Eddie Cross's Website

The Zimbabwe Cotton Industry

The production of cotton in Zimbabwe has a long history. It was one of the crops that early farmers experimented with but was largely abandoned because of disease and insect infestation. However, when the United Nations imposed severe sanctions on the country after the 1965 unilateral declaration of independence, the agricultural industry was forced to diversify.

By then research had improved crop varieties and pest control was much more advanced and very quickly the crop expanded. In the Communal Lands the crop was promoted from the early 60’s in the drier regions and small scale farmers found it a useful source of cash income. When the large scale farmers came on board after 1966, the growth in the industry was exponential and in response the Government created to Cotton Marketing Board. The necessary legislation was passed in 1969 and the organisation began operations under the auspices of the Agricultural marketing Authority.

A cotton Gin was imported from the United States despite every effort made to stop its export to the country under sanctions and when it arrived in Harare it was sent to a local industrial firm with instructions to start manufacturing our own. By 1975 the industry was producing over 400 000 tonnes of seed cotton a year and the country became the second largest producer after the Sudan in Africa. By then, the tobacco industry had largely overcome the early impact of sanctions and was almost back to normal. This led to a reduction in large scale production which was replaced by rising output from the small scale sector.

On the processing front, the industry also expanded and by Independence in 1980, the CMB was no longer the dominant player. International companies came into the industry, like Cargill from the USA and other private sector players also entered the market. World market prices remained firm with rising demand for both lint and seed. The domestic market for cotton seed grew strongly as a supply of vegetable oil and stock feed.

In 1994 the Board was privatised and came under the control of a public holding company on the local stock market. Initially the company behaved itself and rapidly took on near monopoly status, handling 80 per cent of the crop, when private sector players left the industry in response to failing macro-economic factors. In response the State increasingly took on the role of supporting the small scale industry which now involved hundreds of thousands of small scale farmers. This helped maintain primary production but even so the industry shrank to half its size by 1997.

The fast track land reform program virtually extinguished commercial large scale farm production and the training and research programs organised and partially funded by the large scale industry, collapsed. This halted further expansion and recovery and the quality of seed in the varieties that were available, deteriorated.

Now a near monopoly, the Directors and management of Cottco began to abuse their positions. I am not sure when this started but it was many years ago. They found that they could under invoice their exports and take the margin created off shore. Having got away with this, (despite the 37 per cent equity held by the State who should have been exercising their virtual control as a shareholder) this practice grew until it was affecting the operations of the company at home. The Company was forced to reduce farmers prices and by 2018 they stopped producing public accounts and were suspended from the Stock Market.

This should have triggered an investigation by the shareholders but as a majority were involved in the corruption that was taking place and we were going through a political transition and then an election, nothing happened. During this time the looting of the company started to involve management and even the sale of cotton seed on the domestic market. There were some very public incidents – one involving a Member of Parliament who bought a very expensive sports car and exhibited an exorbitant life style all based on contracts with Cottco.

But the main casualties in this whole sorry tale were the 400 000 families who grew cotton in the rural areas. Farm prices fell to totally uneconomic levels – perhaps half what they should have been and farmers were not paid. Output collapsed to less than 100 000 tonnes. Stories of cotton growers being paid in groceries and even forced to deliver their crop to local Cottco depots, abounded.

The State tried to prop up the industry with inputs delivered free to growers under a Presidential input program, but this was no substitute for just basic economics. Eventually the State as a shareholder and interested party became involved. Cottco was essentially bankrupt, could not pay back the loans already drawn from Banks, could not pay their farmers for cotton delivered to its depots and already weighed and graded and they were still not producing accounts. The odd individual was prosecuted and the Directors (the main culprits) vanished and a new Board was appointed and a forensic auditor appointed.

That was a year ago and still no progress was being made or significant changes introduced. Four months ago, a new General Manager was appointed. She was Pricilla Mutembwa who had managed the Cargill investments in the industry after Independence. Pricilla has an outstanding reputation as a Manager and obviously knows the industry backwards. All of us thought what a great move that was only to learn of her “suspension” at the end of the year. I suspect she was trying to clean the house after years of corrupt and incompetent management.

If the Government does not already know it, it has a real crisis on its hands in this industry. I wonder just what is needed to get some action. They have just moved the government shareholding across from the Ministry of Agriculture to the Mutapa Investment Fund as one of the 22 State owned or controlled enterprises that are under performing being transferred to under its new wings. I am aware that there are plans to increase the State controlled shareholding in Cottco to over 50 per cent and then take steps to clean up its act, but why the delay?

We have a climate which suits cotton, especially in the drier regions of the country. Our soils are good, we have ample sources of irrigation water and best of all, we have 400 000 small scale farmers, many of whom have been growing cotton for more than twenty years. They know the crop; cotton varieties are available with yields that can double historical production levels. We have a research station at Kadoma and opposite is a multimillion dollar training centre for the industry still in good condition.

Modern technology allows us to communicate with every grower, every day and feed them information about pest and disease control, the weather and market advice. We could provide each grower with the inputs needed without State support, we can collect, grade and process up to half a million tonnes of raw cotton into lint and seed for sale. We plan a commodity market in Harare where both could be sold to buyers in an open and transparent manner – no under invoicing or side sales.

Today lint is selling at US$2 per kilogram on international markets, the local market will pay US$300 a tonne for seed. That is gross revenues of US$1.00 per kilogram of seed cotton. If we paid our farmers 70 cent a kilo on delivery and then organised a supplementary payment at the end of the season if we made a profit, farmers would go back to cotton in an instant. We could grow a million tonnes of seed cotton a year without difficulty. At this level it would rival tobacco as a source of farm income. If this was spun into yarn – stage one of the process of value addition, it would earn two billion dollars a year in exports. The impact on rural poverty would be dramatic. What is wrong with us Zimbabweans?

Eddie Cross
Harare, 10th of February 2024