Minister Joseph Made
Business Reporter
THE Government might consider extending the five percent export incentive to cotton farmers as part of measures to assist improved production of the cash crop, a Cabinet minister has said.
Tobacco farmers are already enjoying the five percent export incentives as the sub-sector continues to be a major foreign currency earner in the economy.
At least 201,9 million kilogrammes of tobacco worth $594 million have been sold since the 2016 marketing season commenced in March this year, surpassing the 190 million kilogramme target that the industry regulator had set, recent reports from the Tobacco Industry Marketing Board indicate.
Agriculture, Mechanisation and Irrigation Development Minister Dr Joseph Made told Parliamentarians on Wednesday that it was possible to extend the export incentive to cotton growers.
He was responding to a question from members on the policy position regarding extending the five percent incentive on cotton production.
“I think the only thing I can do… is to raise the issue with the Minister of Finance and Economic Development (Patrick Chinamasa) and also the RBZ so that we can see the validity of considering that position,” he said.
The Government has scaled up input support for the cotton farmers, with 400 000 households expected to receive free inputs covering a hectare each in this year’s farming season.
This is double last year’s package and could translate to a yield of more than 200 000 tonnes.
“We are expecting good rains this season and we would want to capacitate our farmers,” said Dr Made recently. Last year, farmers received free inputs worth $25 million and the expected potential harvest was 130 000 tonnes.
However, production is expected to be way below the initial estimate as yields were affected by poor rains and late distribution of inputs.
Industry players estimate that production could be as low as 35 000 tonnes, the lowest since 1992 when output declined to record 52 000 tonnes since independence. However, analysts said while the Government should be commended for supporting farmers with free inputs, the appetite for growing cotton remained subdued due to poor prices.
While providing free inputs was critical, it was also important for the Government to come up with a price mechanism that incorporates a pre-planting price and forward sales.
The issue of farm subsidies has been a highly emotive in view of the implications on world trade and political power dynamics. Fundamentally, the richer nations saw it as their right to look after their farmers’ viability while the emerging nations felt that such action was unfair and perpetuated trade structures, which suppressed competitiveness while at the same time perpetuating poverty in least developed countries whose economies are heavily dependent on global commodity prices.