Government plans to control Cottco’s shareholding

the herald

business journalist

THE government will complete a deal within the next two months to raise its stake in Cottco to a majority stake, an official has said, as it seeks to influence the country’s biggest cotton company.

The transaction would be completed by July 1 this year, Minister of Lands, Agriculture, Water, Fisheries and Rural Development Dr Anxious Masuka said during a speech at the from a Cotton Farmer of the Year event in Chinhoyi last week, where he also announced the government’s plans to promote the development of high-yielding cottonseed hybrids.

Last year, the government, which has funded cotton production since 2014 under the presidential free inputs program, approved increasing its equity to 51% from 37%.

“The majority stake in Cottco will legally empower the government to provide more funding to the company,” Dr Masuka said.

He said the government, through the Cotton Research Institute, is considering developing hybrid seeds, but will import them from India in the meantime. There are already growing calls from farmers and various stakeholders for increased use of hybrid seeds.

Farmers said the government should step up the use of high-yielding hybrid cotton seeds to increase productivity and reduce the risk of crop failure, as traditional open varieties (OPVs) were becoming more susceptible to recurrent droughts, pests and to diseases.

Feasibility studies on the use of hybrid seeds have shown that production could increase up to 600,000 tons per year.

Last year Zimbabwe produced 130,000 tonnes of lint and it looks like production could drop this year due to poor rains in most cotton growing areas.

Cottco has asked the government to buy more hybrid seeds and Dr Masuka said he has already held a meeting with Finance and Economic Development Minister Mthuli Ncube about it.

He also contacted India’s Ministry of Agriculture and Farmers’ Welfare, where Zimbabwe imports hybrid seeds. Dr Masuka apologized to farmers for the late payments for last year’s cotton deliveries and said all outstanding payments had finally been paid.

As the next season approaches, the Minister has assured farmers of timely payments, with 75% of their income being paid in US dollars, just like tobacco farmers, while the rest will be paid in national currency. The prize for this year’s winner, Mr. Peter Mhlauri, was a 75 horsepower tractor, a four-wheel trailer and a three-disc plough.

Speaking at the event, Mr Mhlauri urged the youth to venture into cotton production, taking advantage of free inputs and tillage services. “Please come and join us…this program leaves no one behind, including young people. Let’s take advantage of these government programs to empower ourselves.

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