"Zimbabwe’s cotton industry sees red as cotton production has hit all time low with estimated output falling below 30 000 tons this year. This has been the lowest yield since 1992, after the country faced serious drought. Yields will be significantly lower than 102 000 tons achieved during prior season and 352 000 tonnes, a record output achieved four seasons ago. It has prompted experts to be sceptical about the sector’s future sustainability."

Zimbabwe’s cotton industry sees red as cotton production has hit all time low with estimated output falling below 30 000 tons this year. This has been the lowest yield since 1992, after the country faced serious drought. Yields will be significantly lower than 102 000 tons achieved during prior season and 352 000 tonnes, a record output achieved four seasons ago. It has prompted experts to be sceptical about the sector’s future sustainability.

Once one of the top producer’s of cotton globally has now gone down with production level up to 10 per cent of normal volume. Experts believe, opening up the cotton sector to new players was the death knell for Zimbabwean cotton. Zimbabwe’s cotton sector was built around the Cottco inputs credit scheme, which started in 1992 and ensured that farmers received adequate funding, agronomic support and quality incentives resulting in 95 per cent of production coming through contract farming schemes. However, the contract scheme failed due to rampant side-marketing and ineffective government regulations. Hence, cotton production is no longer a profitable option under contract farming. Today, with low yields, side marketing and low inputs support cotton sector is facing dwindling production levels.

Challenges remain despite new policy measures

To infuse life into the sector, a new model for cotton production is almost imperative. Establishment of state controlled monopoly has been one such measure taken up by the government recently. The policy is expected to result in higher yields due to the supply of correct inputs package and agronomical support. Moreover, growth in overall yield is expected to drive viability and improve debt repayment. It will also reinstate seasonal pool price and quality bonus payments,, which will go a long in improving crop quality and sector viability, thereby enabling the country to regain its reputation for top quality.

In spite of correcting measures there are huge challenges for Zimbabwe in terms of international competitiveness due to cotton subsidies. Consequently, the country cannot compete on an equal footing with other global producers. This way, normal market forces cannot achieve competitiveness for the industry. As such, it is imperative that efficiencies are maximised through economies of scale arising from the contracting of a single operator in the mould of the former Cotton Marketing Board (CMB). This instantly resolves the challenge of side-marketing. The creation of a viable investment case enables a virtuous cycle of adequate input packages, improved grower viability, improved debt repayment, higher crop size, improved operational efficiencies and higher investment in the sector.

Subsidy and value addition to boost global rankings

Recently the government gave out free inputs worth $25 and has indicted similar schemes for this year. However, inputs subsidies may not be an effective policy intervention in the absence of a viable pricing incentive for the farmer. The rampant abuse of free inputs has been a major reason of failure for this scheme. In the absence of correct agronomic practices such as the right plant population and adherence to planting deadlines, inputs will not achieve the desired effect of reviving the industry. Processing of cotton into yarn, fabrics and garments represents the core industry for the country in terms of job creation and economic development. There is need, therefore, to craft policies which attract investment into the sector.