Private ginners are pooling more resources than the government to fund cotton production in the country,, according to the Auditor General’s Report for the financial year 2021.
Cotton production, processing, and marketing in the country is monitored by the cotton Development Organization-CDO, an organization set by an Act of Parliament in 1994. But for more than a decade, the Private ginners under their umbrella body Uganda Ginners and Cotton Exporters Association (UGCEA), have been largely supporting cotton production activities through funds voluntarily pooled by its members.
According to the Auditor General’s report, 19.6 Billion Shillings was budgeted to cater for the cotton marketing season in the financial year 2020/21 out of which, 15.15 billion was budgeted towards the provision of planting seed and production inputs. However, the report adds that the government was able to contribute only 8.6 billion Shillings, leaving the balance for the private partner intervention.
The Auditor-General observes that leaving the bulk of the budget for the private sector “is an indication that government is relying more on the ginners to fund the cotton sector.” The report also indicates that despite the intervention of the private sector, there were shortages in the provision of inputs to farmers which directly affected the performance of the sector in achieving the desired cotton production targets.
For instance, a total of 866 Metric tons of planting seeds, 374.6 Metric tons of fertilizers, and 2,260 spray pumps were not provided to cotton farmers as projected in the strategic plan despite the support from the private ginners.
“Dependency on the Private sector for a key production activity such as the provision of seed for planting and production inputs, risks the sustainability of the sector and enables the private sector to exercise influence over farmers through paying of low prices for the farmers’ crops,” says the Auditor General.
The Auditor-General notes that inadequate government funding limits CDO’s interventions in key aspects such as targeted extension services for mobilizing farmers and training them on cotton agronomical practices. The Auditor-General also notes that cotton production dropped significantly from 173,457 bales of lint in the financial year 2019/20 to 50,709 bales in the year under review.
This was largely attributed to heavy rains, meager funds for procurement and distribution of production inputs as well as provision of extension services.
Jolly Sabune, the Chief Executive Officer of the Cotton Developement Organisation acknowledges the low funding by the government to the cotton sector but disputes the auditor’s report on the price influence of cotton due to over-dependence on private ginners. Sabune says that the private sector funding of cotton production has nothing to do with the low prices adding that prices of cotton are determined by the international market prices.
She says the country adds value to only seven percent of its cotton export leaving determination prices to the international market.
“We are price takers, the ginners funding the cotton production has nothing to do with prices that are finally announced and paid to the farmers, it’s what China and America determine are going to do that determines the prices,” She told Uganda Radio Network in an interview.
Sabune says the limited funding by the government is due to other competing priorities that the government is investing in. She however notes that it would be good for the government to invest more in the cotton sector in the areas of research, cotton varieties, and technology among others.
Douglas Bhosopo, the seeds inspector at Uganda Cotton Ginners and Exporters Association says there is a need by the government to intervene in adding value to cotton produced in the country. Bhosopo says the government should partner with stakeholders that can add value to the cotton produced in the country.
He notes that if cotton produced goes through value addition, the prices of cotton will be stable and motivate more farmers to join the sector.
Bhosopo, however, says as long as the country doesn’t add value to the cotton, powerful countries producing cotton in bulk will keep dictating the prices of cotton, leaving farmers at losses.
Cotton remains the country’s third-largest export crop after coffee and tea. Some 250,000 households in the country depend on cotton as a source of their income.
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