BY MTHANDAZO NYONI
TOBACCO contractors have failed to pay a significant number of farmers for produce delivered last season, the Tobacco Industry Development Support Institute for Southern Africa (TIDSI) has said.
In an interview with Standardbusiness, TIDSI executive director Jeffrey Takawira said it was sad that farmers had been forced to sell off assets including cattle to survive because their revenues were locked up somewhere.
He said government must clamp down on contractors who manipulate farmers, as laxity in policing these big corporations had resulted in tobacco farmers taking up to one year to receive their payments.
“We have contractors that are still to pay for last season’s crop,” Takawira said.
“Farmers are at the mercy of contractors and buyers. It should naturally worry the government that it’s now taking a full season or 12 months for tobacco farmers to be paid, yet they are regarded as an important forex earner for the country.
“Clearly, such contractors should have their licences cancelled. Some farmers have resorted to selling their cattle in order to raise funds to cater for labour yet they have funds still to be paid for the previous season. Surely, it cannot be business as usual.”
Tobacco is one of Zimbabwe’s biggest foreign currency earners, raking in millions of dollars annually.
At least 190 million kg of tobacco worth US$748 million was exported across the globe by the end of December last year, according to Tobacco Industry Marketing Board (TIMB) data.
The crop earned Zimbabwe US$733 million during the same period in 2019.
The TIMB said about 1 700 new farmers signed up to grow the golden leaf during the 2020/21 farming season.
Contract growers constitute 96% of those who planted tobacco this season.
Takawira said last year, the government ordered that tobacco farmers surrender 50% of their total earnings to the central bank.
The central bank would then pay them the remaining 50% in Zimbabwe dollars at the prevailing interbank rate.
However, farmers struggled to access the money from banks.
“The other 50% is accessed through local banks and this has caused a lot of discontentment amongst our farmers,” he said.
“The biggest challenge we have is a situation where negotiations are regarded as an event, not a process,” he said.
Last week, tobacco farmers’ associations tabled a series of demands that they wanted the Reserve Bank of Zimbabwe (RBZ) and industry regulator TIMB to address before this year’s marketing season kicks off.
This was after the TIMB engaged tobacco farmers to submit proposals about when this year’s marketing season can start.
It promises to be another difficult year for farmers.
For the second year running, they will have to adhere to tough Covid-19 regulations that limit them from going to the auction floors in bigger numbers to witness their produce being sold.
The regulations caused anxieties when they came into force last year, but the pandemic has spread at a far bigger scale since 2020.
Government would be careful not to spark off another wave following a few weeks characterised by dropping infection rates and mortalities.
But it appears this season farmers will be leaving no stone unturned in their fight to be paid sustained amounts after a disastrous 2020 marketing season.
They want the RBZ to increase the amount of foreign currency that they retain to 80% from 50% last year, in addition to ease access to the Zimbabwe dollar component of their earnings from banks.
Farmers have also demanded that there should be no limit on the foreign currency liquidation periods, which forced them to use their funds before they wanted.
However, the central bank has since addressed this problem.
“The agreed position from the tobacco grower representatives is that the decision on the date (to) start the marketing season is based on: our progress on successfully concluding the payment modalities for the 2021 marketing season with the Reserve Bank of Zimbabwe,” said the letter, which was signed by the Commercial Farmers’ Union, Zimbabwe National Farmers’ Union, Zimbabwe Tobacco Association, Tobacco Association of Zimbabwe and Tobacco Farmers’ Union Trust.