Govt, farmers deadlock hits tobacco sales

Blessing Zulu

THE impasse between the government and tobacco farmers over devaluation has resulted in a sharp decline in crop deliveries to the auction floors, the Zimbabwe Independent has learnt. <
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Zimbabwe Tobacco Association’s marketing information executive, Rodney Ambrose, confirmed this week deliveries had declined.


“Deliveries to the tobacco auction floors have declined by about 40%,” said Ambrose.


He said some auction floors were not being used at the moment because of low tobacco deliveries.


“We usually have six auction floors auctioning the crop, at the moment only four floors are open due to low volumes,” he said.


Farmers are not happy with the exchange rate of $824 to the US$1. They want the rate increased to about $1 600.


“There is a lot of confusion at the moment because the government may devalue the dollar with effect from the beginning of next month,” said Ambrose. “Those who want to sell before this date fear they might lose out. Many farmers have therefore decided to hold on to their crop.”


Farmers say inflation has pushed up production costs after they obtained their inputs on the parallel market at exchange rates of up to $2 500 to the US dollar.


Ambrose said farmers had communicated with government on the need to devalue the dollar to ensure viability. Tobacco was the country’s biggest foreign currency earner before government began seizing white-owned commercial farms in 2000.


Farmers have so far this year planted 134,16 kg of seeds compared to 168,12 kg last year.


Last week farmers, through the Tobacco Industry Marketing Board, wrote to the Ministry of Finance calling for a revision of the exchange rate but there has been no response to date.