Market Information

Farmers reject Shs 1000 set price for Cotton

KAMPALA, Uganda: cotton farmers in Uganda have opposed the sh1,000 indicative price set by the Cotton Development Organisation (CDO) and are demanding that they deserve a fair price this season. Cotton farmers have always looked forward to having an indicative price for cotton set which can save them from unscrupulous middle-men, who take advantage of their ignorance to exploit them.

The CDO announced an indicative price of sh1,000 for a kilogram of seed cotton this harvest season. This implies that cotton buyers will not be allowed to purchase below the indicative price because this would be in contempt of rules and regulations governing the cotton industry.

The Cotton Development Organisation monitors the production, processing, and marketing of cotton in Uganda. The organization promotes the distribution of high-quality cottonseed and generally facilitates the development of the cotton industry.

Established in 1994 by an Act of Parliament, it has the responsibility to monitor the production, processing, and marketing of cotton so as to enhance the quality of lint exported and locally sold, to promote the distribution of high-quality cottonseed and generally to facilitate the development of the cotton industry.

Cotton is Uganda’s third largest export crop after coffee and tea. It is the main source of income for some 250,000 households, who cultivate cotton under rain-fed conditions and with minimal use of inputs, such as fertilizers and chemicals. Since the climate and the soil are very suitable for cotton cultivation, it is a very popular commodity among smallholders with an average farm size of 0.5 hectares.

The indicative price, however, did not enthuse 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.

Farmers have proposed that the indicative price is increased to sh2,000 to enable farmers to meet all the expenditures they make during the production process. Lira is one of Uganda’s biggest cotton producing districts, the other is Kasese.

Farmers also said that buyers always insist on paying the minimum price. The indicative price for a kilogram of seed cotton should have been set at sh1,500. Most farmers depend on borrowed money from Microfinance institutions and Savings and Credit Cooperative Societies (SACCOS). And with sh1,000 per kilogram, they may not realize enough margin to repay loans.

CDO Executive Director Jolly Sabune, said that sh1,000 is just a guiding price in the face of falling international cotton prices. She urged farmers not to accept lower prices, but negotiate for a higher rate.

“CDO does not buy cotton, but is 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 do not cheat them,” she said.

However, according to reports, a kilogram of cotton on the international market is at US$1.5 (about sh4,000). However, it is also noted that Uganda’s indicative price is slightly lower than Tanzania’s indicative price of sh1,162 for this season.

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