THE Tobacco Industry and Marketing Board (TIMB) says the 60% foreign currency entitlement to tobacco growers shall be treated as free funds following an agreement with the central bank to improve payment measures for farmers.
The 2021 tobacco marketing season began on Wednesday this week with the first bale being sold for US$4.30 per kilogramme, compared to US$4 last year and US$4.50 in 2019.
The season started at a time the government is yet to make an official announcement on redollarisation of the economy with the use of the US dollar being referred to as free funds, a move adopted last year during the first Covid-19 lockdown.
This was the first time the government allowed the use of US dollar after banning the use of multi-currency system as the local currency continued to lose value.
On Wednesday, TIMB chairperson Patrick Devenish said the other 40% portion shall be converted at the prevailing auction exchange rate on the day of sale and paid in local currency.
“The industry together with the Reserve Bank of Zimbabwe have jointly put in place improved payment measures to ensure that tobacco growers get full value for their crop and are simultaneously paid within the shortest possible time. Growers shall be paid 60% of their sales proceeds in foreign currency after deductions of approved foreign currency-denominated loans, and the 40% portion shall be converted at the prevailing auction exchange rate on the day of sale and paid in local currency. The 60% foreign currency entitlement to tobacco growers shall be treated as free funds. It is no secret that tobacco production and marketing come with various challenges,” he said.
Devenish added that tobacco hectarage went up by 6.84% from 117 000 hectares in 2019/20 season to 125 000 ha. The number of registered growers declined to 145 625 compared to 147 931 in the prior year with more than 1 916 growers having registered for the first time.
While the board had licensed three auction floors for the 2021 marketing season, it had also came up with approved decentralised contract sales which are to be conducted at five designated centres and these are Karoi, Mvurwi, Bindura, Marondera and Rusape.
The licensed floors are Tobacco Sales Floor (TSF), Boka Tobacco Floors (BTF), and Premier Tobacco Auction Floor (PTAF).
“As usual, the board inspected the level of preparedness at the licensed auction floors and the three floors were found to be ready for business including compliance to Covid-19 guidelines,” he said.
The board licensed 28 and 39 “A” Class and contract buyers, respectively, figures almost similar to last year.
News7 months ago
Ginimbi’s business empire: A dodgy, ghostly enterprise
Opinion8 months ago
Zimbabwe state intelligence, abductions, and modus operandi
Investigations8 months ago
How military intelligence swooped on Rushwaya
News3 months ago
Mugabe’s son-in-law, daughter struggle to complete mansion