By ORTON KIISHWEKO,:AS the 2011/12 cotton buying kicked off
in the Western Cotton Growing Zones last week, expectations were that the cash
crop producers would pocket at least 300bn/- by the end of the season. There
was news to celebrate about as the farm gate price has almost doubled from
600/- per kilogramme last season to 1,100/- this year.
Cotton producers were reportedly happy with the
newly-announced prices and they are in high spirit to increase production to
benefit from the windfall. But away from much of the public eye, there were two
things that may create more worry for the industry than whether or not the farm
gate price will progress during the season.
First, in February, the country cut its lint cotton forecast
for the 2010-11 marketing season by 40 per cent after bad weather conditions
affected yields. That is if it was probable for the country to produce 54,000
metric tonnes of lint cotton in the season through June compared with a
previous estimate of 90,000 tonnes.
Yet, secondly, UK buyers who have taken a case to Liverpool
Cotton Association (LCA) for arbitration, claiming about 2bn dollars
compensation from local Tanzanian companies for failure to comply with supply
contracts signed last season is not good news to the industry since those are
companies that buy farmers’ produce.
At first the cotton buying companies thought the
multibillion case filed against them in UK would ebb away or be settled
amicably. After all, the failure to supply the crop to British buyers as per
signed contracts, they say, was not of their making. You can blame lack of
rainfall but the companies shockingly realized such a sentiment may not offer
them any reprieve from the UK buyers who have taken their case to Liverpool
Cotton Association (LCA) for arbitration.
The whopping amount may sound abstract to the over 5000
peasant cotton growers who are mainly members of Tanzania Cotton Growers
Association, who after years of involvement in the industry, through back
breaking farming, they have got hardly anything to show for their labour.
Feelings are high that if the 2 billion dollars compensation
by the oversea buyers is granted, it could disintegrate the entire industry in
Tanzania, which has, already been suffering numerous problems and has not
resulted to economic freedom for farmers. Local sellers had entered into
contracts to supply a total of 260,000 tonnes of cotton overseas but missed
target by 38 per cent.
They only managed 162,000 tonnes. Tanzania Cotton Board,
Director General, Marco Mutunga, reportedly confirmed early this year that the
overseas buyers are demanding 2 billion dollars compensation. He said that
failure to honour the contracts was caused by factors beyond the ability of
local exporters, such as bad weather, poor administration of the voucher system
and the global financial crunch in 2008, which pushed down cotton prices and
disrupted domestic production.
Farmers waiting for the government to bail them out may have
to look elsewhere. Ministry of Agriculture, Food Security and Cooperatives
Official, Mr Richard Kasuga, told the ‘Daily News’ that the government had
bailed out cotton companies with 30bn/- during the 2009 global financial
crisis. “We cannot speak of any form of bail out now,” he said hinting that
help for farmers was likely to come from parliament.
Kasulu Urban MP, Mr Moses Machali (NCCR-Mageuzi) indicated
he will table a private motion in Parliament to ask the government to bail out
about 10 ginneries implicated in the saga. The Tanzania Cotton Buyers
Association (TCA) Chairman, Mr Mwita Gachuma, lamented that production last
season was below earlier government estimates.
“All this was beyond our control. Local companies are asking
for amicable settlement with aggrieved parties in the UK in sharing the loss
incurred,” he said. The Chairman of Tanzania Cotton Growers Association, Mr
Lazaro Ndutta, said major factors for last year’s low cotton production
included delayed insecticides and insufficient rainfall.
In Shinyanga Region, prospects have not been good for both
the farmers and buyers last season. For the first time in decades, the cotton
crop has not made a significant impact on crop fields in the region this
season, in what farmers and leaders in the sector attribute to poor flow of
inputs and the marketing systems. Unlike in the past, the season has seen an
imbalanced competition for space on once fully cotton fields in favour of some
of the food crops such as mbaazi (dhaal).
Many cotton farmers in the region were not happy with
returns from cotton and they tried out alternatives as local government leaders
grapple with the irony that while farmers have produced the crop for decades,
there has been no reduction in poverty levels among them. Yet, while farmers
still grapple with inaccess to seeds, pesticides and fertilisers, they are also
cheated by thousands of unscrupulous agents who tamper with weighing scales
when buying their produce.
In interviews, they said frustration is building up among
them with agents who have made deep inroads in rural Shinyanga – a vast and
alluring population of farmers – bringing opportunities but also the risk of
farmers facing dishonest buyers. As a result, in hundreds of villages in the
region some farmers dropped cotton, a crop accounting for 13 per cent of the
national exports, for other smaller but slightly paying crops on grounds that
selling systems are clearers.
Shinyanga Regional Commissioner (RC), Dr Yohana Balile, says
the crop has had a great contribution to the national economy since
independence when there were no factories, yet, those involved in it at
grassroots level still languish in poverty. Tanzania Cotton Buyers Association
and the Tanzania Cotton Growers Association are preoccupied with discussion on
how farmers have engaged in this back breaking activity for decades, yet their
conditions of living have not changed significantly.
The cotton crop needs seeds, weeding, pesticides, pruning
and better methods of harvesting throughout its life on the fields. But many
farmers told the ‘Daily News’ at their fields across six districts in the
region, that cases of failure to even meet initial expenses were abundant. “We
have to confront this reality that grassroots people engaged in cotton growing
have not been able to reduce poverty levels,” said Dr Balile.
“Poverty levels among them is still at 42 per cent. Our hope
has always been that this is the crop to bail out households from poverty. But
like many other programmes, the challenge is how to achieve this,” he added.
Certainly, statistics confirm that not much has changed among the farmers in
the last 20 years. In 1990, over 40 per cent of the people lived in extreme
poverty in the region.
Vision 2025, a government blueprint for bringing better
life, aims at ten per cent in this in the next 15 years. Government figures
show that absolute poverty fell from 38.6 per cent in 1990 to 33.3 per cent in
2007 at national average. The criterion for being above the abject poverty
line, according to Household Budget Surveys, is for an individual to be able to
spend Tsh 641/- or more per day in Dar es Salaam, Tsh 532/- in towns like
Shinyanga urban and Tsh 469/- or more in villages.
International requirements for this puts standards of living
at above one dollar (Tsh 1500) a day. “If farmers and local leaders handle the
crop with the seriousness that it deserves, it can take them out of poverty,”
he said. ”More focus should be on how to make maximum use of the government
subsidy. Their saviour is cotton,” he said.
The recently introduced subsidies, a widely touted effort
introduced in the last two seasons, in which the government has invested
143.8bn/- in the ending financial year alone, have managed to improve returns
of some targeted farmers, especially with food crops, but a good number of them
have not yet benefited because some companies brought the pesticides late, he
added. It now remains to be seen whether the multi billion case at Liverpool
Cotton Association (LCA) may turn around the industry, which is an economic
lifeline of millions in the lake zone.