20 May 2014

Tanzania: Strategic Plans to Form Fund Gives Cotton Growers Hope

LONGSTANDING cotton growers' protest across the country for price stabilisation has at last come to an end, after the government announced it was planning to establish a Crop Price Stabilisation Fund to insulate farmers from fluctuations of prices in the world market.

Agriculture, Food Security and Cooperatives Minister, Engineer Christopher Chiza, said the fund, which will start operating during the financial year 2014/15, will start with four crops namely cotton, coffee, cashew nuts and tobacco.

This is a result of many cotton stakeholders meetings, but the most recent cotton stakeholders session in Mara composed all of district commissioners in cotton growing zones, ginning companies, agricultural officers, extension officers, sponsors and TCB, aimed at sharing experiences.

The fund usually operates in such a way that when the world price is high, some of the returns are paid into it while the accumulated revenues are used to bring up prices during years when prices are low.

Eng. Chiza, who was addressing delegates, including district commissioners (DCs) from around the country, at a meeting organised by the Gatsby Foundation Policy on Tanzania cotton industry development, said low prices paid to farmers rendered them unable to make consistent investments to produce sustainable output.

"We must, therefore, do all we can to incentivize farmers to produce more, including securing markets, good prices and making value addition to the crop. And one of the measure to address price volatility is creating a crop price stabilisation fund, which will be operational during 2014/15," he explained.

The minister stressed that the quality of Tanzanian cotton has over the years steadily fallen, noting that this needed immediate action to restore the country's historical performance of producing high quality cotton.

He said the solution was clear in that the sector needed to invest in its framers, providing them with high quality inputs, including improved seeds and a range of reliable pesticides, mechanised land preparation and planting and training on conservation agriculture for preserving and improving soil fertility.

"They need the right incentives to invest year-onyear in the crop and to spend time grading high quality cotton. They need to trust that weighing scales will be accurate so that they do not adulterate the crop," the minister pointed out.

In the effort to address challenges in the sector, a committee commissioned by the government has recommended, among other interventions, contract farming, which encourages the ginner to provide training to the farmer and farmers feel loyalty to the ginner.

"In implementing the contract farming model, there have been a number of challenges, including lack of proper understanding among stakeholders, lack of trust and faithfulness.

Before the statement by Minister Chiza in the meeting among other things, the participants deliberated on the need to carefully review challenges of revision of the contracts to farmers wherein many weaknesses were seen, with the view to improve the model, which seem to hold the solution to the industry's problems," he added.

Cotton is the country's most important export crop, currently being grown by about 400,000 households, with more than two million people directly or indirectly depending on the crop for their livelihoods. In 2012/13, cotton ranked fourth after tobacco, coffee and cashew nuts, contributing 81.4 million US dollars to the national economy.

This development stressed that the cotton sector was critical to achieving poverty alleviation goals. Mr Chiza added that contract farming, which was approved by stakeholders in 2010 and rolled out countrywide in 2011 after three years of planning and piloting, saw a production of 351,151 tons of cotton in the first season, the second highest to be produced in the country.

Very little finance was made available during the following season when farmers had to buy inputs on cash, resulting into reduced production at 246,767 tons. Tanzania Gatsby Trust Founder Lord David Sainsbury said increased cotton production was crucial to Tanzania's goal of alleviating poverty.

He stressed that there was a huge opportunity for increased production of the crop. Mr Sainsbury expressed his appreciation of Engineer Chiza's support of contract farming in Parliament recently. Some MPs said TGT was corrupting regional and district commissioners to support contract farming during the tabling of the ministry's budget.

In his vote of thanks, the Chairman of the Tanzania Cotton Board (TCB), Dr Festus Limbu, dismissed the utterances made in Parliament, saying they were made by people who have vested interests and who have no understanding of the contribution TGT has brought to the country other than he cotton industry.

The criticism by Member of Parliament towards the contract farming has also brought mixed reactions, prompting Butiama District Commissioner (DC), Ms Anjelina Mabula to call on politicians to stop cheap politics for the lives of people.

"Today I am talking as a farmer, who implements Contract Farming. I have 10 hectares on which I ought to implement contract farming to prove challenges always tabled by the politicians from Bariadi West and Maswa West constituencies."

Ms Mabula said that there is no way one can avoid contract farming if they need cotton bumper harvest and high cotton quality to capture the world market. John Mutayoba, a resident of Kahama District, said that introducing crop price buffers fund a lone is helpless if the government cannot control cheating.

The remedy is provision of more education farmers about better cotton quality. "Cotton produce has many challenges. One is the way famers sabotage cotton sub-sector. Given that the product has no value chain, farmers pollute cotton," she said.

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