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RIMAIAgribusiness SchoolMy land

Module 12 · M15 Fibre and Leather

Cotton and Hemp

Can cotton, or industrial hemp where the law allows, earn a reliable income on my land, and how much of the value can I keep?

Open T-M15-01Next: M16All Majors
A shearing shed, sheep, cotton bushes and hides drying on a rackSHEARING

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Cotton is a drought-tolerant cash crop grown largely by smallholders under contract to ginners. Its price is set on world markets and its value is mostly captured after the gin. Hemp is a newer fibre and oil crop whose future depends on the law. This Major teaches the student to judge both on the price actually paid at the farm gate.

Cotton and Hemp: the product, the five stages of the business, the unit it is sold by and where it is producedCotton and Hemp: how the business runsSold bykg of seed cotton per hectare1Plant2Grow3Pick seed cotton4Gin5Lint and seed cakeZAZWZMBWNAProduces commerciallyImports most needsZA South Africa, ZW Zimbabwe, ZM Zambia, BW Botswana, NA Namibia

U1. The industry and where it grows

Article 95 records South Africa’s cotton gross value of production at only around R242 million in 2011/12, a sector held back by world prices depressed by subsidies to growers in rich countries. Article 98 describes hemp as a crop waiting for the law to catch up.

Zimbabwe’s seed cotton output rose 33% to 38,500 tonnes in 2025/26, and national intake reached 28.7 million kilograms by 19 August 2026, with Cottco holding a 42% share. Zimbabwe’s peak was over 350,000 tonnes in the 2010/11 season. Zambia has a contract-based smallholder cotton sector. Zambia produces about 55,000 tonnes of raw cotton a year and exported US$25 million of it in 2022. Botswana now licenses industrial cannabis with a THC ceiling of 0.7%, with two licensed companies running pilots in 2026, and Namibia has no gin of its own, so its seed cotton is ginned in South Africa.

U2. Market structure and prices

Seed cotton is bought by ginners, usually under contract, at a price per kilogram by grade. Zimbabwe set 2026 minimum seed cotton prices of US$0.43 a kilogram for Grade A, US$0.41 for Grade B, US$0.38 for Grade C and US$0.35 for Grade D, and all contractors paid a uniform US$0.35 during the 2026 season. Prices follow the world lint price and the exchange rate.

U3. Imports and exports

Cotton lint from the region is mostly exported to Asian spinning mills. Article 96 calls the export of raw lint a leak, because the spinning, weaving and garment jobs happen elsewhere. Article 97 shows how South Africa’s textile industry shrank under import competition, reducing local demand for lint.

U4. The value chain and who buys

Cotton and Hemp value chain: stages from inputs to the consumer, who operates each, where the margin is taken, where a small farm enters and who buysCotton and Hemp: the value chain and who buysFollow the product left to right. Ochre shows where most of the margin is taken. Green shows where a small farm can enter.1ContractorSeed and inputson credit2FarmGrow and pickseed cottonMOST OF THE MARGIN3GinLint from seed4SpinSpinners takethe lint5SeedOil and cakeexpressers6ConsumerTextiles, oil,feedYour entry pointGrow under contract; the contractor who supplied the inputs is almost always the buyer.Buyers you can reachThe input contractor and ginner; oil expressers for seed.

Contractors supply seed and inputs on credit, farmers grow and pick, ginners separate lint from seed, and lint goes to spinners while seed goes to oil expressers. Article 106 shows that cottonseed oil and cake can keep a farm solvent in a bad lint year. For a smallholder, the buyer is almost always the contractor who supplied the inputs.

U5. Market access and barriers

Contract terms decide access: the farmer must sell to the contractor that financed the crop, and side-selling breaches the contract. Grading rewards clean, dry, uncontaminated cotton. Pests such as bollworm demand regular spraying. Hemp requires a licence and is governed by rules on the plant’s THC content, which differ by country and are changing.

U6. The entry route

Real minimum capital. Modest: seed, fertiliser and pesticides are usually supplied on credit by the contractor; the main cost is labour for weeding, spraying and hand-picking.

Input choke points. A contract with a reputable ginner, timely input delivery and labour at picking.

Offtake options. The contracting ginner; in Zimbabwe, Cottco and private contractors.

Who to call. In Zimbabwe, the Agricultural Marketing Authority and cotton contractors. In Zambia, cotton ginners and the cotton regulator. For hemp, the national licensing authority.

The verdict for a small holding. Contract cotton is a low-capital, low-margin crop suited to dry areas where little else pays, best grown as part of a rotation. At US$0.35 a kilogram the student must check carefully that yield covers labour. Hemp is a licence-first opportunity to watch rather than to plant.

The South African benchmark and your market

Market Position Latest data-layer reference
South Africa Small cotton sector GVP about R242 million (2011/12 baseline)
Zimbabwe Smallholder contract cotton recovering 38,500 t seed cotton (2025/26); minimum US$0.35-0.43/kg (2026)
Zambia Smallholder contract cotton Raw cotton production, annual: 55,000 t (2024), 3 figures (LIB-C-ZM-CottonHemp)
Botswana Minimal THC ceiling for licensed industrial cannabis: 0.7 % (2025), 2 figures (LIB-C-BW-CottonHemp)
Namibia Minimal Local cotton gins (seed cotton ginned in South Africa): 0 gins (Current), 2 figures (LIB-C-NA-CottonHemp)

Apply it to your land

Build the cotton budget in T-M15-01 Enterprise Budget using the contractor’s price and input deductions, and check that the yield covers labour at the minimum price. Test small-scale processing of seed into oil and cake in T-M15-02 Processing Margin, and compare prices in T-M15-03.

Dictionary terms introduced

Code Term Plain meaning
D-seed-cotton Seed cotton Cotton as picked, before the lint is separated from the seed
D-lint Lint The cotton fibre after ginning
D-ginnery Ginnery A plant that separates cotton lint from seed
D-cottonseed-cake Cottonseed cake The protein feed left after oil is pressed from cottonseed
D-industrial-hemp Industrial hemp Cannabis varieties with very low THC grown for fibre, seed and oil

Calculators: T-M15-01 Enterprise Budget, T-M15-02 Processing Margin, T-M15-03 Market Price Comparator.

Library sources: LIB-A095, LIB-A096, LIB-A097, LIB-A098, LIB-A106; LIB-P-Cotton, LIB-P-Cotton-IP, LIB-P-Hemp; LIB-C-ZW-CottonHemp, LIB-C-ZM-CottonHemp, LIB-C-BW-CottonHemp, LIB-C-NA-CottonHemp.