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The continuous criticism cotton producers and textile factories throw at each other regarding the very low price offered for locally produced cotton has led the Ministry of Industry to set the price.
Previously, the government imported cotton to fill the gap in supplies and to stabilize the price, but the new option encourages farmers to produce more and supply it to the textile factory at a fair price.
The textile factories, who are major buyers of local cotton, lament the inconsistent prices. Consequently, they were forced to change their production cost several times. Producers argue that the cost of labor, the high price of agriculture machineries, uncertainty in market, and weather conditions have deterred them from offering consistent prices to local producers.
The supply chain of cotton to market is also elongated resulting in lower earnings by farmers and channeling significant profits to brokers. Brokers buy a kilo of cotton under 30 birr from farmers and sell it to factories from 40 to 60 birr.
“It is right for the government to stabilize the cotton market,” Tadesse Haile, State Minister of Industry said at a meeting with cotton producers held at Ghion Hotel on February 9.
“We are aware of brokers who set the price of cotton randomly and that discourages textile factories which causes them to incur additional costs. If it has not been for that interference, we sometimes may experience cases where farmers produce plenty and find few buyers.”
So we have to mediate the situation by setting a price that is fair for both farmers and factories. And we don’t want to keep on importing cotton. We need all locally produced cotton to be consumed by our factories. And setting a price will help us realize that.”
Tadesse further noted that his Ministry is in discussion with stakeholders to draft a regulation prohibiting the involvement of brokers on the delivery line of agricultural products to the market, because that interference has significant impacts on the industry.
“Our agricultural products, especially those that are used as inputs for other industries, must be supplied at a fair price. Otherwise our effort to transform agriculture into an industry will face a big challenge. So we have to move the brokers who disturb the price. We only need producers and factories to deal with the products.”
According to Tadesse, his ministry commissioned a research on BT Cotton, one of the different genetically modified cotton variety that is reputed to rendering high yields. The industry ministry has submitted a draft bill along with a synopsis of the research for ratification by parliament.
“We need more cotton to maintain our growing industry, and using GMO is one of the alternatives to boost production,” he stated.
Though producers do not agree on the notion of shorter cotton supplies, the current bulk demand for cotton in Ethiopia is estimated around 100,000 tones while the supply is around 65,000 tones.
Second rate quality of local cotton, lack of modern agricultural methods, poor irrigation systems and shortage of labor hampered the cotton industry from expanding.
The Ethiopian Cotton Producers, Ginner and Exporters Association (ECPGEA) Vice President Abreham Tadesse criticized the government for not giving proper attention to the industry.
“There is 250,000 hectares of land available for cotton plantation but only 10 to 15 percent of it has been cultivated so far, and this shows underutilization of the resource,” the vice president corroborates his argument.
He argues that GMO cotton is not the solution to increase production. “We can still manage to scale up production without GMO cotton if government gives proper attention to cotton farming like it did to sugar farms.’’
Yet an agricultural researcher, Dr Million Belay, Capital requested to give scientific views on the issue opposes the Ministry of Industry’s plan to allow the use of BT Cotton.
Dr. Million Belay, Director of Melka Werer Agricultural Research Station told Capital, “the Industry Ministry tells us the experience of Sudan and other cotton producers who made a good production by applying BT Cotton, and they argue that the chemicals that are used to kill cotton pests demand more finance while BT Cotton has its own immune system to combat pests.”
“However, my institution disagrees as the condition in other countries and in Ethiopia is so different; the soil type and other related and relevant matters must be studied. No one gives an ear to our suggestion and the bill is in the final stages of ratification,” Dr. Million sadly commented.