[Tanzania] Cashew payment mode adopted for cotton

May 31, 2019

Mwanza. The government has announced a new payment system for cotton farmers as one of the steps towards overhauling the sub-sector that employs about 500,000 farmers across the country.

Prime Minister Kassim Majaliwa

Under the new system – which was formally announced by Prime Minister Kassim Majaliwa on Wednesday – farmers will be required to open a bank account into which their payments will be made. 

This is how payments are routinely made to cashew nut farmers in Mtwara, Lindi, Ruvuma, Coast and Tanga Regions. 

However, it will be a novelty for cotton farmers who are used to being paid cash on the barrelhead for their produce. 

Prime Minister Majaliwa informed stakeholders in the cotton industry that other cash crop farmers will also be paid through the same system. 

Under the new system, Agricultural Marketing Co-operative Societies (Amcos) will be responsible for coordinating the buying and selling processes on behalf of their members.

“The government will take the responsibility of convincing the banks to facilitate banking operations for farmers,” said the premier. 

Mr Majaliwa said that the electronic payment system will guarantee financial security for both farmers and traders, as they will no longer need to carry cash with them. 

The meeting was attended by the deputy minister for Agriculture, Mr Innocent Bashungwa who said that cotton production this season is expected to reach 450,000 kilos compared with 222,000 kilos in the last harvest season. 

Mr Marko Mtunga, the Tanzania Cotton Board (TCB) director general, said the board is implementing a number of strategies intended to increase cotton production in the country. 

The goal, he revealed, is to reach 800-to-1,200 kilos an acre, up from the current production of 200-300 kilos. 

However, the Itilima District agricultural officer in Simiyu Region, Mateso Paul, told The Citizen over the ’phone that the newly-instituted electronic mode of payment will not readily go down well with many farmers – especially considering the nature of the exercise. 

He said cotton could not be compared with tea or cashew nuts as these two cash crops take long to market. This is unlike cotton, whereby farmers sell their produce immediately after harvesting. 

Processing of their payment after every sale would have many complications. Initially, farmers signed contracts with prospective buyers who then provided them with inputs, including pesticides. 

This modality was later halted by government which said it was adversely affecting farmers’ incomes, while unduly benefiting the buying companies. 

A cotton farmer in Misungwi District, Elikana Elia, said there was no standardized mode of cotton farming which would force farmers to open new bank accounts every harvesting season. 

He also expressed concern that the system could be to the disadvantage of unschooled farmers. 

According to Prime Minister Majaliwa, cotton production in the 2018/2019 harvest season was 222,000 tonnes – an amount that is projected to reach 450,000 tonnes in the next harvest season.

By Jonathan Musa

Source: The Citizen Tanzania