Cotton is one of the most important cash crops in Malawi. It ranks fourth as a foreign exchange earner for the country after tobacco, tea, and sugarcane.
The objective of the Malawi government is to increase cotton production and improve quality in order to meet local demand and export any surplus.
Unfortunately, only smallholder farmers mostly grow this crop. The few large commercial farms that were growing the crop abandoned it due to its declining profitability.
Cotton has immediate potential to impact Malawi's overall growth for several reasons including the creation of more jobs if the integrated cotton textiles and garment chain is vibrant.
Secondly, there is capacity for Malawi to produce more than 100,000 metric tones of seed cotton by more than 200,000 farmers as long as there is conducive production and marketing environment.
For instance, during the 2002/03 growing season, the private sector through the Cotton Development Association (CDA) introduced a farm input subsidy program which resulted into a remarkable increase in seed cotton production.
One of the major challenges faced by cotton farmers is the low seed cotton farm gate price. In the early 2000, two small companies came in with the hope of increasing competition in the buying of seed cotton.
Unfortunately these companies instead of competing to buy seed cotton, they collude and in the process offer low farm gate prices.
The shrinking of the domestic textile industry since the 1990s also resulted into reduced domestic demand for cotton lint consequently leading into low production.
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