- Published on Thursday, 03 May 2012 05:55
- Written by FARAJA MGWABATI
- Hits: 923
THE government has given cotton trading firms two weeks to pay the Cotton Development Trust Fund (CDTF) or face revocation of their licences.
The Minister for Agriculture, Food Security and Co-operatives, Prof Jumanne Maghembe, gave the order on Wednesday after it was revealed that some firms which were given inputs on credit failed to repay CDTF. Prof Maghembe said failure to repay the Fund will jeopardise the contract farming arrangement, which is of crucial importance for development of the sector.
He was speaking during a Cotton Development Workshop organised by Tanzania Gatsby Trust held in Dar es Salaam Wednesday. “I want them to honour their commitment by May 15 or the government will revoke their licences,” he said adding that “if one is ready to play a game he or she must observe its rules.”
The Tanzania Cotton Board (TCB) Managing Director, Mr Marco Mtunga, said CDTF borrowed inputs worth 8bn/- and supplied them to the companies so that they could supply to farmers. “Some of them have sold the inputs to farmers but have not refunded the money to CDTF. This delay will affect the Fund because they will have to pay 20 per cent interest on the loan,” Mr Mtunga said.
He also said the delay will discourage the lenders of inputs and that would adversely affect the next cotton farming season. Mr Mtunga said TCB had written to all 40 companies informing them that the last date to repay was on March 31, but only 13 companies adhered to the call.
Mr Mtunga said 311,000 cotton growers out of 500,000, about 62 per cent have signed contracts with ginners through
5,565 farmer business groups. He said 35 firms out of 40 are in contract farming and 17 have already invested by paying for the inputs in advance while 18 companies are busy campaigning against that arrangement.
According to the arrangement under contract farming, companies and other stakeholders contributes 50 per cent of the costs of inputs and the government foots the rest.Prof Maghembe reiterated the government’s commitment to promote contract farming as it has proven to be successful and helpful to many farmers.
Mr Mtunga said despite resistance from some ginners, agents, money lenders and cooperatives, contract farming has helped to boost production. He named the benefits of contract farming as increased yields through inputs support, extension services, improved quality, more transparency at buying posts and empowering growers to manage their own affairs as well as higher level of mechanisation.