Tanzania Cotton Board Annual Report 2010

On behalf of the Board of Directors of the Tanzania Cotton Board (TCB) it is my pleasure to present the Annual Performance Report for the financial year ended 30thJune, 2010. In brief, the report provides an assessment on the operational performance and challenges facing TCB and suggestions on how it can achieve its intended mission.
 
The year 2008/09 witnessed a downturn in the prices of cotton in the world market due to global financial and economic crisis that began in late 2008, which had major effect to America and EU countries economies.
 
The developing cotton producing countries like Tanzania suffered most so during the year TCB received Government Cotton Price subsidy to the tune of TZS 20 billion to assist farmers for the low cotton prices as a result of the impact caused by the global financial crisis. TZS 19,440,173,866 has been paid out in this financial year. 
 
The remainingbalance of TZS 556,826,134 is held in Cotton Price Subsidization Account.
 
Also part of the Cotton Insecticide Subsidy which was provided by the Government in 2008/09 (to the tune of TZS 2.0 billion) was utilized in this season to reduce the price of insecticides from TZS
3000 per acre pack on 1,202,772 acre packs of EC formulation to TZS 2,100 and ULV from 5,500 to 4,600 per litre on 99,718 litres. The remaining balance of TZS 827,759,000 is retained by the Board
awaiting Government decision on its utilization.
 
Limited financial support from the Government and inadequate revenue from internal sources continued to prevail in the period under review, thus making it difficult for TCB to meet many of the
challenges facing the country’s cotton industry. Monitoring of marketing operations and cotton quality using the workforce of only about 60 employees continued to be an insurmountable task taking into
consideration the number of over 8,000 buying posts and 43 ginneries to be monitored.
 
During the period under review, the operations of TCB were financed by way of Government subsidy of TZS 1,450,088,884 and internal sources of TZS 826,420,997 (which included rental income of
TZS 407,338,604 from investment property, regulatory income of TZS 84,817,585 and other income of TZS 334,264,808 from other operational activities) making a Total of TZS 2,276,509,881 whereas
total operating expenditure was TZS 2,063,103,861, thus leaving a net surplus of TZS 213,406,020.
 
As usual the developmental and promotional activities continued to be financed by voluntary contributions from cotton stakeholders as per Public Private Partnership Agreement of 2006 under
the Cotton Development Trust Fund.
 
The 2009/10 farming season experienced unfavourable weather conditions coupled with introduction of new system of input distribution all adversely affected the crop yield in this period. As a result,
cotton production plummeted from last year’s production of 368,697 tons to only 267,004 tons. 
 
Apart from low production growth of the cotton industry continued to be affected by a number of challenges including the following:-