ZIMBABWE’S tobacco season got off to a bad start with muffled protests from predominantly small-scale growers bitter over a policy shift by th
e Reserve Bank of Zimbabwe (RBZ) on prices.
But large-scale farmers said the move by the central bank was positive “in broad terms”, although the exchange rate remained the single major threat to viability.
“In broad terms, the measures are positive because tobacco growers are this year getting the interbank (exchange) rate and the RBZ is rewarding early deliveries and quality,” said Andrew Ferreira, deputy president of the Zimbabwe Tobacco Association (ZTA).
“But we’re very shy on the viability model,” said Ferreira, referring to the interbank Zimbabwe dollar exchange rate that has remained fixed for the past two to three months, weakening marginally on Tuesday.
Ferreira said the tobacco sector needed an exchange rate of $180 000 to the US unit to ensure viability.
But the central bank’s policy, awarding a 35% bonus for early deliveries, would ensure an effective exchange rate of $134 000 to the greenback, Ferreira said.
“This is 25% shy of levels required for viability, but this will be counteracted by the fact that the Reserve Bank has said tobacco production would be funded through Aspef,” said Ferreira.
Aspef, the Agricultural Sector Productivity Enhancement Facility, is a cheap central bank financing facility extended to farmers to enhance productivity.
While the bigger and experienced farmers have welcomed the new central bank measures, small-and-medium scale farmers — the majority of them blacks given land under the government’s controversial land redistribution exercise — were resentful over what they considered a spiteful gesture to the emergent black farmers by the RBZ.
They said the policy rewarding farmers for quality tobacco would hurt their operations.