Ginners frustrate cotton fund
Some of the country’s cotton ginners are not remitting to the cotton fund despite continuing to buy cotton from farmers, Business Review has established.
The fund, introduced in the 2011/12 financial year with a cash injection of K1.6 billion, was aimed at boosting the cotton industry, regarded as one of the reliable sources of foreign exchange.
Cotton Development Trust (CDT) vice-chairperson Duncan Warren in an interview said buyers are supposed to remit about K50 million to the fund before they start purchasing the crop from farmers.
“There are three companies which are buying cotton and are yet to remit to the fund but I will only mention two. Companies such as Admarc[Agriculture Development and Marketing Corporation] and Mota-Engil are yet to remit to the fund and this might in the end frustrate the whole programme,” he said.
Warren said the issue will be high on the agenda when the cotton taskforce meets in Lilongwe.
“The Ministry of Agriculture is supposed to tell us why the three companies are continuing to buy the crop and yet they have not remitted the funds. This week, we will take them to task when we meet because this is a critical issue and it will be high on the agenda,” he said.
But Secretary for Agriculture Jeffrey Luhanga said he needed to inquire from those administering the fund before providing answers on why some companies are buying cotton without remitting to the fund.
“I do not know if other companies are buying cotton despite not paying fees to the fund, but I need to get more details from my officers on the ground,” he said.
However, technical consultant for Mota-Engil Austin Msowoya said the company is not part of companies which is supposed to remit money to the fund.
“It is true we are in the cotton buying business but we do not buy our cotton from farmers. We get our cotton from Admarc despite the fact that we are helping government in upscaling cotton production in the country,” he said.
Msowoya said Mota-Engil is growing cotton at Chipinda in Golomoti and this year, distributed 100 tones of seed to farmers as a contribution to the efforts government is undertaking in upscaling the cotton sector.
He said the company is buying 5 000 metric tones from Admarc this year and has since advised all the farmers who received the seed from the company to sell their cotton to Admarc as well.
Efforts to speak to Admarc general manager Jerry Jana proved futile, but Warren hinted that if Mota-Engil is purchasing from Admarc then the organisation must be in the forefront to pay the towards the levy.
Recently, Jana told the media that the construction of Ngara Cotton Ginnery in Karonga will increase Malawi’s capacity of cotton processing which could result in the country earning K6 billion from the crop annually.
