Elita Chikwati and Brenda Ziga Harare Bureau
THE tobacco auction floors opened on a higher note in Harare yesterday with the first bale fetching $4,50 per kg, which is an increase of 21 percent on last season’s opening price of $3,50.
Although volumes of tobacco are expected to be lower this year due to the El Nino-induced drought, farmers are optimistic their earnings would be more than the previous seasons as buyers compete for the high quality but scarce commodity.
If the expected 160 million kg is auctioned at an average price of $4.50 per kg, then farmers are likely to pocket over $700 million compared to $580 million they earned from selling 198 million kg last season.
However, as usual scrap tobacco fetched low prices as little as $0.11 cents per kg yesterday while those who brought good quality tobacco pocketed as much as $4,50 per kg.
Farmers expressed mixed reactions to the prices offered by buyers, with those with the low quality crop complaining and threatening to withdraw it while the ones with good prices celebrated.
Officially opening the marketing season at the Tobacco Sales Floor, the Minister of Agriculture, Mechanisation and Irrigation Development Joseph Made said tobacco merchants were this season likely to pay fair prices for the crop that would enable farmers to have sustainable income to take them back to the field.
“The government views tobacco as an anchor crop for the economic empowerment of our farmers and as an engine for rural development. Every year, at this time, tobacco farmers after having toiled for over 12 months look forward to getting a just reward for their efforts,” the minister said.
“It’s therefore expected that tobacco merchants will pay fair prices for the tobacco to enable farmers to have sustainable returns. The expectation is that buyers will match quality tobacco with high prices at both auction and contract floors. Farmers deserve better prices for them to re-invest in tobacco production this coming season.”
Made urged growers to use the recommended agronomic practices to improve both the chemical and physical integrity of the crop. He raised concern over corruption, that had become rampant and was being promoted by some people within the tobacco industry. “I instruct TIMB in collaboration with ZRP as well as other security organs to be vigilant and curb these detestable practices,” he said.
This season, the Reserve Bank of Zimbabwe introduced a new payment system for tobacco farmers, where they will no longer get cash, but get paid through bank accounts.
Most farmers welcomed the development and said it would ensure they do not lose money to thieves and conmen while others felt they should be given a choice to choose the convenient method for themselves.
Others complained that they did not have banks in their farming areas and were also restricted to withdraw a maximum of $1,000 per day.
The farmers called on the central bank to ensure the banks did not introduce many charges for transactions as the system would become expensive for them.
The new payment system has also affected traders from the informal sector who used to benefit from the tobacco farmers.
They said they had prepared adequately for the tobacco marketing season, but were no longer sure if they would get to their targeted income as the farmers would no longer spend their money at the floors.
TIMB chairperson, Monica Chinamasa, said the proliferation of corruption and illegal activities at the tobacco selling points was disturbing.
“Nothing will unlock the tobacco sector’s potential more than ending the cancer of corruption at the selling points. Corruption is draining millions of dollars from the growers. This money could be used by growers to further investments in tobacco growing,” she said.
“It can’t be acceptable to coerce a grower to pay a bribe just to facilitate sales as this undermines the integrity of the tobacco industry. The most powerful antidote for stamping out corruption is for stakeholders to work together for a common action. TIMB will establish a hotline for reporting any corrupt activities as well as placing suggestion boxes at all selling points and I urge everyone to make use of the facilities and report any issues related to corruption.”
TIMB licensed three auction floors, namely Premier Tobacco Floors, Boka Tobacco Floors and Tobacco Sales Floor. The board also licensed 16 contractors.