Tobacco farmers demand US$ payments
Farmers of Zimbabwe’s top forex earner, tobacco, have called on authorities to pay them in hard currency when this year’s marketing season kicks off in the next few months.
The southern African nation rakes in at least US$1 billion annually from tobacco exports.
The golden leaf marketing season traditionally starts in March.
Zimbabwe Commercial Farmers Union president Shadreck Makombe said while the current wet spell had brought about new hope for a better season, farmers were, however, worried about payment modalities.
“You find that this year’s season is promising as the majority crop was rescued with the coming of the rains. Although it is too early to project the overall output, the quantity of this year’s crop may be low statistically and using the rule of the thumb. But the crop can be good and weigh even more if it happens to be better prime quality. But what’s key is that farmers (are paid) in US dollars, that is the clarion call to authorities,” Makombe said.
Government reintroduced the Zimdollar last June to end a decade flirtation with the multi-currency system.
Federation of Farmers Union chairman Wonder Chabikwa expressed similar concerns over the payment mode, saying they do not anticipate a repeat of last year’s chaotic marketing season.
He added that they needed hard currency to ensure viability.
“Farmers are worried about the mode of payment. They want to be paid in US dollars so that they also import certain equipment. Last year, most farmers were disappointed over the way they were paid. While we appreciate that government needs to retain a certain percentage of forex, we must know that farmers also need to get a component in US dollar,” Chabikwa said.
Unlike in previous seasons in which farmers made rich pickings after being paid in hard currency, the just-ended season saw the central bank paying farmers just 50% of their earnings per sale in foreign currency.
The rest was paid in local currency, which has, unfortunately, rapidly lost value against the greenback.
To access the foreign currency component, farmers were, however, asked to get it at a rate.
And due to a lack of transparency in the payment process, most farmers ended up not following up their mandated 50% US dollar earnings last year.
Worsening matters, when receiving the component of their earnings in the local currency, transaction delays occurred.
Data from the Tobacco Industry Marketing Board shows that as of December 20, hectarage under tobacco marginally grew by 2,8% to 81 977 hectares against 79 708 hectares planted same period last year.
A paltry 13 083 hectares was under irrigation with the rest relying on rain-fed water.
Moreso, the number of farmers who registered to grow tobacco tumbled 15% to 143 568 from 168 735 prior year.
In the past season, the golden leaf’s average price was very low at $2 per kg, down from $2,92 registered in the previous season at a time 2019 total output grew to 259 million kg from 253 million kg in 2018.