not even keep books to see how much we spent and how much we made from selling our cotton.”

Mwiinga said more support should be given to farmers in order for them to improve their production.

“In the past, I used to practice bad farming methods which contributed to my harvesting a poor crop,” said Mwiinga.

“Now I know how to use chemicals like Folifet which helps to improve the nutritional content of the plant which helps the cotton plant to sustain the number of balls which it produces until the cotton is ready for harvest.”

Another farmer, Kingsley Mapia said most farmers in the district had learnt different farming methods and how to apply weed killing chemicals.

Ernes Kalumbwe, one among the few women involved in cotton production, said it was not only males who produced cotton in Mumbwa.

“Women have learnt to plant different crops like a cash crop, legumes and a cereal,” said Kalumbwe adding that producing a cereal and legume ensured that families had food security while a cash crop was a source of income for the farmers.

Kalumbwe said women in the village had learnt to bake and cook using legumes like soya beans which were making their families healthy.

Some farmers actually suggested that CAZ find some funds to help them set up a revolving fund which would enable them to become self-financing in cotton production.
They contend the situation would help farmers produce their own crop which they would later sale to ginners at a good price.

Labels: CAZ, COTTON, JOSEPH NKOLE

posted by MrK @ 12:50 AM