Zimbabwe: More Incentives for Tobacco Farmers

Source from:  The Herald (Harare) August 29, 2006 08/30/2006

LUCRATIVE incentives continue to flow towards tobacco farmers who deliver their produce to the auction floors as they are set to start receiving another 65 percent back-payment bonus that will cover production costs. This is in addition to the 35 percent bonus paid to farmers who delivered their produce between April 25 and July 31 this year. Those who deliver their crop between August 1 and 31 will be paid more than the 15 percent that was originally due to them. It means that a farmer who delivers his/her produce for the whole selling season is now entitled to a 100 percent bonus. Farmers were expected to start collecting their bonuses yesterday at the auction or contract sales floors or from banks depending on their sales proceeds collection points. In a statement to farmers, the Tobacco Industry and Marketing Board (TIMB) said: "All growers of flue-cured, burley and oriental tobacco who had sold tobacco by August 31, 2006, are entitled to a support back-payment of 65 percent of their gross sales. "The back-payment cheques will be ready for collection on Monday August 28 onwards at the auction or contract sales floors where the growers sold their tobacco. "For those growers who receive their sales proceeds through banks, please note that payment will be transferred electronically from the same date." There have been strong hints that the selling season would be extended following an upsurge in deliveries over the last few weeks. The selling season was initially scheduled to close on August 31. "Whilst it is anticipated that sales may end on August 31, 2006, they will continue beyond this date should more deliveries be made by growers," The central bank introduced a bonus incentive to cushion, motivate and reward those who have an interest in this specialised sector against escalating production costs and to expand their productive capabilities. "With immediate effect, the Reserve Bank has introduced a tobacco performance, research and development facility which rewards growers for actual production. "Under this facility, growers will get additional support of 65 percent of sale value of the actual deliveries sold onto the auction floors, evaluated at the old interbank exchange rate of Z$101 000 to US$1 retrospectively from start of this season to end of August, 2006," said RBZ governor Dr Gideon Gono when presenting the Mid-Term Monetary Policy Review Statement on July 31. "This support is over and above the 35 percent already in place," added the governor. After the lapse of the normal selling season there will be no bonus to those who sell during the clean-up period. The clean-up period is the extra time in which farmers are allowed to deliver any produce that misses the deadline for one reason or another. Tobacco earnings are most likely to surpass the US$100 million from 52 million kilogrammes predicted. Enditem