15 May 2018

Zimbabwe: 10% Export Incentive for Cotton Growers

Photo: The Finacial Gazette
Cotton farming (file photo).

Cotton growers will be paid an export incentive of 10 percent as Government moves to boost production of the crop.

In a statement yesterday Reserve Bank governor, Dr John Mangudya, said farmers will also get $40 cash per each bale sold with the balance being deposited into the grower's account or mobile wallet account.

"In preparation of the impeding cotton marketing season, the Reserve Bank of Zimbabwe wishes to advise cotton growers, cotton merchants and other stakeholders on the financing arrangements for the 2018 season.

"Cotton growers shall be paid an export incentive of 10 percent which shall be paid on a monthly basis through bank accounts or mobile money services.

"In this regard, cotton merchants are asked to submit to the Reserve Bank, the list of growers and their respective account details by the 7th of each month for which the incentive is being claimed," he said.

Dr Mangudya said to promote the use of plastic money, a particular amount shall be paid to the cotton grower for each bale sold.

"In line with international best practices and the need to promote the use of plastic money, cotton growers shall be paid in cash a maximum of $40 per each bale sold, with the balance being deposited in their bank accounts or mobile wallet accounts."

"Seed cotton shall continue to be purchased using offshore lines of credit. In this regard, cotton merchants are required to secure offshore lines of credit prior to purchasing seed cotton.

"For avoidance of doubt, only those cotton merchants who were financed by Government and those who financed cotton production using their own resources shall buy seed cotton," he said.

Cotton is an important crop and farmers require sufficient funding.

It provides raw materials for the textile industry, cooking oil and stock feeds manufacturers.

Cotton production has for the past season been funded under the Presidential Inputs Scheme.

The scheme was meant to go for three years, but cotton growers have appealed to Government to extend it.


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