Cotton companies in Zimbabwe are paying farmers the minimum prices for all cotton they are buying regardless of the quality of product offered. They are paying the minimum price of US0. 85 cents per kilogramme, which is a price for the lowest grade D for cotton lint. Farmers and buyers in Zimbabwe agreed on a maximum price of US1.05/kg for Grade A cotton lint.
The companies are not paying the agreed price at point of sale because they say grading cannot be done in the field and have to pay the minimum price first as the cotton has to be taken to the ginneries for grading.
This scenario is tantamount to robbing the farmer in broad daylight. Why are farmers not trained in grading in order for it to be done at point of sale?
Who will be liable for arbitration if farmers don’t agree with given prices after grading?
What will be the implication of prices falling to the grading process considering that prices on the international market have started falling?
Cotton companies should revisit their strategies as farmers are now thinking of processing their own crop through a value addition process. This may result in these companies being pushed out of business in the future. Farmers may boycott selling their crop if this continues to be the case.
Forward ever with value addition initiatives for increased benefits to the farmers !!!!!!!!