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Friday, February 23, 2024

Cultivating cotton in South Africa more profitable

Cotton production in the North West ( South Africa) has emerged as a viable alternative to maize and soya bean, as its profitability exceeds that of maize and soya bean despite cotton’s extremely high input costs.

South African farmers term cotton the ‘white gold’ of dryland crop production in SA. They say the cotton plant has a strong and penetrating taproot system, having an astonishing ability to extract moisture from the soil and survive excessive heat and drought.

The producer price for dryland seed cotton in areas of the North West, such as Schweizer-Reneke, stood, at R12 000/t, compared with the maize producer price, which hovered at R3 200/t and soya bean at R8 000/t at a yield obtained under dryland conditions.

Cotton, the production costs for cotton in the 2022/23 season increase to R22 620/ ha, compared with R16 000/ha for maize and R10 000/ha for soya bean. In the case of cotton, it means a profit of R18 179/ha, compared with R3 200/ ha for maize and R14 000/ha for soya beans.

One of the top benefits of the South African cotton price is that it is coupled to the international NY futures dollar price. Moreover, the demand for the crop outweighs the supply by far, which adds markedly to the advantage of cotton production compared to other rotational crops such as maize and soya bean. Cotton prices do not fluctuate between export and import parity like maize and soya bean, which are produced in surplus, and cotton is thus able to be exported profitably.

Added bonus is that cotton is able to withstand the extreme drought and heat conditions to which North West is regularly exposed to.  A cotton plant has an outstanding ability to extract moisture from the soil with its strong and penetrating taproot system.

Local farming experts say cotton is a priority crop in the North West and should be planted in rotation with maize and soya bean. Maize planted in lands that were previously planted with cotton shows yields that are markedly better than when maize is planted in monoculture or even in rotation with soya beans.

Small-scale cotton production also requires relatively low start-up capital if land preparation, fencing and input costs can be funded by the government, making it an ideal rotational crop for small-scale growers. Where cotton is farmed in a small-scale setup, it creates 1,35 jobs/ha and provides short-term job opportunities for the manual handpicking of cotton during the harvest season.

A second-hand cotton picker in good condition, imported from the US, goes for as much as R10 million. Experts nonetheless say that the return on investment is high and mechanisation costs should consequently not be seen as a stumbling block.

Not only is cotton stover an ideal food source to support cattle on, but cotton is not easily stolen and carted away. Crop theft and theft of agricultural chemicals have become nearly endemic in North West, a reality most crop producers have to deal with virtually on a daily basis.

Dr Annette Bennett, Cotton South Africa CEO, says cotton is the only fibre crop that is edible and also used in textiles. Cotton he says is sustainable, renewable, biodegradable and carbon-neutral. It prefers dry, hot, desert-like production conditions but is susceptible to frost. But by the time frost comes, the crop must have reached maturity, which emphasises the importance of the planting date.

All cotton cultivars planted in South Africa express bollworm resistance due to two Bt-genes in stack gene formation (Bollgard 2), combined with herbicide tolerance expressed by the Roundup Ready Flex trait, which provides glyphosate resistance.

Most of the South African cotton is sold through marketing pools. This is more popular with farmers because it offers substantial economies of scale in marketing. According to this arrangement, each ginner pools the producer’s cotton into larger lots and manages the marketing of the pool’s cotton. The ginner uses the size of the marketing pool to negotiate suitable premiums for cotton.

The main advantage of the marketing pool is that it offers a form of price risk management since each producer will receive the average price achieved by the entire pool, adjusted for the quality delivered, and the farmer does not have to worry that his or her particular cotton was sold when the market price was lowest.

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