Agricultural Marketing Authority (AMA), chief executive, Nancy Zitsanza announced that cotton growers in Zimbabwe shall only get a high of US$10 as part of their foreign currency payment which will then be deducted from the total revenue they earn from their cotton proceeds.
Zitsanza said that stakeholders had agreed on the deal which effectively means that the cotton farmers will not be getting any hard currency. She said:
The floor price for the 2019 cotton marketing season shall be RTGS$ 1.95 per kg.
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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.”
The foreign currency which the farmers would have earned is deducted from the total earned by the cotton growers at the prevailing interbank rate. This means 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.
Cotton farming has been on the decline since 2014 thereby forcing the clothing sector to rely on cotton imports for more than 50 percent of their fabric needs.
More: New Zimbabwe