Indecisiveness grips cotton farmers and ginners over mutual contract farming

Over 16 million people depend in one way or another on cotton. A cross-section of ginners, addressing a TCA meeting in Mwanza last week, said the cotton sector in Tanzania would sink into deeper waters if contract farming is halted. This follows a wide concerted opposition by some ginners, who are not able or willing to meet the costly   demands of contract farming.

TCA Chairperson Mwita Gachuma, said that most ginners support contract farming but some have problems on the way it is implemented. “I believe we will be able to reach a consensus on the best way forward in improving contract farming. It is important for ginners and farmers to speak with one voice for the betterment of the cotton sector,” he said.

A representative of one of the major buyers of the produce, Jagan Gopinath of Olam Tanzania, strongly advised that if the contract farming model for the cotton sector fails, it would be difficult for investors to top up their stakes in the sector. It was apparent that ginners who invested billions of shillings  in contract farming want the concept to go on while those without the means feel that they are being pushed out of business because of the heavy investments required.

“The best way to increase productivity and improve the quality of cotton produced in Tanzania, is contract farming. It enables stakeholders including the government to monitor the entire value chain.  It is the only viable way. I am saying this basing on our experiences in Zambia, Ghana, Mozambique, Zimbabwe, and Ivory Cost,” said Mr Jagan Gopinath, adding that contract farming boosted the revival of cotton sectors in those countries.

Sunday Mtaki, a cotton industry consultant feels that all the gains made in the sector will be reversed if contract farming is halted.  Contract farming is a private-sector transaction that facilitates farmers and ginners into collectively investing in land, labour, credit, high-value inputs, education and technology for mutual benefit. In so doing, ginners provide a platform on which Tanzanians secure a means of production that transforms them into productive cotton farmers.

“Without contract farming, Tanzania’s cotton sector faces immediate peril. Record levels of planted acreage achieved this season will not be repeated, without support from ginners in securing and distributing significant levels of inputs on credit basis. Farmers may not be able to make it, said  the Chief Executive Officer of  Singida based Biosustain Ginnery, Dr Riyaz Haider.

About 17 ginners and four cooperative unions have already invested in contract farming and distributed record quantities of pesticides (3.8 million acre packs) and seeds, nearly 30 thousand tonnes.  The distribution was coordinated by the Cotton Development Trust Fund (CDTF), a private-sector agent facilitating input procurement on behalf of farmers, ginners and the Cotton Board.

The investment supports 1.4 million acres of land devoted to seed cotton production, the meeting revealed.   Despite the achievements, farmers said they still require more inputs. Last year, the same 17 ginners and cooperatives purchased over 80 per cent of the crop but said their ginneries are still under utilised. 

This season, they have signed production contracts with nearly 4,000 farmer business groups comprised of nearly a quarter of a million Tanzanian cotton farmers. By contrast, about 18 ginners who have not invested in contract farming have signed production contracts with 1,000 farmer business groups representing less than 80,000 farmers, distributed a small fraction of seed and pesticides to farmers this season.

Ginners supporting contract farming for cotton want the Government to maintain an enabling environment for investment by upholding the rules of contract farming as stipulated by the Cotton Board. They feel that allowing “free rider” ginners, who have not invested in contract farming, will kill the sector.

Some ginners who are not interested in heavily investing in contract farming want to reap where they did not sow by buying cotton from anyone, encouraging under hand buying from contracted farmers thereby grossly tipping the scale. The meeting, however,  called upon ginners who have not yet invested in contract farming to meet their obligations by the  May 15 licensing deadline set by the Minister of Agriculture, Food Security and Cooperatives and complement the efforts of other ginners in supporting Tanzania’s farmers in growing quality cotton.

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