THE Tobacco Industry and Marketing Board (TIMB) recently made a landmark decision that mandates tobacco contractors to support at least a minimum of US$500 per half a hectare and US$4 000 per hectare for small and large-scale growers respectively, in a move meant to safeguard the integrity of the contract system.
The new normal as outlined in the regulations adopted by the board stipulates that the minimum packages contractors would be expected to give farmers include seed, fertilisers, chemicals, tillage, harvesting, curing and marketing resources.
Under the new arrangement, minimum inputs for smallholder growers of US$500 per half hectare should include fertiliser, chemicals, curing fuel and other inputs, but does not include agronomy extension services, interest and levies. The minimum inputs for large-scale growers, on the other hand, include funding to the tune of US$4 000 per hectare accompanied by fertiliser, chemicals, curing fuel and other inputs, but does not include agronomy extension services, interest and levies.
It is also exciting to note that contractors will this time around be required to provide proof of commitment or intent to the TIMB by June 30 of every year and failure to do so will lead to their suspension from contracting growers for that season.
This one on its own is the panacea to the perennial problem of fly by night contractors that come and fleece farmers of their revenue yet they would not have honoured their obligations as mandated by the contractual arrangements.
Such contractors in most cases smuggle a clause or two that would not have been in the initial agreement and farmers have always lost part of their earnings through this chicanery.
The other interesting clause in the new TIMB contract regulations is one that requires all contractors to submit a complete schedule of inputs and their costs by June 30, as failure to do so will lead to suspension for that season.
Contractors are supposed to submit copies of legally binding contracts by September 30 of every year together with proof of inputs distributed, either paid up invoices or payment plans with suppliers. All along contractors did not seem to have been declaring their schedules, which left farmers vulnerable to being short-changed and made to pay amounts that do not correspond to the services they would have received in the course of the season.
Of course, on one front, this kind of scenario only shows that sometimes farmers also do not take time to analyse their contractual obligations when they sign contracts, as they will only be revelling in the fact that they would have struck deals that make the production process easier.
It is necessary for farmers to be conversant with contracts language and where they are not able to interpret some of the clauses they need to seek advice before signing anything that will hold them legally liable.
At least this challenge may now be covered under the new requirement that all contracted growers without accompanying signed contracts will be de-contracted.
This saves them from paying for something they did not sign for.
Additionally, TIMB now requires contractors to submit a list of all contracted growers, including their contact details by November 30.
This clause will protect farmers from what had become common practice among contractors in recent years when they would in some cases disburse some inputs way after their time of application would have expired but still expected the farmers to pay for them.
The sad reality here is that the farmer’s potential yields would have been grossly compromised and the little that would have been realised would be snatched from them.
In fact, farmers had come to a point where they were producing for the contractor and walking away with nothing after all revenue would have been chewed up in servicing the debt.
The long and short of it is that such contractors were just using the Machiavellian principle, which dictates that the end justifies the means on unsuspecting farmers who until recently had not picked the anomaly, which in most cases contractors would quickly dismiss as a problem emanating from economic challenges.
Furthermore, principal contractors will now be expected to consolidate sales of their third party suppliers both in Harare and at decentralised selling platforms with all sales projected to be done under one roof.
Undoubtedly, the new raft of measures will bring order into a tobacco market that had of late become a replica of a war zone with farmers and contractors exchanging barrages of accusations in the same manner warring sides trade gunfire as they both sought to exonerate themselves.
TIMB chief executive, Dr Andrew Matibiri, was upbeat the new measures would bring a fresh dimension to the tobacco marketing seasons and naturally stoke the confidence of future investors to invest in the tobacco sector.
TIMB’s new measures will essentially ensure that tobacco growers are not short changed and with contractors on the one hand also being guaranteed of their returns.
It will be a win-win situation in which both the contractor and the contracted will walk away with something, which guarantees continuity in the sector.
This will ring-fence the sector from collapse just like what happened to the cotton industry some few years back.
The bulk of the tobacco in Zimbabwe is grown under contract farming where the contractors offer growers inputs and buy all the produce from the growers at the stipulated price.
Upon the sale the crop the contracting company will deduct the money for its inputs from the total amount earned by the grower through a stop order facility with the latter getting the balance.
Of late there had been an increase in the number of contractors, who have been accused of underfunding farmers and also over-charging on inputs.
Tobacco Association of Zimbabwe president, Mr George Seremwe, said they were happy that TIMB had listened to farmers’ plight.
“These measures will ensure farmers get a complete inputs package and this will improve the quality and quantity of tobacco,” he said. “Contractors will also be protected from side-marketing.”