The ManicaPost
Samuel Kadungure
Senior Reporter
TOBACCO prices have firmed in response to improvement in the quality of the leaf, but high transports costs of delivering the produce to auction floors outside the province are eating into growers’ profits.
Farmers in Manicaland who for the last few years have been selling their crop at auction floors that had been decentralised to the province, are forking out huge amounts in transport costs following the centralisation of markets in Harare.
Although happy with market prices, the issue of exorbitant transport costs being directly passed on to the farmers has dampened the morale among farmers who are forking out between US$12 and US$15 to transport a 100kg bale to either Harare or Marondera.
In Manicaland, tobacco sales are being conducted at Sub-Sahara Floors in Rusape, and the majority of farmers are having to transport their produce to auction floors outside the province.
Last season, Manicaland had one auction floor— Boka Tobacco Auction Floors – and five contract floors— Voedsel, Agritrade, Victory, Munakiri and Sub-Sahara.
This season, only one contract floor was licenced to operate.Mr Shupikai Mvurumitiya of Chikundu Old Resettlement in Odzi, whose crop was sponsored by Boost Africa which was licenced to operate in Marondera and Harare, said they are paying between US$12 and US$15 to transport each bale.
Mr Mvurumitiya said the transport charges are exorbitant, adding that as small-holder farmers who do not have their own means of transport, they have no option but to ride on transport services offered by the contractors.
“I have so far delivered five bales of primmings that were bought for between US$1,80 per kg and US$2,30 per kg. The prices were fair considering that they were primmings, but the profits were chewed by transport costs.
“Can you imagine that I paid US$60 to transport the five bales? I could have paid US$25 for the same bales if the contractor had been licenced to operate in Rusape, which is closer to home. The small-holder farmers are really feeling the pinch,” said Mr Mvurumutiya.
Tobacco Farmers’ Union Trust president, Mr Victor Mariranyika said tobacco deliveries have improved and farmers are being paid on time.
All tobacco buyers have signed the Contractors’ Compliance Administration Framework which compels them to pay growers within 48 hours of sales completion, failure of which they will face stiff penalties, suspension or cancelation of operating licenses.
“Payments to farmers are all in time, but the challenge is that farmers are not making profits.
“Surrogate buyers and merchants are exploiting farmers and making super profits. These are licensed middlemen who are buying tobacco at low prices to maximise their own profits,” said Mr Mariranyika.
He also said the the auction floors are gradually becoming a no go-zone for small-scale growers due to the high bale rejection rate of 10,6 percent, compared to 2.4 percent at contract floors.
Mr Mariranyika cited a TIMB sales report for March 23, 2023, in which 2 165 711kg were sold at the auction floors at an average price of US$2.79/kg, with a bale rejection rate of 13.73 percent.
On the same day, 14 951 716kg were sold at the contract floors at an average price of US$3/kg with a rejection rate of 2.53 percent.
“The other challenge is that auction floors are now centralised in Harare and farmers are incurring huge transport and risk costs when marketing their produce.
“All this translates to high production costs. We are beginning to witness a situation where the farmers are trying to find a market that is closer to home to cut the costs.
“Small-scale growers are the most affected this season and if this continues unabated, the auction system will shrink to extinction, with more growers switching to the contract system.
“Farmers are resorting to illegal acts of side marketing because of these challenges.
“We are, however, discouraging them from taking this route with the hope of completely eradicating the challenges,” said Mr Mariranyika.
