MANY farmers in the prime tobacco-growing area of Karoi are shunning auction floors and opting for side-marketing, citing the slow processing of payments and unfair pricing, The NewsHawks has learnt.
The unauthorised tobacco buyers are offering as low as US$2 per kioogramme compared to official channels which offer up to US$3.50 per kg, but the frustrating delay in receiving the money has left farmers at the mercy of illegal tobacco buyers.
Besides the slow process, farmers say they are not happy with the official marketing system which forces them to liquidate 40% of their sale proceeds into local currency at the official exchange rate as prescribed by the Reserve Bank of Zimbabwe (RBZ).
Last month, the Tobacco Industry and Marketing Board (TIMB) announced that growers would be paid 60% of their sales proceeds in foreign currency after deductions of approved forex-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.
While the industry together with the RBZ jointly put in place “improved payment measures” to ensure that tobacco growers get full value for their crop, farmers still say they were getting a raw deal.
“Government is getting foreign currency from our hard labour. Why are we getting paid in RTGS? Forty percent is just too much. I would rather sell to the buyers who come here to get the tobacco and I’m assured of my US dollars timeously. Even if you go to the banks, it’s taking you ages to get your money, be it bond notes or US dollars. There is no money,” a farmer told The NewsHawks.
A snap survey by this publication shows that as the tobacco season inches towards its peak, banks are struggling to ensure timely payment to the farmers, citing cash constrains as a liquidity crunch continues.
This is despite the government insisting the economy is much more stable because of a constant exchange rate, among other factors.
As of last week Friday, many farmers in Karoi said they had not received their payments for sales dating back two weeks.
However, those farmers who had contractual agreements to grow the crop said they had no choice but to take the crop to the official market until they pay off the debt. They feel trapped in a lopsided arrangement that is not serving their best interests.
“I took my tobacco to the floors last week because I was contacted to grow tobacco. I’m afraid if do not take it there, I won’t be given inputs next year, but the truth is we are suffering. Banks have no money. But once in a while I also engage the “buyers” for quick cash because they pay us on the spot,” said a farmer.
While the tobacco growers acknowledged that the buyers were taking advantage of them, they implored the government to relook into the payment issue to address the undesirable situation.
“We want our money soon after selling our crop. I think government should just give us 100% forex. That way even if it comes late I’m assured I have real money,” said a farmer.
After buying the crop for cash from farmers, the unauthorised buyers, some of whom have grower numbers, then take the crop to the auction floors where they fetch better prices.
—STAFF WRITER
