The Cotton Council of Malawi (CCM) has revealed that farmers’ failure to repay loans is hindering growth of the cotton industry.
This was disclosed by CCM chairperson Patrick Khembo in Lilongwe on Wednesday.
Khembo said many smallholder farmers in the country fail to buy inputs to farm on their own and they always rely on loans to support their farming.
However, most of the times the small scale farmers fail to pay back the loans.
Khembo gave an example of last year when most farmers could not pay back the loans due to low yields.
He said cotton farmers in the country took a loan which was summing up to 2 billion Kwacha but unfortunately only 700 million kwacha has been given back and there is no hope that the farmers will pay back the remaining 1.3 billion Kwacha.
“The farmers took a loan amounting to K2 billion with the hope that they will be able to return it but for various reasons they have been unable to do so,” said Khembo.
He however admitted that some farmers willingly decide to default, a development which he said is worrisome.
Cotton is the fourth largest agricultural export after tobacco, sugar and tea, engaging over 300,000 farming families.