ZIMBABWE Stock Exchange listed tobacco firm, TSL Limited has placed the blame for reduced tobacco yield projections on the Reserve Bank of Zimbabwe’s (RBZ) unfair payment arrangements.
TSL Limited company secretary, James Muchando Monday said the national tobacco volumes which were expected to dwindle by up to 20% were partly due to payment issues.
“Payment modalities to tobacco farmers, which have recently been announced by the regulatory authorities, as in previous years, will play a significant role in the out-turn of the tobacco marketing season,” he said.
Tobacco farmers used to be paid in hard currency until last year when the central bank moved to pay 50 % of proceeds money into their RTGS accounts with the remaining 50 percent being deposited into Foreign Currency Accounts.
The development left many farmers disgruntled resulting in the reduction of land under the golden leaf.
Land under tobacco crop this year has gone down to 100 000 hectares compared to a total planted area of 106 558 ha last year.
However, arrangements for payment set for the 2019/2020 selling season by RBZ governor, John Mangudya show a new development which extends 50 % payments in foreign currency and the remaining 50% in local currency to be deposited in bank accounts at the obtaining formal exchange rates.
“To facilitate adequate preparations and importation of inputs for the next growing season, the foreign currency entitlements for growers shall be treated as free funds and may be retained in their FCAs,” Mangudya said.
For the avoidance of any doubt, the central bank governor has allowed holders of such funds to conduct inter-FCA transfers or access foreign payments without any restrictions saying the balances will not be subject to any liquidation requirements.
Tobacco farmers in need of cash for urgent benefits have been given an opportunity to withdraw up to a maximum of $2 000 within the selling season