An investigation into the nature, extent and effects of side marketing of cotton by contract farmers on company’s perfomance: a case of the Cotton Company of Zimbabwe

Abstract

The study seeks to carry out an investigation into the nature, extent, and effect of side marketing of cotton by contract farmers in Zimbabwe, the investigation was carried out at the Cotton Company of Zimbabwe which is one of the companies in the cotton industry. The cotton industry has been greatly affected by side marketing and many researchers have not gone deeper in analysing the nature and extent of side marketing though most researchers who researched in side marketing dwelt much in analysing the effects of side marketing and response to side marketing. Most of the studies carried out were done in other countries, the current study mainly focused on the Zimbabwean environment. In this study the researchers employed descriptive research design in the gathering of data. The instruments used are interviews and research questionnaires. The population who participated in this study are sixty members comprising nine senior managers, thirty one middle level managers and twenty low level managers. All these are employees of the cotton company of Zimbabwe. The researched data was analysed in the form of tables so as to get a clear relationship and correlating response trends and presented in the form of tables, graphs and pie charts. The research study has shown that the Zimbabwean cotton industry is affected by side marketing. Farmers have hatched ways of beating the companies systems to evade paying their obligation and resort to either sell to the contracting company using farmer details that did not draw down loans from companies, companies will only benefit on the cotton crop but do not recover their investment in terms of loans advanced. Some farmers resort to sell their cotton to companies who did not contract them depriving the contracting company of the cotton together with the loaned amounts. The study also brought out that the extent of side marketing of cotton in Zimbabwe is so huge to an extent that the cotton company of Zimbabwe once a blue cheap company is limping and had almost closed shop. The company incurred perennial losses that resulted in a negative return on capital. The company lobbied Government to regulate the industry which it did buy putting in place the relevant statutory instrument which is not being fully enforced. The researcher recommends that the company continuous lobby Government so that the statutory instrument is activated and enforced. The study also assisted in bringing out the need for Government to subsidise on the cotton industry as a whole so that the cotton sector is revived in full and cotton recover its former glory of being the white gold. The Cotton Company of Zimbabwe’s viability is under threat.