Farmers query cotton stabilisation fund

Reduced revenue. Cotton price fluctuations are to blame for farmers’ losses, now that the yields are low.

Cotton farmers are questioning the feasibility of government’s proposed cotton price stabilisation fund meant to regulate fluctuating prices.

Farmers who talked to Prosper said a similar setting dubbed - the cotton fund- has been around for the last two years, but it has not shielded them from meeting sharp losses from unstable price.

Mr Matias Osege, a prominent cotton farmer in Sere village in Tororo district, said the ginners deducted Shs600 per Kilogramme from last season’s sales to raise funds that would cover them when prices drop.
Of the Shs600, Mr Osege, explained that the Shs200 was for taxes and Shs400 was meant to be remitted to the fund as farmers’ contribution.

“Since cotton prices have been fluctuating year after year, we had no objection to deducting Shs400 per kilogramme sold, thinking the money will rescue us in difficult times. But we were surprised to hear that the money was diverted into other things,” Mr Osege said.

He alleged that officials from the Cotton Development Organisation (CDO) -a government agency charged with the responsibility of monitoring production, processing and marketing cotton- told them that the money was used to buy tractors, seeds and other inputs.“No funds were saved for topping up,” he added.

Mr Frank Twinamasiko, Chairperson of Abasaija Kweyamba Mubuku Farming Cooperative Ltd, echoed similar sentiments, saying that he was skeptical whether the move would help since the existing scheme has been mismanaged.

He said:“When the CDO set the price at 1,600 this season, we were not bothered thinking the contribution we made last season would cover us. It disheartened us to hear that our money was misused. We demand clarity from the government that this time we will benefit”

Farmers’ reactions come days after government promised to intervene in stabilising the crop price by setting a stabilization fund. Meanwhile, introducting the price stabilisation fund means that farmers will lose more money in sales since there is another fee deducted from each kilogramme sold to support their cotton fund.
The cotton market has been more volatile than any other commodity market now that a kilogramme of cotton costs Shs800 compared to last season’ s Shs3,000.

Unfortunately, players predict a more price fall.

State Minister for Agriculture Zerubaberi Nyira said government has started negotiations with ginners and farmers to introduce the fund that would shield the latter from feeling the pinch of unstable prices.

“The response (towards the introduction of a fund) has been so good,” Prof Nyira said. They are suggesting that farmers remit Shs200 per a kilogramme sold as their contribution to the fund as government will also contribute a reasonable fund to cover-up the gaps in pricing.

This proposal comes a few days after farmers in Lango Sub-region petitioned Parliament over the unregulated cotton prices, which they said was affecting their income.

Mr Charles Angiro, a farmer’s representative presenting their petition to Parliament said it was unacceptable for dealers to buy their cotton at Shs800 after heavily investing in the crop. He said farmers were being cheated as CDO looks on. Farmers, in their petition, asked for government’s intervention through subsidies, which Professor Nyira strongly ruled out saying: “The question of subsides is totally out. Government cannot offer subsidies to cotton alone. Once we give them subsidies, farmers dealing in other crops will also ask for the same help which government can’t afford.”

Meanwhile, the Agriculture ministry blames the downward trend to volatile world cotton market.
jmiti@ug.nationmedia.com