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George Maponga in MASVINGO
More than 1 000 indigenous sugarcane farmers in the Lowveld have been thrown a timely lifeline after the Reserve Bank of Zimbabwe (RBZ) cleared Tongaat Hulett Zimbabwe to pay them in foreign currency for their exported crop.

Tongaat, which enjoys monopoly in sugar milling, was dithering on payment in forex to outgrower farmers for their share of exported sugar since the RBZ had not given the green light.

The absence of RBZ’s express authority saw Tongaat paying farmers in RTGS dollars while it pocketed all the export proceeds.

In a letter dated May 17 to chairman of the sugarcane farmers’ associations in the Lowveld Mr Edmore Veterai, RBZ Governor Dr John Mangudya said the apex bank had no qualms with farmers receiving hard currency for their share of exported sugar.

He directed Triangle and Hippo Valley Mills to make submissions for authority to special FCA accounts for them to pay farmers in forex.

“Thank you for your letter dated 23 April 2019 regarding payment of sugarcane growers in foreign currency through their Nostro FCA bank accounts,” reads the letter by Dr Mangudya.

“Please kindly be advised that the Reserve Bank has no objection to sugarcane growers receiving their payments from Hippo Valley Limited and Triangle Limited in foreign currency on the qualifying portion of the sales.

“To enable the procedural implementation of this arrangement, Hippo Valley Limited and Triangle Limited should proceed to make formal submissions through their respective banks for authority to operate Special FCA (Transitory) Accounts to facilitate the required payments on receipt of export proceeds.”

Commercial Sugarcane Farmers Association of Zimbabwe chairperson Cde Admore Hwarare welcomed the intervention by the RBZ, adding they have since informed Tongaat on the need to heed the apex bank’s directive.

“Tongaat was claiming that they used our forex receipts for the 2017/18 season to import inputs especially fertilisers and herbicides but it is almost the start of another season and we have not seen the inputs. So, the question is ‘‘where did they put our money?” said Cde Hwarare.

Cde Hwarare said Tongaat took advantage of its monopoly to reap-off farmers through punitive costs of inputs.

Most cane farmers in the Lowveld were mulling abandoning cane production due to a myriad of challenges ranging from a hostile operating environment and failure to pay them in hard currency.

There have been incessant calls for Government to break Tongaat’s monopoly in cane milling. Tongaat operates the country’s only two mills at Hippo and Triangle estates in Chiredzi. Besides involvement in milling, the firm also owns cane plantations that straddle over 30 000 hectares at Triangle and Hippo Valley.

Cde Hwarare also revealed plans to approach Government for the milling charge to be reduced from the current 23 percent to around 15 percent for the 2019/20 milling season, if farmers were to remain viable.

Efforts to get a comment from Tongaat Hullett – Triangle and Hippo Valley Estates – corporate affairs and communications manager Ms Adelaide Chikunguru, were fruitless as her mobile phone was unreachable yesterday.