Ugandan cotton farmers decry low prices

By John Nzinjah & Faridah Kulabako

Farmers in Uganda have always looked forward to having an indicative price for cotton set. They say it saves them from unscrupulous middle-men, who take advantage of their ignorance to exploit them.

However, this season, farmers have opposed the sh1,000 indicative price set by the Cotton Development Organisation (CDO), arguing that they deserve a “fair price.”

The CDO, through the regional field officer in charge of western Uganda, Adrian Katwetegyeke, on Monday announced an indicative price of sh1,000 for a kilogramme of seed cotton this harvest season.

It means no cotton buyer will purchase below the indicative price because this would be in contempt of rules and regulations governing the cotton industry.

The announcement, however, did not augur well with farmers’ expectations in the Kazinga Channel cotton growing belt.

They argued that the price was too low and that the proceeds may not be enough to pay back the loans incurred during the production process.

They also noted that buyers always want to pay the minimum price. Margaret Kyomuhirwe, a farmer from Rwakingi in Bughoye sub-county Kasese district, said the indicative price for a kilogramme of seed cotton should have been set at sh1,500.

Kyomuhirwe said farmers spend a lot of money to produce a kilogramme of cotton and that most of them depend on borrowed money from Microfinance institutions and Savings and Credit Cooperative Societies (SACCOS).

She added that with sh1,000 per kilogramme, they may not realise enough profits to pay back the loans.

“Some of us may end up in prison for failing to pay the loans we got to grow the cotton.”

Kyomuhirwe said she borrowed sh600,000 to grow cotton on two acres of land. Syathomekwa Mbusa, another cotton farmer from Nyamirangara in Kilembe, noted that although cotton is a good crop to grow, the price paid after a season’s tedious exercise is discouraging.

He proposed that the indicative price be increased to sh2,000 to enable farmers meet all the expenditures they make during the production process.

CDO executive director Jolly Sabune, however, told New Vision that sh1,000 is just a guiding price in the face of falling international cotton prices.

He urged farmers not to accept lower prices, but negotiate for a higher rate.

“CDO doesn’t buy cotton, but we are required under the Cotton Development Act to protect farmers by putting a limit to the lowest price they can be paid, so that unscrupulous middle-men don’t cheat them,” she said.

However, according to information from the World Bank, a kilogramme of cotton on the international market is at $1.5 (about sh4,000).

It should, however, be noted that world cotton prices had earlier collapsed to about $0.75 (about sh2,000) per kilogramme in 2012, after rising above $2 (sh5,530) per kilogramme in 2011.

CDO says it has maintained the indicative price at sh1,000 for three years despite a fall in cotton prices on the world market.

This, according to Sabune, was to keep farmers interested and not discouraged by the declining prices on the international scene.

The process of getting an indicative price observed all criteria to protect benefits of stakeholders, who are mainly farmers and cotton buyers, Sabune said.

The criteria involves, among others, benchmarking against the current international price, production, buying as well as transport and ginning costs.

However, also important to note is that Uganda’s indicative price is slightly lower than Tanzania’s indicative price of sh1,162 (Tsh750) for this season.

It should also be noted that Uganda’s earning from cotton declined in the 2013/2014 financial year, according to the sector performance report from the agriculture ministry.

The report indicates that Uganda produced 78,364 bales of cotton in 2013/14 compared to the 102,619 bales in 2012/13.

This resulted in a fall in revenue to sh68.2b ($24.7m) in 2013/14 compared to sh76.5b ($27.7m) in 2012/13 financial year. The director of crop resources in the agriculture ministry, Okasai Opolot, attributed the poor performance to the dry spell, low soil fertility and limited use of fertilisers to enhance cotton production.

Katwetegyeke, however, noted that cotton production is expected to increase from 12,000 bales registered in the last season to 22,000 in the current season due to favourable weather conditions.