LOCAL tobacco farmers have blamed contractor companies for inflating production costs, resulting in producers realising low earnings from the cash crop and defaulting on loan repayments.
PRISCA TSHUMA
The golden leaf is the second-largest foreign currency earner after gold. Farmers are accusing contractors of exaggerating tobacco input costs that has seen farmers struggling in servicing their loan debts after costs surged by as high as 54%.
According to the Tobacco Industry Marketing Board, auction and contract tobacco sales stood at 260 million kg on day 64, which was 54% above the 169 million kg sold on the same day last year. They were sold at the average price of US$3/kg.
Contract sales for the day contrib[1]uted 242 million kg while auction sales contributed 18 million kg. Tobacco Farmers’ Union Trust vice-president Edwards Dune told The NewsHawks this week that contractors were exaggerating the skyrocketing prices of tobacco inputs, blaming it on the macro-economic challenges in the country.
“What these contractors are doing is they are simply milking the farmers by overcharging input costs in USD, thereby eroding the farmer’s gross income,” said Dune.
“It is really entangling farmers, causing farmers to continue to be dragged in indebtedness and a very vicious cycle of loans which are not payable.”
Dune said the contractors have been manipulating the input prices citing macro-economic environment challenges such as the exchange rate and the hyperinflation, which may not necessarily be relevant at the time of signing the loan agreement.
He added that the union was appealing to the government to avail the presidential tobacco in[1]put scheme to counter the exaggerated prices as they are controlled.
“We are advocating for the availing of that scheme, we need the presidential tobacco input scheme, so that our farmers can be assisted in terms of reducing input costs,” he said.
The country has been plunged into an inflation spiral, with food prices spiking up in spite of the government’s warning to the retailers to not participate in speculative pricing.
A Marondera-based tobacco farmer contracted by one of the country’s golden leaf firms told The NewsHawks that high production costs and debts were eating into their gains.
“It is true the production has risen but farmers are no benefiting, as they should. It is due to the high cost of production, resulting in a number of farmers being in tobacco-related debts,” lamented the farmer.
He said tobacco production costs were the main reasons why farmers were not gaining from the crop, with most of them losing livestock in a bid to service the debts.
“The cost of inputs is very high; the pricing system is another stumbling issue. Most con[1]tractors have a ceiling price of US$5,” added the farmer.
Commenting on the issue, the advisory board chairperson Elisha Maziwisa told The NewsHawks that farmers were complaining of the un[1]justified deductions, exorbitant prices on inputs, which went up to US$96 per bag and doubled loan deductions that have not been recovered yet by some of the farmers. He then advised the farmers to diversify their agriculture business to assist in the servicing of loans.
“As the situation stands, it is rather advisable for farmers to focus more on diversification to enable continuous cashflow during and after the marketing season as it mitigates flooding of the crop on the market,” said Maziwisa.
Maziwisa said farmers were falling prey to criminals, especially at the auction floors, who are robbing farmers through identifying growers with a large number of bales and good prices and prejudicing them of large sums of money after withdrawal at the bank.
“My recommendation is that farmers should desist from engaging or entertaining anyone who is not an employee at the auction floor as they may end up losing huge sums of money to thieves whom they will not be able to identify,” he said.
This comes after the advisory board received similar reports from farmers and nothing has been recovered to date.
In April this year, the ministry of Lands, Agriculture, Fisheries, Water and Rural Development projected tobacco production to grow by 9% from 212 703 metric tonnes produced last year to 234 745 tonnes in the current season.
However, the government now believes that deliveries might even reach the 300 000 tonne target, which was envisaged to be achieved by 2025.
