Tobacco growers are lobbying for the increase in foreign currency retention threshold as a step that will significantly enhance the viability of the industry.
This season, growers have indicated that 100 percent payment on foreign currency will enable them to invest in other businesses and winter crops
Last season farmers received 75 percent of their sale proceeds in foreign currency with the remaining 25 percent in local currency, converted at the prevailing auction exchange rate on the day of sale.
Farmer organisations are also pushing for improvement in the marketing process and have made submissions to the Reserve Bank of Zimbabwe (RBZ) to have foreign currency retention increased so there can be a smooth marketing season with no cases of side-marketing.
Tobacco Farmers’ Union Trust president Mr Victor Mariranyika said 100 percent retention is ideal since production costs are very high adding that the costs of inputs are also escalating.
He said if contractors were funding the crop well, they should raise their prices to allow farmers to get profits.
‘’If all preparations are in place we expect to open the marketing season.
“We are therefore expecting payment s to be done in foreign currency so that we are able to go back and do productions in winter.
The process of reaping and curing under irrigated tobacco is currently underway in most provinces so we are sure that soon the marketing season will open,” he said.
Mr Mariranyika also discouraged side marketing to all tobacco growers.
Side-marketing is also a form of breach of law when auction tobacco is sold otherwise than through auction floors in breach of S40 of the Tobacco Industry and Marketing Act (Chapter 18:20).
Side marketing 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.
TIMB has established an Inspectorate department and is carrying out awareness campaigns educating farmers on the dangers of side-marketing.
The board is also making constant radar sweeps on frequency of sales on grower numbers to identify grower numbers perpetuating side-marketing.
Former Zimbabwe National Farmers Union (ZNFU) vice president Mr Edward Dune said good rains that are received will improve the quality of tobacco adding that farmers are looking forward for a higher retention in foreign currency.
“For the purposes of viability, farmers are expecting an increase in foreign currency.
“We are also happy that good rains will also improve the quality of tobacco,” he said,” he said.
Tobacco Industry and Marketing Board (TIMB) public affairs officer Mrs Chelesani Tsarwe said they are currently conducting a crop assessment exercise in all tobacco growing regions in association with ARDAS to evaluate the status of the crop adding that they will consult with all industry players to come up with a date for opening of the season.
Mrs Tsarwe said they are looking forward for a smooth season for farmers.
“We expect orderly marketing, free of side marketing by both growers and contractors as well as debt repayment and timely payments respectively.
“We are also expecting total compliance to the regulations governing the industry in order to ensure we have a smooth season,” she said.
Last year, farmers have earned US$650 million from the sale of 213 million kilogrammes of tobacco compared to 211m kg sold at US$589 million in 2021. – The Herald
