HomeBusiness DigestTobacco payments hit by system failures

Tobacco payments hit by system failures


PAYMENTS to tobacco farmers have been affected by multiple system failures that have left unions worried, businessdigest established this week.

Farmers’ leaders said they had filed complaints with the central bank and the Tobacco Industry and Marketing Board (TIMB) after the gridlocks, which have mostly been experienced by farmers who have delivered the contracted crop.

About 95% of this year’s crop was grown under the contracting farming system.

Tobacco Association of Zimbabwe president George Seremwe said it was worrisome that the same problems that had affected farmers for many years had returned to haunt the sector.

“I would say so far the price obtaining at the auction floors is fairly okay and farmers are quite content with that,” Seremwe said this week.

“We have a challenge with the contracted farmers. Over 95% of our tobacco is contracted. Some farmers are not happy with the pricing system because there are so many middlemen who are buying the tobacco at negotiated prices. So we have a challenge with the contractors and some of them are not paying farmers on time,” he said.

“Farmers are going up and down trying to access their money. Some of the contractors do not have money in their accounts. We wonder as to how they have been given licenses. We have since launched that complaint to TIMB to make sure this is investigated. I hope they will help us to reduce the outcry of our farmers. We have also advised the Reserve Bank of Zimbabwe (RBZ),” said.

Farmers are this year getting 60% of their money in foreign currency. The remainder is being converted to Zimbabwe dollars at the prevailing foreign currency auction system exchange rate.

The RBZ was not available for comment this week.

But the TIMB blamed delays on system failures.

“The delays to farmers payments were a result of system challenges, which affected licensed contractors,” TIMB public relations officer Chelesani Moyo said.

Statistics from TIMB showed that as of day 13 of trade this week,US$90,4 million had been earned after 35,3 million kg of the crop was delivered at both auction floors and to contractors.

At the same time last year the crop had realised US$83,6 million from 32,6 million kg.

This year’s overall average price per kg at US$2,56 is 14% firmer than US$2,52 that prevailed during the same period last year.

The average price for the crop grown under contract, at US$2,80, is lower than that of auction floors pegged at US$2,96 per kg.

This is happening at a time concern has been raised that authorities must take drastic action to deal with the growing monopoly of the contract system now controlling 95% of the crop against the country’s oldest model of tobacco buying – the auction system.

The tobacco season commenced on April 8, with authorities projecting an output of 200 million kg this year above the 189 million kg registered last year.

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