Farmers expected to rake in $700m

Farmers expected to rake in $700m | The Herald March 31, 2016

Elita Chikwati and Brenda Ziga
THE tobacco auction floors opened on a high note yesterday with the first bale fetching $4,50 per kg, which is an increase of 21 percent on last season’s opening price of $3,50, raising hopes the lucrative crop will generate millions of dollars in foreign currency and put smiles on the faces of thousands of farmers.

Although volumes of tobacco are expected to be lower this year due to the El Nino-induced drought, farmers are optimistic their earnings will be higher than the previous seasons as buyers compete for the high quality but scarce commodity.

If the expected 160 million kg is auctioned at an average price of $4,50 per kg, then farmers are likely to pocket over $700 million compared to the $580 million they earned from selling 198 million kg last season.

However, as usual, scrap tobacco fetched low prices as little as $0,11 cents per kg yesterday while those who brought good quality tobacco pocketed as much as $4,50 per kg.

Farmers expressed mixed reactions to the prices offered by buyers, with those with low quality crop complaining and threatening to withdraw it while the ones who got good prices celebrated.

Officially opening the marketing season at the Tobacco Sales Floor yesterday, the Minister of Agriculture, Mechanisation and Irrigation Development Dr Joseph Made, said tobacco merchants were this season likely to pay fair prices for the crop that would enable farmers to have sustainable income to take them back to the field.

“Government views tobacco as an anchor crop for the economic empowerment of our farmers and as an engine for rural development. Every year, at this time, tobacco farmers after having toiled for over 12 months look forward to getting a just reward for their efforts.

“It is therefore expected that tobacco merchants will pay fair prices for the tobacco to enable farmers to have sustainable returns. The expectation is that buyers will match quality tobacco with high prices at both auction and contract floors. Farmers deserve better prices for them to re-invest in tobacco production this coming season,” he said.

Dr Made urged growers to use the recommended agronomic practices to improve both the chemical and physical integrity of the crop. He raised concern over the issue of corruption, that had become rampant and was being promoted by some people within the tobacco industry.

“I instruct TIMB in collaboration with ZRP as well as other security organs to be vigilant and curb these detestable practices,” he said.

This season, the Reserve Bank of Zimbabwe introduced a new payment system for tobacco farmers, where they will no longer get cash, but paid through bank accounts.

Most farmers welcomed the development and said it would ensure they do not lose money to thieves and conmen while others felt they should be given a choice to choose the convenient method for themselves.

Others complained that they did not have banks in their farming areas and were also restricted to withdrawing a maximum of $1 000 per day.

The farmers called on the central bank to ensure the banks did not introduce many charges for transactions as the system would become expensive for them.

The new payment system has also affected traders from the informal sector who used to benefit from the tobacco farmers.

They said they had prepared adequately for the tobacco marketing season, but were no longer sure if they would get to their targeted income as the farmers would no longer spend their money at the floors.

TIMB chairperson Mrs Monica Chinamasa said the proliferation of corruption and illegal activities at the tobacco selling points was disturbing.

“Nothing will unlock the tobacco sector’s potential more than ending the cancer of corruption at the selling points. Corruption is draining millions of dollars from the growers. This money could be used by growers to further investments in tobacco growing.

“It cannot be accepted to coerce a grower to pay a bribe just to facilitate sales as this undermines the integrity of the tobacco industry. The most powerful antidote for stamping out corruption is for stakeholders to work together for a common action. TIMB will establish a hotline for reporting any corrupt activities as well as placing suggestion boxes at all selling points and I urge everyone to make use of the facilities and report any issues related to corruption,” she said.

TIMB licensed three auction floors, namely Premier Tobacco Floors, Boka Tobacco Floors and Tobacco Sales Floor. The board also licensed 16 contractors.