Uncertain Prices Have Growers in Zimbabwe Concerned

By Jim.Robinson|May 11, 2011

Last month, cotton growers agreed to accept a minimum price for their lowest-grade cotton during the 2011 marketing season. According to the agreement, buyers would pay 85 cents per pound for the lowest grade (D), 89 cents for C grade, 96 cents for B grade, and $1.05 for A grade.

What they forgot to negotiate, based on the current, tense situation, is when the money would be paid. Farmers are currently receiving the 85 cents-per-pound price when they deliver their crops, regardless of the quality grade. Merchants and ginners say the premium prices earned by higher grades will be paid later, when the cotton is graded. Farmers want the cotton graded upon purchase.

According to the buying group, they are doing growers a favor by paying the minimum 85-cents-per-pound price upon delivery, then paying the premium based on quality about three months later. They claim that in the past, farmers didn’t receive any money at all until the quality classing was completed (Sept. 30). Now growers can at least get the minimum price for their harvest right away, and still be compensated based on higher quality a few months later.

Farmers are now uncomfortable with the arrangement, sources say. The Zimbabwe Farmers Union wants buyers to grade the cotton on-site at delivery, even if the premium prices paid as a result of that grading until several months later.