The tendency by some ginners to buy cotton from farmers they did not support with inputs has been identified as one of the challenges creating chaos in the sector.
Cotton Ginners Board chairperson Amos Chipungu, in an interview on Tuesday, said there is need to put measures and regulations to punish ginners purchasing cotton from farmers they did not support.
“If this practice continues, it will lead to others reducing support to farmers because they know they will get the crop anyway. I believe with strong penalties this practice can come to an end,” he said in Lilongwe on the sidelines of a cotton stakeholders conference organised to find solutions to the problems affecting the industry.
Some of the cotton ginners in the country include Great Lakes Cotton Limited, Cotton Ginners Africa Limited, Toleza, Malawi Cotton ETG and Afri Asian.
Chipungu said there are some players in the sector enjoying support from government, but do not reciprocate the same to farmers the way other ginners do.
He said ginners bear the risk once they have given out loans to farmers.
“Ginners are managing a huge risk as there is a huge default rate among farmers. For example, last growing season, ginners gave out inputs amounting to K2 billion (about $2.9million), but farmers only paid K700 million (about $1million) meaning that K1.3 billion (about $1.92) is still with the farmers. We need to recover this money,” he said.
Vice-chairperson of Cotton Council of Malawi, Spencer Zinyemba, agreed with Chipungu, saying the problem of ginners buying cotton from farmers they did not sponsor is huge and has brought chaos in the industry.
“The reason ginners purchase cotton from farmers not sponsored by them is because we are under producing. If we were producing enough, this could not be an issue.
“However, we need strong regulations to punish those perpetrating this practice which is not good at all,” he said.
Experts believe Malawian cotton farmers have the potential to produce 3 000 kilogrammes (kg) per hectare (ha).
Currently, the farmers produce between 800 to 900 kg per ha.
Malawi is this year expected to produce about 22 000 tonnes of cotton, which is 43 percent down from last year’s output due to the effects of El Nino. n