EDITORIAL COMMENT: Spot cash ban makes economic sense

EDITORIAL COMMENT: Spot cash ban makes economic sense

TOBACCOOOOOOOOOTHE Reserve Bank of Zimbabwe’s decision to ban spot cash payments for tobacco farmers this season is much-needed therapy for compulsive spending. While the decision by the RBZ was not meant to dissuade tobacco farmers from blowing their earnings, but to encourage financial inclusion, the move could be a panacea to the inherent need for immediate gratification.

Because we live in a material society, buying a new car or drinking expensive whisky makes one climb up the imaginary social ladder. In times of plenty, friends and lovers are many, only to disappear when days are dark. It is this societal need for the so-called good things in life that makes it impossible for one not to part ways with their money like the proverbial fool.

Every farmer knows that money management starts with making a budget, yet this is easier said than done. How does a tobacco farmer who has just been paid close to $10 000 after investing around $1 500 for a hectare resist the temptation of compulsive buying?

How does a tobacco farmer carrying stacks of hundred-dollar bills ignore all the “cheap” cars, clothes and other goodies that are being sold outside the auction floors? How does the “earthly” tobacco farmer turn away from the “escorts” who are waiting to lead thirsty individuals to the nearest “oasis” in Southerton and Highfield.

This is why we applaud the RBZ for insisting on payments being directly made into bank accounts. In previous seasons, farmers would cash in their cheques at auction floors banks. This left them at the mercy of their material desires which enterprising businesspeople were waiting to cash in on a few metres outside the auction floors.

Spot payments also left farmers at the mercy of schemers and robbers who would have field days during this time of the year. Come Wednesday next week when this year’s tobacco selling season commences, tricksters will have to come up with new tricks or close shop.

While we praise RBZ for the timely intervention, deliberate and sustained efforts must be made to empower small-scale farmers by imparting knowledge on how they can grow their wealth. Last year, over 70 000 farmers — mostly small-scale — registered to grow tobacco. In the past, farmers have produced around 150 million kg of tobacco to pocket over $500 million. Zimbabwe earned $815 million from tobacco exports in 2015.

While the figures might drop this year because of obvious reasons, the point still remains. Tobacco farmers are making a lot of money and it is time the Tobacco Industry and Marketing Board, banks and other players take a leading role in empowering small-scale farmers with the requisite business skills.

This will not only improve the lives of the farmers. What we are calling for is a win-win scenario for everyone. When the farmers save and invest, they bank. When they bank they can buy inputs. When they buy inputs they produce. Come to think of it, the tobacco industry and banks could actually be the biggest winners.

Tobacco is the country’s second largest foreign currency earner after mining and it’s high time small-scale farmers are given the support they deserve. Officials cannot fold their hands and watch as the small-scale farmers are cheated into buying various goods for twice the price just because they have been paid in hard currency.

Premises outside tobacco auction floors have been turned into flea markets just to lure free-spending tobacco farmers who end up getting a raw deal.

In this day and age of plastic and electronic money, this is ridiculous. Farmers must be able to feel safe as they transact anywhere in Zimbabwe and beyond.

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