Cotton farmers in the country have started accessing loans for the purchase of cotton seed courtesy of the Cotton Ginners African Limited (Cgal).
The cotton industry’s future looked break after 70 percent of the farmers last growing season defaulted K2 billion (about $3million) in loans.
According to Cotton Farmers Association of Malawi (Cofam) president, George Nnesa, about 300 000 farmers have accessed loans to buy cotton seed.
He said: “Cgal has been distributing the loans to cotton farmers including those who had defaulted in the previous season.
“The agreement is that they will repay the loans including the defaulted ones.”
Cotton, which is the country’s fourth largest cash crop after tobacco, sugar and tea, generates an estimated over K5 billion annually.
Experts in the sector have argued that the crop has huge economic potential and could rake in substantial amount of foreign exchange, in excess of $500 million (about K306 billion) per annum, more than what the country gets from tobacco.
The crop is mainly grown by smallholder farmers in Balaka, Chikwawa, Nsanje and some lakeshore districts such as Salima and Mangochi.