The Zimbabwe Farmers Union (ZFU) is appealing to the government to peg cotton prices in United States dollars in order to cushion farmers against the reduction in RTGS dollar value.
Cotton prices have remained unchanged since the start of the selling season in May.
ZFU president, Paul Zakariya said cotton should be pegged in US dollars so that farmers are paid at the prevailing interbank market rate since RTGS$1.95/kg has become unsustainable.
“Few months ago, cotton was pegged at RTGS$1.95 which was about US$0.63 per kg but with the passage of time the value has been eroded. As of Monday (today) the US dollar value without any other factors considered had gone down to 33 cents. We suggest that the cotton price be set in US dollars,” he said.
Cotton is sustaining about 400 thousand families backed by funding under the Presidential Free Inputs Scheme.
The government recently reviewed the maize producer price and pegged it at US$242 per metric tonne payable to farmers in RTGS dollars based on the prevailing foreign currency interbank market rate following another review in April.