Tanzania Cotton Board Annual Report 2011

Tanzania Cotton Board Annual Report 2011

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, 2011.
In brief, the report provides an assessment on the operational performance for the year, challenges facing the Board and suggestions on the ways to be employed to make our
operations more effective in achieving the intended mission. 

Year 2010/11 recorded an upturn in the prices of cotton in the world market after the global financial and economic crisis that started in late 2008, which had major effect to
America and EU countries economies. After the developing cotton producing countries like Tanzania suffering from the effects of the economic crisis in the previous season after which the Government of Tanzania has to intervene with the rescue package which facilitated TCB to receive 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. This season indicative farm gate prices was Tshs 600 but the prices continued to go up during the
season jumping up to 800 and 1200 per kilo of seed cotton in some areas at the end of the marketing season.

This season recorded low production as we managed only to collect 163,517 tons of seed cotton compared to 267,004 recorded in the previous season this has a bearing from the low prices recorded in the previous season as most of them producers lost interest in putting much efforts in cotton production which made only 882,540 acres put into cultivation of cotton compared to 1,011,035 acres cultivated during 2009/10 season 

During the period under review, the operations of the Board (TCB) were financed by way of Government subsidy TZS 1,188,655,654 and internal sources of TZS 1,059,530,881 (which included rental income TZS 630,973,778 from investment property, regulatory income TZS 61,592,272 and other income TZS 366,964,831 from other operational activities) making a total of TZS 2,248,186,535 whereas total operating expenditure was TZS 2,634,980,532, thus leaving a net loss of TZS 386,793,997. 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.

As I have said above the low level of production recoded was partly attributed to low prices in the previous season but low production growth of the cotton industry continued to be affected by a number of challenges including the following:-

• Inadequate extension services which limit productivity to only 750 kilograms per hectare as compared to the world’s average of 2000kg/ha.
• Poor cotton quality;

• Continued inadequate local processing of lint into textiles and apparel;

• Low level of expenditure in research development activities;

• Poor infrastructure in particular feeder roads and cotton storage facilities at village level;

• Inadequate resources for the TCB to spearhead issues of cotton promotion and development;

A number of steps have continued to be taken to alleviate the problems, among them include the following: -

• Finalise the introduction of contract farming for cotton, an arrangement which has been piloted in Musoma and Bunda districts since 2008/09 and some parts of Bariadi district in 2009/10 farming season respectively so that this starts in all cotton growing areas come season 2011/12

• Continuing with a program that helps in conservation agriculture and development of a strong textile sector financed by Gatsby Trust Foundation of UK with the eventual intent of increasing productivity and value addition.

• Creating an enabling environment for the basic farmers in preparation of the introduction of the contract
farming by strengthening their Cotton Growers Association through the Cotton Development Trust Fund
A strong political will and support from all players at all levels to meet the challenges facing the industry are
the only vehicles to sail us through.

Finally, I would like to thank my fellow Members of the Board of Directors for their invaluable support and advice towards realization of the Boards assigned objectives during the past year. Many thanks are to TCB Management and Staff who have worked diligently and tirelessly to make it possible for the Board (TCB) to accomplish its planned commitments during this period though with limited resources. The Board is grateful to the Ministry of Agriculture, Food Security and Cooperatives for steady guidance and support to the operations and activities of the TCB. Last but not least, the cooperation offered by Cotton Ginners, Farmers and other stakeholders in the
cotton industry is enormous and highly valued.

Hon. Dr Festus B. Limbu (MP)