HomeBusiness DigestTobacco growers seek price review

Tobacco growers seek price review

Godfrey Marawanyika

TOBACCO farmers have proposed to the Reserve Bank of Zimbabwe (RBZ) and the government that the current support price of $14 000 be reviewed upwards to $22 000.

FONT face=”Verdana, Arial, Helvetica, sans-serif”>The latest appeal comes against a backdrop of Tuesday’s deadlock between farmers and the merchants over the pricing.

When the floors resumed trading on Wednesday, the highest price offered was US$1,97 per kg but is expected to go up to around US$2,20-US$2,25 per kg as the season progresses.

The lowest grade crop was sold at US$0,25 cents per kg.

This year’s crop is expected to be in the range of between 85 million kg-100 million kg.

Zimbabwe has three auction floors — Burley Marketing Zimbabwe, Tobacco Sales Floor and the Zimbabwe Industry Tobacco Auction Centre.

Currently, growers are being offered the golden leaf at the rate of 6 200 against the US dollar.

The rate being offered is the diaspora floor price.

Zimbabwe Tobacco Association chief executive officer Rodney Ambrose who represents mostly 500 commercial farmers confirmed that a proposal on the pricing had been made to both the central bank and government.

“A number of proposals were made to government and the Reserve Bank on the review of the support price but I can not say anything on it.” Ambrose said.

Government representations were made through the Ministries of Finance and Agriculture, whilst merchants were represented by the Tobacco Industry and Marketing Board.

Managing director for TSF David Machingaidze said that on Tuesday they had booked 1 000 bales but by the time of closure they had only managed to dispose of 300 bales.

“This is not the first time the small-scale farmers have complained about the pricing as they did the same thing last year,” he said.

Commenting on the projected output for this year, which initially stood at 160 million kg, he said: “At most I foresee us producing between 85-90 million kg.”

Of major concern to the small-scale farmers such as Cosmas Makore and Bertherman Hendrick from Headlands is that they borrowed from the bank to finance their land and planting preparations.

Makore was given $4 million by Agribank which he used to purchase 28 bags of fertliser.

Hendrick was given $3,7 million by the same bank with which he bought 28 bags of fertiliser.

Using the loans, Makore managed to produce 10 bales and Hendrick managed only two bales.

The two both agree that the money currently being offered is not enough to cover their expenses.

“We borrowed money from Agribank, but if they continue offering these small prices we will not be able to return the loans,” Makore.

At Zitac, general manager Hilary Makore said they failed to sell any of their booked 2000 bales on Tuesday because of the standoff.

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