Enhancing competitiveness of Zimbabwe’s cotton production under contract farming

Abstract

This study was designed to assess the competitiveness of cotton production by smallholder farmers under contract farming in Zimbabwe and propose strategies for enhancing sector performance. Data were collected from secondary sources, key informant interviews and focus group discussions (FGDs). A multiple criteria analysis (MCA) was used to identify key constraints in cotton production. Cotton budgets were developed and a policy analysis matrix (PAM) was derived to assess the competitiveness of cotton farming. Key constraints identified were related to policy and institutional failure. Cotton production was found to be not competitive with an overall disincentive of USD-132.30/ha of cotton produced. The nominal protection coefficient output (NPCO) of 0.75 and nominal protection coefficient input (NPCI) of 1.5 indicate taxation in the product and factor markets respectively. The effective protection coefficient (EPC) of 0.5 indicates that the operating environment does not encourage production. To sustain cotton farming under contract farming, there is a need to strengthen private and public institutions to reduce behavioural uncertainties. Alternatively, financing of cotton production might need remodelling to incentivise banks to finance farmers directly through group lending and government guaranteed funding. Human capital development through farmer training programmes is recommended to enhance farm productivity.