Regional Markets

3 Cases
are located in semi-arid parts of Zimbabwe with poor quality infrastructure, limited
access to telecommunication services, banking facilities, agricultural support services,
information and markets. Persistent droughts make it impossible to grow many of the
staple food crops in these areas, highlighting the importance of cotton, which is very
drought tolerant and provides the main source of income for food consumption.
Next to smallholder cotton farmers, other major stakeholders in the value chain are
the cotton merchants, the government, the Federal Cotton Producers Association
(FCPA), input companies, farmers unions (Zimbabwe Farmers Union, Zimbabwe
Commercial Farmers Union), and merchant shareholders. The cotton merchantsconsist
of fourteen registered cotton-buying companies. COTTCO is the largest, with
almost half of all ginning capacity and nine ginneries spread across all the main cotton
producing regions. Cargill is the second largest company, with three ginneries and
17% of total capacity. Also other smaller ginneries have mushroomed across Zimbabwe
in the past 2 to 4 years. This diversification of processing capacity may be a sign that
cotton ginning is becoming a viable business, thus offering new possibilities for smallscale
cotton producers.
After ginning, the lint is sold to local spinners and weavers. Thirty percent is marketed
locally and 70% is exported. While it is possible for farmers to rent ginning equipment,
the companies offering these services are the buyers themselves, and they seek to minimise
competition. Recently, with support of government legislation (Statutory instrument
142 of 2009), the big cotton companies have formed an umbrella organisation, the Cotton
Ginners Association (CGA), which is lobbying for the promotion of their interests.
Due to limited resources and the absence of an open market for inputs, most smallholders
are forced to grow cotton under disadvantageous contracts with large companies,
which also serve as input providers. Farmers unions and associations should protect the
interests and aspirations of farmers, and some—like FACHIG—have been successful.
However, many unions have failedto negotiate viable producer prices, and some seem
to have even sided with buyer companies during negotiations, instead of promoting the
position of their members.The government provides the regulatory framework for cotton
production and marketing through the Agricultural Marketing Authority (AMA).
The authority was re-established in 2009, after a decade of neglect, with the mandate
to help smallholder cotton farmers market their produce. However, it has not been very
successful, and political interference is common.
As a result of the economic crisis and the political turmoil from 2001 onwards—compounded
by the effects of the 2008 global slowdown—more than 60% of garment
manufacturers had to close, and most textile manufacturers scaled down their operations.
In addition, foreign currency shortages led to problems of sourcing production
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