Tobacco Asia

58 tobaccoasia Issue 6, 2022 November / December in improved production for most crops. Inces- sant rains caused excessive leaching of nitrogen and other crop nutrients." This year, the government allowed buyers to pay farmers 75% of their deliveries in US dollars and the remainder payable in Zimbabwe dollars. That was in response to growers' appeals that they needed hard currency to be able to pay for inputs in a country where the greenback is the most pre- ferred medium of exchange. However, farmers are still unhappy with the payment modalities said, Zimbabwe Tobacco As- sociation president, George Seremwe. "Contrac- tors deduct the input costs in US dollars," he said. "This takes up a large portion of the for- eign currency component and effectively the only money that a farmer is left with is the 30% lo- cal currency portion. What we are proposing is for the government to put the payment to 100% foreign currency. That is one point. The second one which we think will be very helpful is for local funding to drive tobacco, not contractors. That is included in the Tobacco Value Chain Transforma- tion Strategy that was adopted last year so we urge the government to get the systems in place." It is difficult, he added, for a farmer to fully fund themselves and be free to sell their crop on the auction floors because prices at on that market are determined by those prevailing on the contract floors. "There is a possibility that a farmer may be worse off if they decide to self-fund as ultimately the price they get at the auction is determined by the contractors," he said. The season was also marred by some irregu- lar activities of the so-called "surrogate" buyers, who are effective runners for some of the big mer- chants in the country. Some of them have been accused of failing to pay the farmers they contract. In an attempt to weed the imposters out, the gov- ernment, through TIMB, on September 22, an- nounced the introduction of a compliance admin- istration framework which will from the October 2022 growing season mandate whoever intends to contract growers to provide a fuller package of in- puts such as fertilizer, coal to cure the crop, and a portion of the labor costs. Seremwe thinks that the new regulations will force the five dominant contractors – Northern Tobacco (BAT), Premier Leaf Tobacco, TianZe, Zimbabwe Leaf Tobacco, and Mashonaland To- bacco Company – to be more directly involved in the contracting process. But the regulator has also come down hard on farmers who violate contracts by collecting in- puts from one contractor and ending up selling to another contractor or on the auction floors. It deregistered more than 37,000 farmers who reg- istered and subsequently grew the crop over the past few seasons but did not deliver any crop to the auction or contract selling points. This, it said, raised the suspicion that the growers engaged in "side marketing," a form of contract fraud. Despite a mixed 2021-2022 tobacco season, the industry is positive as the 2022-2023 one begins. Those who grow the leaf under irrigation started transplanting on September 1. By September 2, they had bought 925kg of tobacco seed, enough for 184,999 hectares versus 798kg, enough for 159,664 hectares in 2021. A total of 106,067 growers had registered to grow the country's top agriculture ex- port by September 22, an improvement on 80,069 by the same time last year. A forecast by the De- partment of Meteorological Services in August that the country could receive normal to above normal rainfall season could have been an incentive even amid payment modalities that farmers complain make tobacco growing uncompetitive. "Dryland growers are preparing and those with irrigation systems are already working," Te- vera told Tobacco Asia. "Conditions with respect to the difficulties over the foreign currency pay- ment system and the fact that some farmers have still not been paid after surrogates disappeared af- ter receiving the crop are constricting, but tobacco is our livelihood." Zimbabwean farmers sorting their crop. (TIMB photo) A view of a tobacco trading floor in Harare, Zimbabwe. (TIMB photo)

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