Cotton commission scraps collective price bargaining

 

Bulawayo – The Competition and Tariffs Commission (CTC) has banned cotton producer price collective bargaining to pave way for negotiations between individual growers and merchants, the Agriculture Marketing Authority (AMA) has said.

In the past selling seasons, farmer unions and the Cotton Ginners Association (CGA) would negotiate the producer price on behalf of their members.

The set up has often resulted in price wars between the two parties accusing each other of insincerity. This has resulted in the decline in the production of white gold in the Southern African country.

AMA chief executive officer, Rockie Mutenha, said the new cotton marketing system will be implemented in the current marketing season which started on April 1.

“The Competition and Tariffs Commission has recommended that individual cotton growers and buyers should negotiate for the price suitable to both parties. This year there will be no producer price for cotton as was in the past years,” Mutenha said.

“CTC said there should be no uniform price for cotton but farmers should be paid depending on the quality of their produce and the financing they received. This model will eventually culminate to an auction system.”

Mutenha said AMA will implement the CTC recommendation.

“CTC is an authority like us. They would have done their research, why should we query them,” he said, adding that the issue of negotiating price was happening to other farmers who produce livestock, soya beans and tobacco.

He said AMA was ready to provide market guide to cotton farmers whenever they need it.

“We will always provide market information to farmers so that they will negotiate knowing what is happening.

AMA has since approved 385 Common Buying Points countrywide up from last year’s 320, an indication that the crop size for this year has also increased.

Commenting on the same issue, an agricultural economist, Joyce Chizema, said the new marketing system was likely to disadvantage cotton producers.

“I believe it’s better and easier to work with organised farmers rather than approaching individual farmers. The spirit of unionism is being threatened. I’m afraid the move will create chaos in the sector,” she said.

“Dynamics of cotton marketing are difficult to understand. I wonder how ginners will effectively negotiate with farmers; I foresee a situation where farmers will be reduced to price takers. Farmers are likely to be short changed as the regulator is thinly visible on the ground.”

Others contend that the new marketing model should be given a chance.

“Let’s give it a try and judge it with the results it will produce. Farmers are not children. I urge AMA, the CTC and farmer representative bodies to be on the ground monitoring what is happening,” said Brian Chikozho another agricultural economist.

Last year, the seed cotton marketing season closed with the prices ranging from 48 cents to 61 cents per kilogram. Most ginners paid average prices of 50 cents to 55 cents per kilogram.

The Cotton Ginners Association is targeting to produce 250 000 tonnes of the crop in the current marketing season.

May 2014
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