Munyaradzi Musiiwa, Sunday News Reporter
Cotton Company of Zimbabwe (Cottco) is grappling with a $ 3 billion debt to farmers in outstanding payments for the cotton delivered to the country’s largest cotton processing and marketing organisation.
Cottco managing director Mr Pius Manamike said the company initially owed farmers close to $ 4.3 billion and settled $ 1.3 some of which was paid in form of groceries and other basic commodities.
Mr Manamikle said Cottco has engaged Government for a subsidy and/or price support to settle the $ 3 billion before the start of the impending summer cropping season to allow the company to engage more cotton farmers.
Cottco has more than 400 000 farmers across the country.
“We had some challenges that emanated from the producer price that was recently announced. It was a very good price from the farmers’ point of view but on the part of the ginners it was un affordable. To get a kilogramme of lint one needs 2.4 kgs of cotton. The 2.4 kg cost $107 and if converted at the auction rate it gives us US$1.30. this is the cost of buying cotton from farmers. On the foreign market it costs US$1.20. this is a situation in which we are now.
“This is why we are saying we want price support. We are broke this is why you see us failing to pay farmers their money. We have approached Government so that we are to settle our outstanding payments to farmer. We want to start the new season on a fresh page without owing the farmers. We are hopeful that in the next few days Government will be updating us regarding that,” he said.
Mr Manamike said the announced producer prices made most ginners businesses unprofitable and unviable.
“We tried as a company under the circumstances to settle part of the debt. We approached our partners with whom we do business and said some of our farmers use their money to buy basic commodities. We then engaged the farmers to say for those that are willing we can give you groceries on the mean time to cover part of your payment. We then borrowed from these suppliers to give farmers the groceries while we process their payments,” he said.