The Zimbabwe Commercial Farmer’s Union (Zcfu) has implored the Tobacco Industry and Marketing Board (Timb) to ensure the availability of cash for tobacco farmers and a functional e-marketing system at the auction floors, as the marketing season draws nearer.
The 2018 marketing season is expected to begin on March 21.
ZCFU president, Wonder Chabikwa, said an effective e-marketing system at auction floors eliminates collusion.
“Most auction floors around the world have advanced e-marketing systems that discourage buyer sharing. Buyer sharing is a huge disadvantage for farmers, as prices remain relatively low. E-marketing encourages competition among buyers, which is to the greater advantage of the farmers.
“An effective e-marketing system also ensures that there is faster processing of payments on the auction floors. It allows monitoring of the auction floors by TIMB to make sure everything is running smoothly,” said Chabikwa.
He said most smallholder tobacco farmers require cash to pay their workers.
“Though Zimbabwe has now embraced the use of plastic money, most smallholder tobacco farmers are yet to get used to the cashless society. These smallholder farmers are the major contributors to the tobacco output recorded in this country. They require cash to pay their farm workers since most of them do not have bank accounts,” said Chabikwa.
The Reserve Bank of Zimbabwe has set a US$300 daily cash payment ceiling for tobacco growers this season with balances paid electronically in a move expected to improve settlement efficiency.
Last year, it set a US$1,000 limit but banks failed to meet demand.
Chabikwa also urged TIMB to ensure tobacco farmers are not left stranded at various auction floors after failing to get paid for their crop.
Last year, growers were further disappointed when the Zimbabwe Revenue Authority announced that 10 percent tax would be withheld from growers who did not have tax clearance certificates.
This move was, however, later reversed after many growers complained.
Tobacco is one of Zimbabwe’s most profitable agricultural exports and is a major contributor to foreign currency.
Export destinations for Zimbabwean tobacco include China, South Africa, Korea, Sudan, Hong Kong and Indonesia.
In the 2017/18 season, the number of registered tobacco growers rose to 118,338 from 82,438 registered the prior period ‑ an increase of 44 percent.