Tanzanian cotton industry facing number of challenges

03 Oct '12

4 min read

Hon. Dr Festus B. Limbu (MP), Chairman - Board of Directors of the Tanzania Cotton Board (TCB) presents the Annual Performance Report for the financial year ended 30th June, 2011.

In brief, the report provides an assessment on the operational performance for the year, challenges facing the Board and suggestions on the ways to be employed to make the operations more effective in achieving the intended mission.

Year 2010/11 recorded an upturn in the prices of cotton in the world market after the global financial and economic crisis that started in late 2008, which had major effect to America and EU countries economies.

After the developing cotton producing countries like Tanzania suffering from the effects of the economic crisis in the previous season after which the Government of Tanzania has to intervene with the rescue package which facilitated TCB to receive Cotton Price subsidy to the tune of TZS 20 billion to assist farmers for the low cotton prices as a result of the impact caused by the global financial crisis.

This season indicative farm gate prices was Tshs 600 but the prices continued to go up during the season jumping up to 800 and 1200 per kilo of seed cotton in some areas at the end of the marketing season.

This season recorded low production as they managed only to collect 163,517 tons of seed cotton compared to 267,004 recorded in the previous season this has a bearing from the low prices recorded in the previous season as most of them producers lost interest in putting much efforts in cotton production which made only 882,540 acres put into cultivation of cotton compared to 1,011,035 acres cultivated during 2009/10 season

During the period under review, the operations of the Board (TCB) were financed by way of Government subsidy TZS 1,188,655,654 and internal sources of TZS 1,059,530,881 (which included rental income TZS 630,973,778 from investment property, regulatory income TZS 61,592,272 and other income TZS 366,964,831 from other operational activities) making a total of TZS 2,248,186,535 whereas total operating expenditure was TZS 2,634,980,532, thus leaving a net loss of TZS 386,793,997. As usual the developmental and promotional activities continued to be financed by voluntary contributions from cotton stakeholders as per Public Private Partnership Agreement of 2006 under the Cotton Development Trust Fund.

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