EDITORIAL COMMENT: Payment for tobacco farmers needs to be prioritised

04 May, 2018 - 00:05 0 Views
EDITORIAL COMMENT: Payment for tobacco farmers needs to be prioritised Dr Mangudya

The Herald

IT appears tobacco farmers who bring hundreds of millions of dollars in foreign currency annually, do not get the respect they deserve from arms of Government entrusted with responsibility to take care of their needs during the tobacco marketing season.

Gold miners who generate far less foreign currency than tobacco farmers, have a better deal with the Reserve Bank of Zimbabwe that enables them to receive their payment in cash — 70 percent in hard currency and the reminder in bond notes.
Maybe it’s because the gold miners’ product can be easily smuggled out while tobacco farmers have no alternative markets for their crop.

RBZ Governor Dr John Mangudya is on record saying tobacco farmers earn foreign currency enough to import fuel to allow the country running the whole year.

Indeed, this explains the centrality of this more than $1 billion sector to national economic turnaround initiatives.
However, a visit to the tobacco sales floors tells a different story as these farmers, mainly beneficiaries of the Government’s successful land reform programme, gives a different tale as farmers are treated in a manner that leaves a lot to be desired.
They are confronted with a plethora of problems, the majority of them not of their own making. The RBZ issued a circular when the marketing season opened stating that tobacco farmers would be receiving $300 daily upon production of receipts as proof of sales.

However, it has been proved that banks operating at tobacco auction floors are not giving farmers a daily cash allocation of up to the $300 set as a maximum by the Apex bank.

As reported recently by this publication’s business section, farmers are saying the banks are giving them a once-off $300 payment, mostly in bond coins and this calls for a serious investigation to establish where the allocation meant for the farmers is being taken to.

The banks rely on the RBZ for bond notes, coins and US dollar banknotes and the Central Bank should not play blame game, but come out openly with proof that indeed it is giving the banks the money to pay farmers.

The fact that the Central Bank remains mum while the farmers are being short-changed year in, year out, means it also should shoulder its share of the blame in the whole matrix.

Surely after toiling all year round, the farmers, who are the geese that lay the golden eggs, should be allowed to reap the fruit of their labour and be paid on time.

Keeping quiet while banks, merchants and some middlemen feast on the fruit of the farmers’ hard labour, is a serious de-motivator that has potential to dent the production levels of this crop.

As it stands, one cannot be blamed to conclude that national tobacco production levels have failed to go beyond the 200 million kg mark for over a decade because of the failure by the authorities to address some of the farmers’ challenges.

As such, the sector might be failing to attract more new farmers or encourage the existing ones to increase production.
Some tobacco farmers have resorted to selling their crop to middlemen who are offering instant cash, shunning the official auction floors where banks end up giving them $300 per sale.

Where these middlemen are getting hundreds of thousands of dollars in bond notes — banks and the RBZ have the answers — but the truth is such loopholes in the banking system have potential to destroy Government efforts to turn around the economy.

Going forward, farmers should also play ball by producing quality tobacco that fetches good prices and by so doing the middlemen problem will be cleared.

The Tobacco Industries and Marketing Board (TIMB) appears to be sleeping on the wheel because farmers continue to be exploited under its nose without even lifting a finger and should play its part.

Government should play its regulatory role and make sure the banks, merchants and other stakeholders in the tobacco industry do not exploit the tobacco farmers. There is also a greater need to decentralise the selling of tobacco and allow competition in the sector.

Share This:

Sponsored Links