Tanzania: Future of Cotton Industry Faced With Uncertainty


Mwanza — THE cotton sub-sector, which employs 14 million Tanzanians, about 40 per cent of the country’s population, is on the verge of collapse, unless the government takes swift measures to rescue the situation.

And the government has two choices – either, to let politics reign in the multibillion shilling sector amid flourishing greedy business people or firmly support programmes that envisage empowering the cash crop producers.

Unfortunately, the powerful politicians and some unscrupulous cotton buying companies seem to always frustrate, at all costs, any attempt to rescue peasant famers out of abject poverty.The flopped contract farming in cotton is one living example.

The government, through the support of Gatsby Charitable Foundation, had invested heavily in the introduction of contract farming in the country’s cotton sub-sector, with a view to increase productivity via extensive use of inputs and extension services. The programme, under pilot basis for three years in Mara’s Bunda, Musoma Rural and Serengeti districts, proved great potential in enriching farmers. Convinced of the outcome, the government decided to extend contract farming countrywide in the 2011/2012 farming season.

Unfortunately, contract farming, although highly beneficial to the poor peasants, is not equally friendly to some greedy companies that used to unfairly enrich themselves through the sweat of growers. The programme has proved to be effective in addressing the chronic problem in cotton production and marketing – shortage of farm inputs, unreliable extension services, cheating and cotton contamination – that had for years proved defiant to all proposed solutions.

Through contract farming, producers form Farmers Business Groups (FBGs), associations of between 50 and 60 cotton growers that offer reliable network for execution of the programme. Besides guaranteeing credits to individual farmers, FBGs serve as business entities, contracted by ginners to buy cotton from their members on commission. And that is where problems start. Cotton buying itself is a lucrative, multimillion business by hundreds of agents who hardly know how to grow cotton.

Agents not only earn commission but also steal from farmers through tempering with the weighing machines. Cotton growers have for years been subjected to greedy, ruthless cotton buying agents as the gadget tempering remains a serious problem that impedes efforts of farmers to get out of poverty, with studies showing that agents steal between five and 40 kilogrammes per 89-kilogramme bale through the dirty game.

But, under contract farming, the FBGs who also double as cotton buying agents, earn 30/- per kilogramme of cotton purchased, with some some generating as high as 50m/- annually depending on production level by members. At this point, cheating is curbed. “The fact that we know and have control over the person behind the weighing machine is big incentive to us as far as contract farming is concerned,” says John Nyarega, a 67-year old Mawasiliano FBG member at Issenye.

Some companies are opposed to contract farming because they are reluctant to put money in the programme that requires heavy investments by buyers to support availability of inputs and extension services. Yet, the same companies are strongly campaigning to get licence to buy the cash crop from anyone, a move that industry sources warn that would encourage side buying from contracted farmers and leads high rate of credit defaults.

Sources caution that should the government goes against the principles of contract farming that restrict cotton buyers to areas they had invested,by allowing buyers to reap where they didn’t sow, ginners that supplied inputs on credit would hardly be held accountable for the defaults.

If what transpired at the ninth cotton stakeholders meeting here last Tuesday is anything to go by, contract farming is dead as the meeting bowed to pressure by non-investing buyers and some politicians to allow free ride in buying the cash crop. Agriculture, Food Security and Cooperatives Minister Christopher Chiza described contract farming as a theoretical mechanism to unite and empower cotton producers but warned, experience shows that peasants are always the victims.

He asked stakeholders to review farmers’ education on contract farming, buying companies to invest in farm inputs and extension services as well as the strength of FBGs. The minister literally postponed the execution of the programme, pending review of some critical issues. Asked to comment of the fate of contract farming, the Cotton Development Trust Fund Manager, Mr Essau Mwalukasa, told the ‘Business Standard’ that, “We haven’t repealed contract farming, we are just trying to review it and see how best to address its challenges.”

While the opponents of contract farming might ultimately succeed, the fact will remain: The best strategy to increase productivity, quality of cotton and the welfare of the cash crop growers in Tanzania is through contract farming.

Source: http://allafrica.com/stories/201206120613.html