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Can the cotton sector be saved?

Written by  Yamikani Yapuwa
PRODUCTION UNDERWAY: Factory workers at one of the cotton ginning factories - Pic by Yamikani Yapuwa PRODUCTION UNDERWAY: Factory workers at one of the cotton ginning factories - Pic by Yamikani Yapuwa

Blantyre, February, 18, 2018: For more than two decades, cotton production has been the mainstay of agricultural practice for Dymex Funsani from Maitoni Village, Traditional Authority Chanthunya in Balaka District.

Growing over 13 hectares of the crop, the proceeds have always been inspiring and fruitful because of a vibrant sector that offered many smallholder farmers a fortune.

But over the years, the sector has experienced its worst slump in history forcing some farmers to abandon cotton production.

The challenges range from exorbitant farm inputs like seed, pesticides and fertilisers to poor market prices.

Says Funsani: “Unlike other crops, we cannot easily get cotton seed from agro dealers or seed companies. Even after toiling with production, the returns are not satisfactory because of low prices buyers offer.”

Since 2012, the cotton sector has been performing miserably due to among other reasons, low input usage caused by low accessibility and affordability of inputs.

The impact of the slump in the cotton sector has been telling on the economy.

For instance, the decline in cotton production levels to less than 10, 000 metric tonnes (MT) in the 2016/17 from 100,000 MT in 2011/12 resulted in loss of foreign exchange in excess of US$60 million by government.

It also shrunk economic activities within the sector and reduced employment levels. Furthermore, around 150,000 farmers remain underemployed with a loss of annual of US$26 million.

African Institute for Corporate Citizenship (AICC), a nongovernment organisation which links farmers to various players in agricultural chain of production, released position paper in September, 2017 titled “Cotton sector at the crossroads in Malawi: a case for government investment in inputs.”

The paper states that despite the cotton sector boasts with 300, 000 smallholder farmers with 250,000 hectares of land for cultivation, production levels of the crop have declined by 90 percent in the past six years.

But Dymex Funsani, as a seasoned farmer, is yet to give up on cotton production. He is hopeful that the sector can recover if government and all stakeholders can find a system or model of making the input supply work for all parties involved.

Chairperson for Cotton Farmers Association (COFA) for Chikwawa Fanny Chapotoka agrees with Funsani saying “only a sustainable system of supplying inputs to farmers can yield results and revamp cotton production in the country.”

Equally affected with low production of have been cotton ginners and crushers with most of them closing down their companies.

Out of the 12 ginners the country had in the past years, only three with the relatively new Malawi Cotton Company, a subsidiary for China Africa Cotton Development Limited, as one of them.

Deputy general manager China Africa Cotton Development Shi Jingran says it is frustrating to see the industry suffocating due to government’s reduced support and investment towards cotton production.
Jingran says the company is trying to reverse the trend by providing inputs to farmers.

“Most farmers withdrew from producing cotton because they could not afford farm inputs,” he says.

In the past two decades, government and other players in the sector, have piloted a number of input supply models such as ADMARC Model (1990-2000), Cotton Development Assistance Model (2003-2005), Cotton Production Up-Scaling Model (2011-2014) and Contract Farming Model (2014-2015) just to address the challenge of input supply among farmers in the country with little success.

Cotton Council of Malawi (CCM) executive director, Cosmas Luwanda, faults the failure of the models to farmers defaulting payment of loans to players who supplied them with inputs.

“Government, ginners and others have tried to give farmers inputs. But sadly, most farmers defaulted by selling to new buyers who did not invest through provision of inputs.

“These buyers offered higher prices to the joy of farmers but at the expense of ginners who invested in farmers in anticipation of a return on their investment in the next growing season,” Luwanda says.

He adds that as it stands, no private company or ginner can risk their money by investing in cotton inputs to farmers with the companies still struggling to settle a MK1.6 billion loan to various banks.

AICC’s chief executive officer Dr Felix Lombe says the organisation is currently lobbying government to inject US$4.8 million into a cotton input fund to stimulate the sector.

“The capital injection is a short-term supply of inputs within three to four years. This is to enable the industry recover,” Lombe says. “We are suggesting a model in which all value chain players can contribute towards the cotton fund for its sustainability.”

Luwanda agrees that this is an opportune time for government to invest in the sector through a Cotton Development Fund taking into consideration that the country now has the council as a regulator.

“The Cotton Act provides for the formation of the cotton fund to be solely responsible for things like the seed supply, pesticides as well as all initiatives that will support the sector,” says Luwanda.

He further observes that the country now has an improved legal framework to empower cotton farmers associations with various mandates including timely collection of loans from farmers.

The ball now is in government’s hand to invest in the cotton industry once more so that Funsani and the other 300,000 cotton farmers manage to help the industry regain its lost glory.

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