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Yeukai Karengezeka
Herald Correspondent
FARMERS have earned US$132, 6 million from the sale of 45, 23 million kilogrammes of tobacco since the opening of the marketing season on March 31.

The Tobacco Industry and Marketing Board (TIMB) auction and contract tobacco seasonal sales statistics show that by day 20, the total number of bales were 616 302. Prices of tobacco have however, continued to firm.

The average price at the auction floors is US$2,93 per kilogramme while contract floors have registered an average price of US$2,63 per kg.

Since the opening of the 2022 tobacco marketing season, the highest price of US$6, 50 per kilogramme has been recorded at the contract floors while the usual US$4, 99 per kilogramme has continued to prevail at the auction floors.

There have been concerns raised by self-financed farmers over a cap on the prices offered by buyers at the auction floors.

Farmers feel buyers collude to pay a maximum price of US$4, 99 per kg at the auction floors and pay a higher price at the contract floors.

Lands, Agriculture, Fisheries, Water and Rural Development Minister Anxious Masuka also warned buyers against offering higher prices at contract sales compared to auction sales for similar grades.

He also took a swipe at collusion by merchants and manoeuvres by middlemen to re-handle tobacco bought cheaply from farmers.

The Government has called for discipline among actors in the industry to eliminate farmer deprivation by middlemen while enhancing transparency and fairness in contract and auction sales.

Contractors have been urged to provide the prescribed minimum support package for both smallholder and commercial farmers while growers were advised to repay this support through the delivery of the crop to contractors and avoid side-marketing.

Concerns have also been raised with regards to growers facing viability challenges because of the increased cost of production and the Government and stakeholders are working on better alternative sources of funding to improve the viability of tobacco growers.

This year farmers are getting 75 percent of their payments in foreign currency and the payments are being treated as free funds.

The remainder will be paid into the farmers’ RTGS accounts.

Recently, the Government gazetted Statutory Instrument 77 of 2022 which was published on April 15, a move which will see those engaging in the side marketing of the golden leaf liable to prosecution.

Under SI 77, any side marketer may be required to compensate three times the loss suffered by any particular contractor.

According to the gazette, any person who participates in side marketing shall be liable to a fine not exceeding Level five (5) or to imprisonment for a maximum of six (6) months or to both such a fine and imprisonment.

The move has been taken to protect the industry from unscrupulous dealers.

There have been reports of rampant side marketing in the industry which is threatening production.

Side-marketing is a form of contract default where a contracted tobacco grower sells his or her tobacco to a third party in breach of a legally binding contractual agreement which states that contracted tobacco shall only be sold to or bought by the licensed contractor who provided inputs to such a grower.

Side-marketing is also a form of breach of the law when auction tobacco is sold other than through auction floors in breach of S40 of the Tobacco Industry and Marketing Act (Chapter 18:20).

It can also take place when a contracted farmer sells his or her tobacco to a licensed contractor other than the one who supplied him or her with inputs.