Interviews
Cotton industry builds hope on contract farming
12 Jan '11
3 min read
The cotton industry stakeholders in Tanzania, in their efforts to save the cotton industry of the country from collapsing have decided to opt for contract farming at the very start of the current cultivation season.
Marco Mtunga, the acting Director General of the Tanzania Cotton Board (TCB) revealed that this decision was taken by the industry stakeholders as back as in May 2010, whereby they resolved to opt for contract farming for entire Western Cotton Growing Area (WCGA) of the country for the 2011-12 season.
He further stated that, as per the decision, under the new model no licence to trade cotton would be provided to the cotton dealers who did not have ginners.
Several issues in cotton production like inferior quality of cotton, less productivity and a low level of mechanization have remained important concerns in Tanzania since long and the same has even discouraged the cotton cultivators and induced them to switch to cultivation of other cash crops like tobacco, he said.
Contract farming is seen to reverse this trend, as it provides the farmers with an assurance for inputs, marketing support and also a steady price and income. This becomes possible because under the contract farming model the ginners are required to make direct payments on delivery.
Further, deviating from the earlier trend, where the cultivators and the ginners used to enter in an agreement only at the time of cultivation, which resulted in inferior and low produce of cotton, the contract farming model is likely to keep the agents away from the cotton trade.
The official said that, the contract farming model would facilitate direct contact of the cotton cultivators with ginners who would work in association with each other right from the stage of ploughing to pricing. The cotton industry stakeholders last year decided that no one other than the ginnery owners should be provided the licence to participate in contract farming, he added.
Due diligence would be carried out for the existing ginners to determine their financial strengths as partial fulfilment to the requirement of providing them licence to engage in cotton trade, the official said.
He informed that, by now around 72 percent of the targeted 50,000 cotton cultivators of WCGA have engaged themselves in contract farming for the 2010-11 season, after a two year pilot study which was undertaken on contract farming in Mara Region.
TCB, intending to safeguard the interests of the cultivators as well as the ginners, would monitor the contract farming in the region.
Marco Mtunga, the acting Director General of the Tanzania Cotton Board (TCB) revealed that this decision was taken by the industry stakeholders as back as in May 2010, whereby they resolved to opt for contract farming for entire Western Cotton Growing Area (WCGA) of the country for the 2011-12 season.
He further stated that, as per the decision, under the new model no licence to trade cotton would be provided to the cotton dealers who did not have ginners.
Several issues in cotton production like inferior quality of cotton, less productivity and a low level of mechanization have remained important concerns in Tanzania since long and the same has even discouraged the cotton cultivators and induced them to switch to cultivation of other cash crops like tobacco, he said.
Contract farming is seen to reverse this trend, as it provides the farmers with an assurance for inputs, marketing support and also a steady price and income. This becomes possible because under the contract farming model the ginners are required to make direct payments on delivery.
Further, deviating from the earlier trend, where the cultivators and the ginners used to enter in an agreement only at the time of cultivation, which resulted in inferior and low produce of cotton, the contract farming model is likely to keep the agents away from the cotton trade.
The official said that, the contract farming model would facilitate direct contact of the cotton cultivators with ginners who would work in association with each other right from the stage of ploughing to pricing. The cotton industry stakeholders last year decided that no one other than the ginnery owners should be provided the licence to participate in contract farming, he added.
Due diligence would be carried out for the existing ginners to determine their financial strengths as partial fulfilment to the requirement of providing them licence to engage in cotton trade, the official said.
He informed that, by now around 72 percent of the targeted 50,000 cotton cultivators of WCGA have engaged themselves in contract farming for the 2010-11 season, after a two year pilot study which was undertaken on contract farming in Mara Region.
TCB, intending to safeguard the interests of the cultivators as well as the ginners, would monitor the contract farming in the region.
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