Cotton industry revival opportunity missed?

Benjamin Button, a movie character played by Brad Pitt, said that “Our lives are defined by opportunities, even the ones we miss.”

Pitt’s comment is in a movie called The Curious Case of Benjamin Button. The movie is about a man who starts life at the end of his years and works his way back to the beginning.

The irony of Button’s story is that it is so relevant to Malawi’s cotton industry.

Recently, The Nation reported that the country’s cotton industry risks collapsing due to continued dwindling of output over the past five years.

Low output means Malawi is losing billions of kwacha in earnings and importing textile, which would otherwise be produced locally.

The sector’s key players are also suffer as a result; profits keep dropping every year and debts are piling up.

The report is quoting a position paper on cotton production by the African Institute of Corporate Citizenship (Aicc) which shows that key players—farmers, ginners, suppliers and banks, owe each other close to $1 billion (K733 billion).

Production figures are scaring. Last year, the country produced less than 10 000 metric tonnes (MT) of the crop down from 100 000MT in the 2011/12, a year government injected K1.6 billion to scale-up seed production.

The decline in cotton production levels to less than 10 000MT in the 2016/17 growing year has resulted in loss of foreign exchange in excess of $60 million (about K43 billion), shrinking of economic activities within the sector and reduction in employment levels.

The AICC paper says so far around 150 000 farmers are now out of employment whereas their annual earnings of $26 million has been lost.

Ladies and gentlemen, we are in a crisis.

I thought Minister of Agriculture, Irrigation and Water Development Joseph Mwanamvekha has a sensible plan to take Malawi out of this man-made mess.

But alas, he threw in the towel conceding that the cotton industry is about to collapse. Then silence.

We on the streets are livid. Why should Malawi allow the sector to collapse when markets for textiles under the America’s Growth and Opportunity Act (Agoa) are being underutilised.

Why should the sector collapse when the Chinese are demanding more raw cotton for their textile sector? Something is terribly wrong with Malawi.

My assumption is that underproduction which is partly due to low motivation among farmers can be addressed by offering them better prices. Maybe industry experts have a better explanation, but I do see Agoa as the best opportunity if producers are able to export and get good profits from the US.

We on the streets believe that for the past 15 years, Agoa has been an opportunity missed for Malawi.

What is Agoa, some may ask. It was in 2000 when President Clinton unveiled this trade initiative. The programme was designed to improve the commercial relationship between sub-Saharan Africa and the US.

At inception, there were 34 African countries involved, and the number has grown to about 40 today.

While energy products (oil) from Nigeria, Angola, Chad and South Africa dominate African exports to the US, it is the apparel (textiles and related products) that have been able to provide more direct relief through employment and livelihood to the poorest especially farmers. Aicc can attest to this.

The only sad part is that if we look at the non-energy sector, just four of the countries (South Africa, Kenya, Lesotho and Mauritius) cover 90 percent of the exports. Malawi does not feature much.

In the apparel section, its Kenya, Lesotho and Mauritius that dominate exporting such products.

Why are we complaining of poor prices and that there is no market for cotton and its products when Agoa cries to be feed to the full?

Word on the street is that there are many apparel companies in the country who are interested in growing but remain reluctant to move forward with their investments until they are certain that production of cotton will increase.

Who would want to set up a factory when there is so much government intervention in prices and no assurance that the raw materials will be readily available?

That is why we on the streets believe that cotton revival must continue and government must stop at nothing to ensure that the industry is supported, even if it means injecting another K3 billion.

It will be heartbreaking to see the investments that former president the late Binguwa Mutharika made in cotton go to waste because of government neglect.

What will be more painful are the debts that Malawians will still have to pay back to Exxim Bank of India after we borrowed billions to construct cotton ginning factories across the country.

Is Malawi’s dream to industrialise dead?

Pitt’s Button character says: “You can change or stay the same; there are no rules to this thing. We can make the best of it or the worst of it.”