By Alois Vinga
COTTON growers in Zimbabwe shall only get a high of US$10 as part of their foreign currency payment which will then be deducted from the total revenue they earn from their cotton proceeds.
This effectively means they will not be getting any hard currency.
Agricultural Marketing Authority (AMA), chief executive, Nancy Zitsanza announced the latest development saying that key stakeholders in the sector have since reached an agreement.
“The floor price for the 2019 cotton marketing season shall be RTGS$ 1.95 per kg,” she said.
“The cotton merchant shall pay the grower. This price of RTGS$1.95 per kg using a combination of USD cash, RTGS$ cash and electronic transfers as follows; for a bale of 200kgs and above, the grower shall receive cash payments of US$10 and RTGS$150.
“Any remaining RTGS dollars shall be transferred into the grower’s Mobile Money wallet and for a bale of between 150kgs and 199kgs, the grower shall receive cash payments of US$5 and RTGS$150.
“Any remaining RTGS dollars shall be transferred into the grower’s Mobile Money Wallet.”
AMA said the foreign currency component paid will then be deducted from the total earned by the cotton growers at the prevailing interbank rate implying that if a grower is paid RTGS$390 on a day the interbank rate is at 1:3, then RTGS$370 will be transferred into his account.
The cotton growing sector has been facing a number of challenges owing to poor producer prices payments and severe droughts.
Between 2014 and 2016, cotton output dropped by 76 percent, forcing the clothing sector to rely on cotton imports for more than 50 percent of their fabric needs.
The latest development comes at a time when players in the country’s key productive sectors, agriculture and mining have bemoaned the foreign currency inaccessibility challenges owing to retention thresholds set by the Reserve Bank of Zimbabwe (RBZ).
Tobacco growers have since raised alarm on the move by the RBZ to pay them 50 % in hard currency through their Foreign Currency Accounts while the remainder is paid in RTGS dollars at the prevailing interbank rates.
Last week, the Gold Producers Association of Zimbabwe bemoaned the retention thresholds and continuous delays by the RBZ in remitting the foreign currency payment component.