Zim Joins Cotton Lobby

Source from:  The Herald (Harare) November 20, 2005 Darlington Musarurwa 11/22/2005

ZIMBABWE has joined the African Cotton and Textile Industry Alliance as Sub-Saharan countries adopt a protectionist approach owing to the decline in incomes induced by the policies of industrialised countries. The African Cotton and Textile Industry Alliance is a regional grouping bringing together cotton and textiles industries of both Sadc and Comesa countries. The regional lobby's long-term plan is to establish a permanent advocacy to fight negative factors affecting production of cotton lint and the marketing of textiles in both local and international markets. The sector is presently confronted by many challenges on the global marketplace, as prices have become uncompetitive and textiles less profitable. For Zimbabwe, cotton has now become the leading foreign currency earner and is this year expected to earn the country close to US$113 million after realising 250 000 tonnes of the commodity. Some of the country's major players include the Cotton Company of Zimbabwe (Cottco), Cargill and Grafax, the Cotton Growers' Association and the Cotton Promotional Council. Zimbabwe has, of late, given more prominence and attention to cotton following the declining fortunes in the tobacco sector. The Sadc grouping lobbies for more protection of local cotton farmers, who are presently failing to access and obtain fair prices for their products on international markets. Mr Jas Bedi, the chief executive of Kenya's Apparel Manufacturers and Exporters' Association, presently chairs the grouping's interim steering committee. The Regional Agriculture Trade Expansion (RATES) programme serves as the secretariat of the new organisation. Earlier this year, Zimbabwe participated under the banner of the new body at the Regional Cotton and Textile Summit in Johannesburg where it was agreed to launch a protracted campaign against subsidies by industrialised countries. Huge subsidies, often described by African countries as "obscene", have adversely affected earnings from the crop that is regarded as the "white gold" due to its growing reputation on the international markets. "The formation of the regional alliance is a very important development that provides emerging markets like those in Zimbabwe with the opportunity to voice their concerns, particularly on price distortions affecting export receipts. "Now we can be able to have an input into deliberations at forums like the World Trade Organisation (WTO) and the US' Africa Growth and Opportunity Act (AGOA) with a common voice. "The farming of cotton is a mainstay of many farmers in Africa who derive their incomes from the crop, yet are incapable of making their voices heard in the international community that largely determines international prices," said a senior Cotton Company of Zimbabwe official. International cotton prices have for the past years affected the gross earnings of companies like Cottco as international lint prices took a 15 percent plunge after the market was flooded by subsidised cotton lint from the developed world. Zimbabwe's textile industry has of late not fared well as 15 companies have reportedly ceased operations. Poor international price distortions are also affecting livelihoods of many peasant communities in Sub-Saharan Africa. According to official estimates, the country is however, next year expected to increase its cotton production to 400 000 tonnes and there has been increased support of the sector by stakeholders through input support schemes. Meanwhile, New Ziana reports that Cottco has called for the enactment of legislation to regulate players in the cotton sector. The cotton producer, which posted a profit after tax of $122 billion for the half-year ending September, called on all players in the sector to invest in seed cotton production. Presenting its year-end results in June, Cottco called for a national scheme in which all players contribute inputs to meet increased demand for seed cotton. The company said the proliferation of players in the sector had "seen industry quality standards falling and ginning capacity rising to more than double the requirement of the current crop production levels". "This is unsustainable if Zimbabwe is to maintain its position as the favoured source of high quality lint," Cottco said. Some local merchants have been accused of concentrating on buying cotton while neglecting the provision of inputs to farmers so as improve production. The company said national crop production slumped from 331 000 tonnes to 198 000 tonnes as a result of last season's drought. Enditem