With 72 000 farmers having registered for the 2016 tobacco growing season, production is expected to fall to 160 million kg because of the drought and lack of financing for producers.

THE 2016 tobacco prices continued to firm from an opening price of US$4,50 per kilogramme a fortnight ago to around US$5,60 per kilogramme last week, raising hope that farmers are likely to get good earnings from the yellow gold this marketing season.
Although the selling season has had several hiccups due to the new payment system, with farmers complaining bitterly about the banning of cash payments at auction floors, tobacco prices have, however, improved beyond their expectations.
Statistics from the Tobacco Industry and Marketing Board (TIMB) show that by day seven, over 5,2 million kg of tobacco valued at US$11,8 million had been sold at a daily average price of US$2,22 per kg, compared to three million kg worth US$6,5 million that had been sold at an average price of US$2,14 per kg during the same period in the last season.
The highest price recorded at the auction floors was US$4,98 per kg and US$5,60 per kg under contract sales. The lowest price was US$0,10 per kg.
With 72 000 farmers having registered for the 2016 tobacco growing season, production is expected to fall to 160 million kg because of the drought and lack of financing for producers.
Last year, the country earned US$855 million from the 190 million kg produced by the 91 000 registered growers.
Farmers say the new payment system introduced by TIMB and the Reserve Bank of Zimbabwe to promote the use of plastic money was an inconvenience, as they usually want cash to pay for labour costs from earnings generated from their first sale of the crop.
According to the new system, farmers can now only receive payments for tobacco sold at auction floors through banks.
Zimbabwe Commercial Farmers Union president, Wonder Chabikwa, said theoretically, the idea sounded practical but unfortunately banks had failed to implement it to the advantage of farmers.
“We are very disappointed with the banks; they do not trust us with their money when it comes to supporting the farmer regardless of the fact that we bring them business. Banks have failed to fully commit themselves as farmers are faced with a situation whereby they can go without cash for over 24 hours,” he said.
“Farmers are being forced to stay in Harare for longer periods because banks are unable to give them their money on time and it is a huge inconvenience considering the fact that farmers are still reaping and curing their crop,” Chabikwa said.
He added that banks had never been sympathetic to the farmers and yet they wanted the farmers’ money after they sell their produce.
“It was a noble idea that allowed farmers to plan ahead without vendors and robbers fleecing them of their hard-earned cash but banks have failed to adequately prepare for this year’s tobacco marketing season.”
Zimbabwe’s banks are grappling with a cash shortage that has forced some financial institutions to limit cash withdrawals for their depositors. The situation has dented confidence in the sector, which was beginning to recover after suffering from bank failures that resulted in depositors losing huge sums of money.
As a way of protecting farmers from unscrupulous elements that are always loitering at auction floors, TIMB and auction companies will be restricting the number of people entering auction floors to curb illegal activities by middlemen. This follows complaints by farmers that middlemen, popularly known as Class B buyers, were wreaking havoc and ripping off farmers of their crop and money.
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