Source: Cotton side marketing scandal exposed | The Herald July 25, 2019
The Cotton Company of Zimbabwe has recovered several bales of cotton sold to a competitor in an exercise that has exposed serious acts of side marketing in the Lowveld.
The operation, jointly conducted by Cottco and the Agricultural and Marketing Authority, has resulted in huge amounts of raw cotton recovered from Southern Cotton.
“The exercise, with AMA is ongoing and will be taken to others various buying points,” an official with Cottco told The Herald Business. We have recovered so many bales and still have some that are quarantined (in dispute),” the official added.
Southern Cotton has been at the centre of side marketing storm, targeting the crop funded by the Government through Cottco under Presidential Free Inp Scheme.
Side marketing takes place when parties to the contract violate the agreement, either when a farmer sells to other merchants or when a company buys from farmers it has not contracted.
Side marketing is largely blamed for the near collapse of the industry when companies such as US-based Cargill closed its local operations citing poor recoveries.
Poor recoveries led to reduced support from contractors, resulting in production falling from a peak of 352 000 tonnes in 2011/12 season to only 28 000 tonnes in 2015.
This prompted the Government to intervene through the Presidential Free Inputs Scheme, which lifted production to 142 000 tonnes between 2015 and 2018.
Cotton Producers and Marketers Association has already raised a red flag over side marketing, saying it was counterproductive and worked against revival of the industry.
“As the representatives of cotton farmers, we are concerned with side marketing, which is creating confusion, conflict and despondency in the cotton industry. Our investigation has revealed that farmers are using another farmers’ name to sell to a particular company where they are not contracted. I therefore call upon the government, through AMA to ensure proper enforcement of the regulations.”
“We urge the authorities to market sure such practices is eliminated through proper enforcement of regulations. This will give confidence to other companies to invest.”
AMA chief executive Mrs Nancy Zitsanza, told Herald Business in an interview that the authority have some mechanisms aimed at discouraging side marketing.
“If we are convinced that a merchant has wilfully bought someone’s cotton, we fine the culprit $300 per bale over and above recovering the stolen crop and I think that is very discouraging,” said Mrs Zitsanza. “We are saying no to side marketing since we want to encourage financers to re-invest. As such, we encourage companies to bring to our attention such issues so that we decisively deal with them.”
Efforts to get an official comment from Southern Cotton proved fruitless.
But in the previous interview, the company said it was only buying from its contracted farmers.