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23.09.2004 Disaster

Disaster awaits cotton farmers in the North this season

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Tamale, Sept. 23, GNA - Cotton, the only cash crop that has the potentials of reducing poverty among farmers in the Northern, Upper East and Upper West regions is now on the verge of collapse.

This follows the takeover of the Ghana Cotton Company Limited (GCCL) by D.J. Miller, a US strategic investor, which had not performed to the expectations of cotton farmers in the regions.

The D.J. Miller promised to improve services to farmers, their salaries and better conditions as well as injecting adequate capital to ensure prompt delivery of farm inputs.

Speaking to the Ghana News Agency (GNA) in an interview in Tamale on the state of the cotton industry in the North, Mr. Yaw Owusu-Adomah, General Manager of the company, said workers of the company had not been paid as at the end of August this year.

He said the company had been able to supply only 25 metric tones out of 500 metric tones of planting seed that the farmers required for the season. It has also failed to pay for land preparation and transport services and this had resulted in an outstanding bill of more than 4.5 billion cedis this season alone.

Mr Owusu-Adomah said fertilizer and insecticides had not been supplied to the farmers at the right time, while spare parts for the ginnery had not also been provided.

Mr Owusu-Adomah said the GCCL operations reached its peak between 1992 and 1997 and it was able to pay off all debts it owned to the Agricultural Development Bank (ADB) within that period. He said as the company was about to stand on its own, the world price of lint cotton fell from 1,600 US dollars per metric ton to 800 US dollars per metric ton, the lowest price in the history of the cotton industry.

The Manager noted that, as a result of this, ADB continued to finance the operations of the company until 2001, when it finally withdrew its support for the entire cotton sector.

"This left the company with no option than to finance its own operations through forward sale of its lint up to 2003 season. Under both systems of financing, 50 per cent of GCCL financial requirements were always made available by the start of each season" he said.

He said however that, events had proven that the situation in the cotton industry had reached a desperate stage that needed the government and other stakeholders' intervention to put sanity into the operations of the company.

Mr Owusu-Adomah said, "we ought to be moved by the plight of about 30,000 farmers, staff, stakeholders and their families whose lives are on the line", noting, "GCCL has become associated with the collapse of most small-scale businesses in the Northern, Upper East and Upper West regions".

He said a tractor owner in the Northern Region attributed his sickness and admission to the hospital to the stress that the GCCL had taken him through following the company's indebtedness to him.

The Manager noted, " disaster looms ahead of cotton farmers and other stakeholders of the three northern regions as seed cotton marketing starts in mid-November, a crucial period for this years elections" and urged the government to intervene to safe farmers from frustration. 23 Sept. 04

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