Elita Chikwati Agriculture Reporter
The new tobacco payment plan, by ensuring that farmers receive payment through banks, is expected to increase farmers’ chances of accessing funding from banks and growers may shift from contract farming to self financing.
Starting this season, tobacco growers will be paid through banks unlike the previous seasons where they used to receive cash.
Tobacco Industry and Marketing Board chairperson Mrs Monica Chinamasa, said the new payment system was meant to assist farmers in accessing loans from banks.
She said farmers had been facing challenges accessing loans and ended up going into contract farming.
“When farmers get their money through banks, they will have track records and be able to access loans.
“The system will in the long run benefit farmers and auction floors as many people will be able to fund themselves,” she said.
This has resulted in all tobacco farmers being asked to open bank accounts and all sales proceeds from the sale of tobacco being paid through these bank accounts.
The central bank has also simplified the process by stating that banks will only require tobacco farmers to furnish them with their national identity card and tobacco grower’s number in order to open bank accounts.
In addition, the bank accounts have favourable conditions which include waiving of charges for maintaining bank accounts.
“I urge all tobacco farmers to take advantage of these favourable conditions to open bank accounts so as to create a track record, which will assist in accessing loans. This will also provide the convenience of transacting through payment platforms such as mobile banking and point of sale and also guarantees security of hard earned income,” she said.
Mrs Chinamasa said the Reserve Bank of Zimbabwe was introducing standards and that was normal in most countries.
The new payment system has, however, been met with mixed feelings by farmers with some welcoming the development while others felt the old system was more convenient for them.
The farmers complained that banks only allowed a maximum cash withdrawal of $1 000 a day thereby limiting them while others said there were no banking facilities in the farming areas; while banks limit cash withdrawals account holders can transfer any sum through transfers to other accounts through debit cards or RTGS.
Some farmers also complained that the process was taking too long as it took up to 24 hours for payments to reflect in their accounts.
Premier Tobacco floor managing director, Mr Philemon Mangena said there was need to set aside some cash to assist farmers in desperate situations as they wait for their cash.