Cotton Ginners Africa Limited (CGAL) says it will this year buy the crop at K375 per kilogramme (kg) and provide loans to farmers.
This is despite a majority of farmers having defaulted to pay K2 million in loans they got last season, CGAL general manager Spencer Zinyemba said in an interview on Tuesday.
He said the company aims at restoring the image of the cotton sector to turn the crop into one’s of the country’s reliable foreign exchange earners to enable farmers realise reasonable returns.
He said the company will ensure farmers are well supported to enhance a culture of paying back loans.
“We did not sale any inputs to farmers on cash basis; it was all on credit because of the relationship which we would like to continue. As such, it is prudent for them to settle the loans so that we continue with our programme,” he said, urging the farmers that still owe the company to settle the outstanding loans.
Cotton Farmers Association of Malawi (Cofam) president George Nnesa, in a separate interview, commended CGAL for the initiative, saying it will help farmers who most of the times face hurdles to access basic inputs for production.
He said farmers have over the years suffered losses from cotton due to poor prices offered by ginners.
“Farmers are left deprived every growing season as they fail to realise gains from their hard work on account of poor prices and lack of inputs. This gesture by CGAL is, therefore, commendable because it will help turn around things in the sector,” he said.
Cotton output has been poor over the past years, and according to the first round of crop estimates for 2016, output is this year excepted drop by 43 percent to 48 091 metric tonnes due to the effects of El Niño.
The crop, which is largely grown by smallholder farmers in Chikwawa, Nsanje, Salima and some lakeshore areas, is lucrative along its production value chain. n