The ManicaPost
Lovemore Kadzura
Post Correspondent
OVER 50 million kilogrammes of tobacco have gone under the hammer since the opening of the marketing season last month, with growers pocketing over US$176m, a 12 percent increase in earnings compared to the same period last season.
Statistics released by the Tobacco Industry and Marketing Board (TIMB) on Day 20 shows that the average price for contracted tobacco was US$3.52, while at the traditional auction floor the price was US$3.65.
Contracted tobacco has contributed 47 094 959 million kilogrammes, while self-financed was at a distant 3 084 398m kgs.
About 94 percent of tobacco is grown under contract farming, and farmers are paid 75 percent in foreign currency and 25 percent in local currency.
Tobacco unions have been rooting for 100 percent retention, arguing that their foreign currency earnings were being drained while paying production costs charged in USD.
Due to the skewed arrangement, tobacco farmers are largely victims rather than beneficiaries of the contract system as contractors inflate USD prices of inputs, under-supply them with inputs required per hectare and make unilateral deductions on earnings of farmers, thereby leaving many in debt.
A total of 689 809 bales have been delivered to the floors, with contract bales amounting to 638 720 and those at auction floors amounting to 51 089.
A combined 20 088 bales were rejected.
The highest price for auction floors tobacco stood at US$5.05, while the contract auction has hit a ceiling of US$6.99, up from last season’s high of US$5.60.
The lowest quality leaf attracted US$0.10 per kg, which remains the same from last season.
The firming of the prices during this marketing season has been attributed to high quality and depressed volumes of the leaf due to the El Nino-induced dry spell.
Tobacco Farmers Union Trust president, Mr Victor Mariranyika said the auctioning is progressing on well without major hindrance.
He said this year’s prices were fairly higher than those of last season, which will allow growers to break-even.
“So far the auctioning is going on very well at all floors, save for one company that is struggling to pay growers on time. Cash is readily available at the banks and farmers are accessing their money without hassles. Unlike last season where the prices were low, this season’s prices have improved, and we hope this will continue until the end of the season.
“Last season most auction floors had US$4 as their ceiling price, but this season the prices have shot above US$5.99 depending on the quality. The average price this year is US$3.50 compared to US$2.50 that obtained last season,” said Mr Mariranyika.
He also implored TIMB to strictly implement stringent statutory measures introduced by Government for both growers and merchants to safeguard the integrity of the contract system so that farmers are not short-changed while guaranteeing contractors’ returns on their investment.
He said tobacco merchants failing to pay farmers on time as per requirements must be blacklisted, deregistered and barred from contract farmers without first paying them, lest it becomes a free-for-all situation.
“However we call upon TIMB to investigate some deductions being effected on the growers’ earnings. Some of the deductions are not part of the contract between growers and the merchants. TIMB must not abandon growers at the critical juncture, but take these concern serious and make sure they do not persist.
“Tobacco growers are bitter that instead of protecting them, TIMB is sitting on the fence leaving them at the mercy of greedy merchants.
“Growers need every cent they are entitled to earn a return on their investments, and it is a cumulative of these dubious deductions that pushes them out of business. Farming is a business, and it is the profit that keeps tobacco growers going,” said Mr Mariranyika.
