The cotton industry has adopted contract farming as an exit strategy to zone farming system in a bid to increase competition among ginners and offer farmers better prices for the commodity.
Under the zone system, farmers were obliged to sale the produce to the ginner who gave the farmer inputs while, under contract farming, a farmer will be able to sell to another ginner provided they pay the loan to the contracting ginner.
The option to adopt the system was agreed upon by the Cotton Council of Malawi, Cotton Farmers Association of Malawi (Cofam) and ginners at a meeting held over the weekend.
According to Cofam Chief Executive Officer Snowden Mbalafala, farmers have welcomed the system, which will be piloted across the country during the 2021-22 farming and marketing season.
“With the system, the farmer will be assured of access to inputs and market availability. There will be competition and farmers would be selling to ginners offering competitive prices,” he said.
Under the contract system, farmers will be required to form groups and open accounts with commercial banks which will be used for deducting loans before the farmer withdraws proceeds of the sales.
The Ministry of Agriculture has since welcomed the development, adding that it has been long overdue as there was no sanity in the industry.
Ministry of Agriculture spokesperson Gracian Lungu said in a separate interview that the government would be vigilant in protecting farmers from abuse.
“When we come up with farm gate prices, we consult stakeholders including ginners. Therefore, we will make sure that when farmers are signing for prices, the prices should be at or above minimum farm gate prices,” he said.
Cotton is one of export crops for Malawi, complementing other crops such as tobacco, which is the main forex earner, and tea and sugar.
Contract farming is also being used in tobacco industry.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.