Forex joy for tobacco farmers …Growers to get 50 percent earnings in US$

Source: Forex joy for tobacco farmers …Growers to get 50 percent earnings in US$ | The Sunday Mail March 17, 2019

Tanaka Nyambo

The 2019 flue-cured tobacco selling season opens this week amid high expectations the golden leaf will hit the US$1 billion point in total revenue with authorities further confirming farmers will receive half of their earnings in United States dollars.

Last year, the crop surpassed the 2000 record of 236 000 kilogrammes ending at 241 000kgs and raking in US$920 million, with grower earnings being US$700 million and US$220 million for exports.

The Sunday Mail has established that Government will allow tobacco growers to retain 50 percent of their sales in United States dollars with the other part being credited into their RTGS$ accounts.

The payment arrangement is likely to bring joy to the farmers following earlier reports that Government would allow them to get only 20 percent of their earnings in United States dollars.

Farmer organisations had sought the foreign currency retention level be pegged at 60 percent.

In a joint statement, the Reserve Bank of Zimbabwe governor Dr John Mangudya and Tobacco Industry and Marketing Board (TIMB) chief executive officer Dr Andrew Matibiri said small scale tobacco farmers would be entitled to retain their foreign currency as free funds in their accounts.

“The Reserve Bank of Zimbabwe has put in place measures to ensure that tobacco growers who are going to sell their tobacco during the 2019 marketing season, are paid within the shortest possible time,” said Drs Mangudya and Matibiri in the joint statement.

“Tobacco growers shall be paid 50 percent, after deduction of the USD loans, in United States dollar, and the proceeds shall be deposited in the growers Nostro FCA bank accounts.

“The balance of 50 percent of the net sale proceeds shall be credited into the grower RTGS$ bank account

“Small-scale tobacco growers – with two hectares and below of the crop – are entitled to retain sales proceeds in the Nostro FCA for an indefinite period as free funds.”

The authorities said large scale growers would only retain their foreign currency in FCA’s for 180 days after which the bank balance shall be offloaded into the market at the ruling interbank exchange rate.

In a bid to assist the growers access cash for incidentals at points of sale, the farmers will be entitled to cash withdrawals equivalent to 50 cents per kg of tobacco sold, up to a maximum $300.

Tobacco grower registrations for the 2019 marketing season increased by 46 percent from 116 525 farmers in 2018 to 169 772, according to statistics from TIMB.

Of the registered growers, 41 021 are new.

TIMB states that 95 950 communal farmers registered to grow tobacco this season, while 55 573 were from the A1 farmer category.

There are 9 677 registered A2 farmers while 8 572 are small-scale growers.

About 102 800 hectares were put under the golden leaf this season.