Thursday, March 31, 2016

Zimbabwe Farmers Expected to Rake in $700m
March 31, 2016
Elita Chikwati and Brenda Ziga
Zimbabwe Herald

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.

EDITORIAL COMMENT: Let’s protect our tobacco farmers

March 31, 2016
Opinion & Analysis

AS the tobacco selling season, an annual phenomenon on the domestic economic calendar, starts, we trust there has been meticulous planning to ensure everything will be flawless.

Tobacco has grown to become an integral part of the socio-economic fabric of this economy, earning the country millions and transforming lives of farmers in a profound way.

Although production is this year anticipated to be 20 percent lower due to the effects of drought and low prices last season, all things being equal we should still earn well over half a billion dollars.

This, therefore, makes tobacco the single biggest foreign currency earner for Zimbabwe, if mining is regarded in terms of individual minerals, that way gold and platinum come a close second and third.

This means that tobacco is strategic to the wellbeing of the domestic economy and efforts to turn around the economy, driven by one of the success stories of the land reform.

As such, it goes without saying that as the marketing season has started, it must be all systems go and we expect little to no hitches to be encountered, especially by the farmers.

At this point, we applaud measures taken by the Tobacco Industry and Marketing Board to improve security by restricting entry into auction floors, allowing only bona fide farmers on to the floors.

In the past, farmers cried foul after losing their crop to crooks, including unscrupulous middlemen who buy tobacco from farmers at low prices and resell it at much higher prices.

It is our fervent hope that this year we will not hear the same old story of the nuisance of these middlemen, a cancer that may not just prejudice farmers, but could destroy the industry.

We are already aware that the small size of hectarage put under crop this year and expected yield, lower than the 198 million kilogrammes sold last year, are partly due to farmers who have decided not to grow the crop this year, angered by low prices last season.

It is our belief that there will be no connivance between officials, buyers and middlemen at auction floors meant to manipulate prices to the detriment of our farmers.

Tobacco farming is now serious business; farmers either borrowed or used their hard-earned savings to be able to return to the fields and should therefore be duly rewarded for their sweat.

It must be remembered that those who borrowed need to repay to get more loans in future.

It is against this background that we also hope all measures put in place are water tight, effective and conceived to ensure optimal benefit for farmers and also s return for buyers.

But in order to sustain the future of tobacco farming, it is crucial to guarantee mutual benefit.

It is paramount that farmers will be paid a fair price that is proportionate to the quality and quantity of their crop.

It was heartening to learn from Agriculture, Mechanisation and Irrigation Development Minister Dr Joseph Made that this year’s crop is generally of very good quality.

As such, there should never be unsubstantiated claims of poor quality crop designed to justify ridiculously low prices for the sole intention of ripping off farmers by paying them peanuts.

The middlemen, also known as Class B buyers, have hitherto caused havoc and ripped off unsuspecting farmers, including through false promises to influence high prices on the floors.

We also implore officials to ensure farmers are not inconvenienced by new systems, especially the need for all farmers to open bank accounts into which their money will be deposited.

It must be seen that the new requirement that farmers have bank accounts achieves its objective of financial inclusion, security for farmers’ earnings and creating track record for bank loans.

This will help the farmers from impulse buying and overspending helping them to plan for next season than a situation where proceeds from tobacco are wasted on luxurious gadgets.

We implore our farmers to be on the lookout for unscrupulous middlemen seeking to rob them of their earnings from the sale of the golden leaf having toiled for the entire season.

Farmers must shun temptations to engage in illegal activities. They should remember that the earnings from tobacco should be used for future investments and meeting the needs of their families.

Let us protect the goose that lays the golden eggs.

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