Riots rock auction floors

ANGRY tobacco farmers yesterday barricaded some auction floors, blocking both buyers and auctioneers from accessing the floors as tempers flared over the biting cash shortages and poor buying prices.

Source: Riots rock auction floors – NewsDay Zimbabwe May 7, 2016


The farmers were protesting failure by banks to pay them on demand due to the cash crunch being experienced across the country. The cash shortages have forced government to introduce bond notes valued at $200 million as the demand for the United States dollar continues to surge amid dwindling supply.

The move was, however, facing stiff resistance as many people were afraid the government was bringing back the Zimdollar through the back door.

But Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said the introduction of bond notes was meant to stimulate local production and exports; mitigate against externalisation of capital; discourage smuggling and motivate quick remittance of funds.

The chaos at the auction floors was compounded by a RBZ directive capping withdrawals at $1 000 a day.

Mangudya, however, said the RBZ had lifted the cap on tobacco farmers as they were critical to the production sector.

Karoi farmer Enock Mararahanda, who by yesterday had been stranded at Tobacco Sales Floor (TSF) for four days, said he was part of the people who earlier “rioted” at Boka Tobacco Auction Floor (BTAF).

“We felt it was better to stop trade because I have been failing to get paid for five days after selling my tobacco.

I was being forced to sleep in the car borrowing money from other people just to fund for my survival here,” he said.

The farmers said they were on the verge of recording huge losses due to unbudgeted for expenses including food at a time the golden leaf was fetching poor prices due to unscrupulous middlemen who were allegedly corruptly pegging prices.

BTAF operation director Moses Bias confirmed the riots, but said it was not their fault, but there was a lack of communication to the farmers on the new RBZ policies. “The farmers had not received the information from RBZ of the withdrawal cap and with most of them having cheques of over $1 000 and then failing to withdraw that money, it became an issue,” Bias said.

“We had a meeting with our regulator and RBZ in the morning and came to a solution. The RBZ has since lifted the cap for tobacco farmers and they can now withdraw up to $1 000 a day.”

Another farmer, Synodia Katembenuka (60), who is diabetic, was not amused by the payment system and urged government to revisit the new regulations forcing farmers to receive payments through banks.

“I have been farming tobacco for the past nine years and it’s a very cumbersome job. One expects reward at the end of the day and not pain, this system makes banks rich and rip off the farmer who is now forced to endure cold weather for over four days waiting for payment to be processed,” Katembenuka said.

TSF executive director Peter Mujaya said the challenges faced by the farmers were beyond their control as they emanated from a “national cash crisis”. He said the firm was assisting farmers the best way it could.

“Our responsibility ends when we transfer the money into the account of the farmer and we have done that. Our duty is to abide by the law as given to us by the regulator and we are doing just that,” he said.

Some farmers were unhappy as their tobacco was being bought for as little as 50c per kg and accused auctioneers of corruption.

“If you don’t pay some kickback, you are rest assured your crop will sell at anything below $1,99 and this is very painful for us after all this hard work and at the end of the day you are forced to pay the kickback,” Tawanda Tirivanhu of Macheke said.

Bias said although he had received such complaints, they had discovered that the price was in line with the quality of the leaf.
“Tobacco sells itself and if the quality is good, one can fetch up to $4,99, and if it is not, then you can get as low as a $1, and for those who have complained, we have checked and found no anomaly,” he said.

Efforts to get a comment from tobacco industry regulator Tobacco Industry Marketing Board were fruitless as chief executive officer Andrew Matibiri’s cellphone and landlines went unanswered.