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The Cotton Conundrum: Side Marketing Temptations vs. Cottco’s Contractual Struggle

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Farmers in Zimbabwe’s cotton industry are grappling with a growing temptation to engage in side marketing, despite the legal framework of Statutory Instrument (SI) 63 of 2011. This regulation mandates binding, volume-based contracts between cotton growers and contractors. However, the promise of higher, immediate cash payments from private buyers—offering up to US$0.45 per kilogram—has left many farmers questioning their loyalty to Cottco, which is offering just US$0.32 per kilogram.

The situation has become more complicated as cotton production is expected to surge by 354 percent, from 13,500 tonnes last season to an estimated 61,289 tonnes in 2024/25, according to the Second Round Crop, Livestock and Fisheries Assessment (CLAFA-2) report. This spike is attributed to favorable rainfall and the timely disbursement of agricultural inputs. However, with such a significant increase in cotton production, price discrepancies and delayed payments have highlighted the ongoing tensions between farmers and Cottco.

Farmers, particularly in Chipinge, have voiced frustration over delayed payments, even as Cottco resumed paying for undelivered seed cotton. “The delayed payments were pushing some growers to consider selling to buyers offering cash on the spot,” one farmer shared. “Some are offering between US$0.40 and US$0.45 per kilogram, while Cottco is paying only US$0.32.”

This practice directly contravenes SI 63 of 2011, which restricts cotton purchases to designated contractors. However, the lack of effective enforcement has allowed side marketing to thrive, with many farmers finding it difficult to resist the allure of immediate cash. The increased price offered by private buyers has become a compelling option for farmers who are in urgent need of liquidity.

Stewart Mubonderi, Chairman of the Cotton Producers and Marketers Association (CPMA), expressed cautious optimism about Cottco’s efforts. “This development is good news for growers, as some merchants were attempting to lure them into side marketing due to delayed payments,” Mubonderi noted. “Cottco paid for its initial seed cotton intake, but funds were exhausted midway, resulting in growers leaving bales at Collection Buying Points (CBPs) without receiving payment.”

The Agricultural Marketing Authority (AMA) has taken steps to curb the rise of side marketing. According to AMA statistics, contractors have been offering prices ranging from US$0.30 to US$0.35 per kilogram, typically payable in foreign currency. AMA Acting CEO Jonathan Mukuruba confirmed that the authority is still assessing CBPs to determine whether the marketing period should be extended. “All bales are vetted at buying points to prevent side marketing,” he stated.

Mukuruba also emphasized that, under current regulations, no bales may be moved from CBPs unless they are fully paid for. He reminded farmers that contractors retain the right of first refusal on any cotton produced beyond the agreed contractual obligations. This, he said, is to ensure compliance with SI 63 and curb illegal practices.

Despite these challenges, Cottco remains optimistic about its prospects for the season. Acting CEO Rockie Mutenha affirmed that deliveries are still ongoing, and the company is confident of reaching its target of 60 million kg of seed cotton. Cottco has funded the cultivation of 109,362 hectares of cotton this season, signaling its commitment to reviving the sector and meeting the increasing demand.

However, the wider issue remains unresolved: how to balance strict regulatory compliance with the practical realities faced by farmers in a volatile economic landscape. While Cottco’s efforts to honor contracts are crucial, the temptation of higher immediate payments from private buyers continues to erode the stability of the industry, posing a challenge to both farmers and regulators alike.

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