TOBACCO farmers associations have tabled a series of demands that they want the Reserve Bank of Zimbabwe (RBZ) and industry regulator Tobacco Industry and Marketing Board (TIMB) to address before this year’s marketing season kicks off, NewsDay Business can reveal.
Last week, TIMB engaged tobacco farmers to submit proposals for this year’s marketing season amid indications of another difficult year for farmers.
For the second year running, farmers will have to adhere to tough COVID-19 regulations that restrict them from going to auction floors in big numbers to witness their produce being sold.
The regulations caused anxiety when they came into effect last year, but the pandemic has spread at a far bigger scale since 2020.
Government would be careful not to spark another wave following a few weeks characterised by a drop in infection rates and mortalities.
But it appears this season farmers will be leaving no stone unturned in their fight for fair payments after a disastrous 2020 marketing season.
They want the RBZ to increase the amount of foreign currency which they retain to 80% from 50%, in addition to ease access to the Zimbabwe dollar component of their earnings from banks.
Farmers have also demanded that there should be no limit to the foreign currency liquidation period, which forces them to use their funds before they want to.
However, the central bank has since addressed this problem.
“The agreed position from the tobacco grower representatives is that the decision on the date (to) start the marketing season is based on: ‘Our progress on successfully concluding the payment modalities for the 2021 marketing season with RBZ’,” read a letter signed by the Commercial Farmers’ Union, Zimbabwe National Farmers’ Union, Zimbabwe Tobacco Association, Tobacco Association of Zimbabwe and Tobacco Farmers Union Trust.
“The tobacco grower representatives engaged the Reserve Bank of Zimbabwe through a letter dated January 22, 2021 and the demands were made,” the letter added.
Apart from the unsustainable payment model deployed by the central bank last year, accessing payments from banks has been a perennial crisis for tobacco farmers.
This problem intensified last year when farmers slept in the open for many nights waiting for banks to release their payments.
Zimbabwe was going through the toughest phase of a long-drawn foreign currency crisis which was compounded by government’s decision to re-route some resources to fighting the COVID-19 scourge.
The associations also demanded that TIMB should finalise an assessment to see if contractors complied with minimum support packages provided to growers. Farmers felt that not all contractors were compliant.
A tobacco contractor is supposed to give funding per hectare of at least
US$1 000 to farmers.
Zimbabwe’s crop is largely funded through foreign contractors as local banks’ lending capacity has been dropping over the years due to various reasons.
The background to these demands is that the 2020 marketing season turned into a near catastrophe for farmers after a central bank directive forced them to access their 50% Zimbabwe dollar earning at a fixed exchange rate of US$1:$25.
This was far below rates of up to US$1:$165 that were obtaining on the parallel market during the first quarter of 2020.