Cotton production risk sinking in Malawi

From time immemorial cotton has been one of the major contributors to Malawi'ss agriculture-based economy, however, as Frazer Potani reports from the capital Lilongwe production risk declining as growers are disappointed by low prices offered by buyers.

49-year- old Gabriel Gondwa sits on a mat made of goat skin in Mfulanjobvu area in Balaka southern Malawi as he wipes sweat from his forehead using a yellow handkerchief.

He is confused as he doesn’t know where to go with a heap of 50 cotton lint bales by his side to fetch better price to make profit as what buyers are offering to him is just too little.

Similarly Maria Alimenda 36 in Chief Tengani’s area in Nsanje, also southern Malawi sharing boundary with Mozambique is busy clearing her cotton ground to plant maize.

“I am not going to grow cotton again because it’s a loss making business,” said Alimenda adding that she had a lot of hopes of making profit from her 20 bales of cotton she had harvested from her piece of land.

“To the contrary what I got was literary peanuts,” said Alimenda mother of six as she wipes sweat from her forehead using a corner of chitenje (cloth).

Alimenda is one of the many farmers in Balaka, Chikwawa and Nsanje disappointed because their cotton was pegged prices as low as K40 to K42 (or 28 to 30 US cents per Kg) despite investing more in the field.

This is after cotton buying companies were adamant to purchase cotton from farmers at a minimum price tag set by government of K75 (or about .50 US cents per Kg).

Malawi’s agriculture Principal Secretary Erica Maganga said Malawi government told the local media that continues to hold negotiations with cotton buyers to offer good prices to Malawian cotton growers.

She however, said her fellow Principal Secretary in the ministry of agriculture Andrew Daudi was in a better position on what was transpiring.

During the meetings

But Daudi denied attending any talks with cotton buyers saying Malawi government’s stand on set minimum price for cotton remains the same.

‘We did not have any discussion with buyers. The purchase price was set at K75 those unsatisfied should refrain from enticing farmers to sell at lower prices. Agriculture is a business. The cost of cotton production is very high. If a farmer is to profit then the selling price must be just,” said Daudi.

He further said Malawi government was aware that some companies were taking advantage of poor cotton farmers and their desperate for money to offer them low prices for their produce.

“We are aware that buyers in Balaka, Chikwawa and Nsanje are buying cotton from farmers at as low as K42 per Kg. We are monitoring the situation before taking appropriate measures on these culprits for this is underestimating the laws of this country,” Daudi said adding that government has assigned its state run Agricultural Development and Marketing Corporation (ADMARC) to investigate all areas where buyers are exploiting cotton growers through offering low prices.

President Bingu wa Mutharika rushed at his critics who were against his administration’s decision of setting minimum prices for cotton and other crops in Malawi ’s liberalized economy.

“It is the practice in developed countries with big economies such as Japan, Germany and France to protect their farmers from exploitation so why should my government not do the same to make sure that Malawian farmers reap from their sweat?” said Mutharika.

One of the major cotton buyers, Cargill Malawi Ltd and prominent member of Cotton Development Association (CDA) said it would not buy cotton from Malawian growers this year after failing to negotiate lower prices.

The firm said it invested a lot of money in cotton growing through growers and opted for lower prices because the on going global financial crisis in its operations.

Malawi’s cotton production and contribution to the country’s economy dates to the time of Scottish missionary, David Livingstone when the country was called Nyasaland or ‘Land of the Lake’ according to Guide to Blantyre and Southern Region of Malawi.

In his journal Livingstone talks of seeing an eight- acre cotton field in the Shire Highlands and many other travelers also commented on the thriving local cotton industry.

However, the staple of this local cotton was thought to be too short for export, so samples of Egyptian and American varieties were tried with success.

In 1893, 40lbs (175Kg) of cotton were exported, most of it grown in Blantyre district, southern Malawi.

Interest in cotton growing was however; slow to develop at first but soon the crop was grown by both African and European farmers.

Acreage increased from 60 acres in 1901 to 22,000 acres in 1904, and by 1917 cotton accounted for 44 percent of Malawi’s exports. This turned out to be a peak year, as the war in Europe heavily affected the manufacturing industries there. For many years there after cotton was one of the top three exports of Malawi.

However, Farmers Union of Malawi (FUM) says poor cotton prices on the market have disappointed many growers this year hence, predict that production will drop next year as more of Malawi’s over 30,000 cotton farmers are likely to turn to other crops such as maize just as Alimenda is doing.

But there is a possibility that Malawi ’s cotton production could get a boost following the country’s decision to dump Republic of China ( Taiwan ) for Beijing (People’s Republic of China ) at the end of 2007.

China has through Malawi Cotton Company invested over $25 million (K3.5 billion) cotton processing plant project in Balaka, about 200 km from Lilongwe. The project is expected to apart from being a ready market for cotton farmers, create over 1,000 jobs to indigenous Malawians and is a Chinese Investment by the China Africa Cotton Development Ltd.

The company comprises of Cotton Ginnery, Textile Manufacturing Plant and Cooking Oil extraction. The company will al;so processing cotton seed cake.

Vice President Joyce Hilda Banda presided over the historic launch of the first completed project few months ago and also laid a foundation stone for the spinning mill.

She described the opening of the firm, which occupies some 28 hectares of land, as a distinctive and very essential investment to Malawi ’s agriculture dependent economy.

“Malawi Government believes that by setting up this company, the country will create employment and bring additional export earnings instead of exporting job opportunities to other countries,” said Banda.

Currently Malawi where over 60 per 100 people live in abject poverty mainly in rural areas, produces over 75,000 metric tones of cotton annually and just about half of it (35,000) is processed locally while the rest is all exported raw.

“It’s the wish of Malawi Government under President Bingu wa Mutharika to ensure that all cotton grown in Malawi must be processed right here so that farmers earn more money on their crop,” said Banda.

She further urged companies to utilize locally grown cotton to feed Malawi’s textile manufacturing industry rather than exporting.

Balaka’s District Commissioner James Manyetera said the newly invested Chinese cotton plant would offer an alternative market to disgruntled cotton growers thus boosting prices for their produce.

“Malawian cotton growers including those from Balaka, will have the trustworthy market for their commodity; other people will also find employment while consumers will buy cheap products from it,”said Manyetera.

Chinese Ambassador to Malawi Ling Songtian said both Malawi and China would equally benefit from the establishment of the cotton company in Balaka.

“The establishment of the company will transform cotton into Malawi’s second forex earner because President Bingu wa Mutharika has put in much prominence in this commodity,” he said adding,“Currently, tea is Malawi’s second major export earner.”

The Chinese ambassador further said the newly opened cotton company would be exporting to China the final product.

“The opening of this cotton factory will live to Mutharika’s ambition of transforming Malawi into a producing and exporting nation and not as importing one,” he said.

Traditional Authority Nsamala of Balaka who witnessed the cotton factory’s opening thanked Malawi Government for convincing the Chinese to establish the plant in Balaka.

Nsamala has all the reasons to smile because his subjects working as casual workers at newly established cotton factory are currently receiving K300(slightly over $2) per day(eight hours against Malawi Government’s standard minimum wage of K167 (slightly over $1 per day).

When cotton production gets re-boosted it would increase Malawi ’s exports of the agricultural dependent economy.

Last year, according to Malawi’s Industry and Trade ministry total export revenue rose by over 30 percent from K80.4 billion in 2007 to K104 billion.