Cotton growers will receive payment exclusively in United States dollars for the 2025 marketing season, with the base price for Grade D set at US$0.30 per kilogramme.
After grading, farmers will receive additional payments based on quality, with Grade C priced at US$0.34, Grade B at US$0.37, and the top grade, Grade A, fetching US$0.41 per kilogramme.
Zimbabwe Farmers Union (ZFU) Secretary-General Paul Zakariya criticised the current profit-and-loss pricing model, arguing that it often shifts the burden of ginners’ inefficiencies onto the producers. Said Zakariya:
As the farming community, we would have been happier if the price had been pegged above last year’s base price of US$0,32 per kilogramme.
Considering the producer price of seed cotton this year, we need to revisit the model we use to negotiate, as this profit-and-loss sharing model is not working for the farmer.
We advocate for a cost-plus pricing model where farmers’ production costs are considered, and then a markup is negotiated.
Cost-plus pricing is a simple yet effective strategy in which a business sets the selling price of a product by adding a fixed percentage (markup) to the total cost of production or acquisition.
Zakariya noted that, despite the implementation of a grade-based pricing system, farmers have yet to see any real benefit from the price variations. He said:
The Grade D price paid at the Common Buying Point (CBP) is the final price a farmer receives, with no top-ups for higher grades.
We want farmers to receive a voucher indicating their cotton grades to incentivise the production of quality crops.
Local cotton expert Justice Mupotsa has called for a reassessment of how farmers are compensated, and called for the announced Grade A price of US$0.41 to be applied across all cotton grades this season.
Zimbabwe is expecting a cotton yield of 63,000 tonnes this year, a significant rebound from the 13,000 tonnes produced last year, which was heavily impacted by an El Niño-induced drought.
More: The Herald
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