COTTCO Resumes Payments To Cotton Farmers
The Cotton Company of Zimbabwe (COTTCO) says it has resumed payments to farmers after liquidity challenges forced the country’s largest cotton company to stop payments.
COTTCO had stopped payments after it failed to secure money from the banks and this may have resulted in some farmers selling their cotton to other players, a practice known as side-marketing.
Business Weekly reported that the Government, through COTTCO, is the major financier of cotton production in the country and is supporting nearly 300 000 households under the Presidential Free Inputs Scheme. COTTCO chairman Sifelani Jabangwe said:
The Cotton Company of Zimbabwe would like to assure farmers that payments for seed cotton delivered to depots and common buying points are now resuming after engagement with relevant authorities.
The delays were a result of the prevailing liquidity position in the country.
Payments modalities are being refined in partnership with other stakeholders to ensure maximum convenience for farmers.
COTTCO urges farmers to shun side marketing and continue delivering the crop to designated points.
However, some farmers are threatening to withhold their commodity or sell to other merchants due to COTTCO’s failure to pay them.
Jabangwe said nearly 45 000 tonnes of cotton have so far been delivered and the company is still expecting a similar volume.
The national output, including from private merchants is estimated at about 100 000 tonnes.
Cotton farmers, like their tobacco counterparts, will be paid 85 percent in foreign currency and the remainder will be paid in Zimbabwe dollars at the official bank rate.
The lowest grade will fetch US40c per kg while farmers will be paid US46c for the best quality grade (A).
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