Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Sugarcane Farmers Drown In Debt

Sugarcane Farmers Drown In Debt

29 Jan 2015

sugarcane farmTHE country’s sugarcane output is likely to drop significantly as hundreds of indigenous farmers in the Lowveld drown in debt. The farmers, who became sugarcane growers thanks to government’s controversial land reform programme, are now barely surviving at the mercy of marauding creditors. Most of them are beginning to lose their properties after failing to pay their debts, amid indications that some of them splashed the loans on luxury cars, holidays and beer-drinking binges. Some are said to have married several wives.

But so broke are some of the farmers that they cannot even afford buying inputs for the coming farming season. Fidelity Life Financial Services, which lent quite a substantial amount of money to some of the farmers, is now closing in on the delinquent debtors.

Recently Fidelity Life approached the Chiredzi Magistrate Court seeking an order to have several movable and immovable properties belonging to 30 sugarcane farmers attached in order to recover its money.

Chiredzi magistrate, Honest Musiiwa, granted the order to the company which was represented by Grace Bwanya of Chihambakwe and Makonese after the farmers absconded court resulting in a default judgment being given. Most of the affected farmers are war veterans.

With Fidelity Life having made a decisive step towards attaching the farmers’ properties, fears are that its actions might force other creditors to approach the courts in order to recover their dues. Most of the sugarcane farmers owe banks and other financial institutions, including micro-lenders, thousands of dollars.

“This simply mirrors what is going on in the sector… many are sinking in heavy debts and are failing to repay loans given to them,” said one farmer, Herikanos Chiwara.

“Of course, there are some cases of mismanagement, but do not also forget that the industry has been flooded by cheap Brazilian imports and you should also understand that the general business atmosphere in the country is not conducive, and, as farmers, we have not been spared,” he said.

Due to the influx of cheap imports, one of the biggest sugarcane growers and manufacturers, Tongaat Hullet, has started a campaign to dissuade consumers from buying inferior sugar.  The sugar industry has since the 1960s been a significant player in the country’s economy in terms of employment generation, foreign exchange earnings and contributions to the fiscus through various taxes.

Tongaat Hulett, listed on the Zimbabwe Stock Exchange, dominates the industry. It produces sugar across over 40 000 hectares of irrigated land, has milling capacity of around 600 000 tonnes and employs around 25 000 people. Tongaat also absorbs sugar from over 800 new outgrowers who benefited from the land reforms, which started in 2000.

These indigenous sugarcane growers farm around 15,000 ha, with farm sizes averaging about 25ha.  In 2013, the industry produced 460 000 metric tonnes of sugar, after output had plummeted at the height of the economic meltdown. In Zimbabwe, sugarcane is grown in the southern Lowveld.

It is used to produce sugar and is also exported as well as used in the fuel industry, which mixes the sugar by-product ethanol with gasoline to help decrease the country’s reliance on expensive imported fuels. — Own correspondent

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