Zimbabwe: Tobacco Farmers to Continue Retaining 15pc of Export Proceeds

Source from:  The Herald (Harare) February 2, 2007 02/06/2007

TOBACCO farmers will continue retaining 15 percent of their export proceeds in their foreign currency accounts during the next selling season. Reserve Bank Governor Dr Gideon Gono said on Wednesday that this would enable tobacco farmers "to meet their strategic imports requirements". Tobacco representative organisations welcomed the continuation of the retention facility, saying it would go some way in enhancing production of the "golden leaf". An official with the Zimbabwe Tobacco Association said the prolongation of the facility would enable them to import critical inputs such as fertilizers, seeds and chemicals. "This is quite positive," the official said. "He (Dr Gono) has already played his part and its now our duty to deliver," he added. Dr Gono reinstated FCAs for tobacco farmers in June last year. He had scrapped them following the introduction of the support price. To further support the industry, Dr Gono gave dispensation to merchants with offshore facilities to fund importation of chemicals, seeds and other farming requirements for farmers using 'un-drawn' offshore facilities." "When such assistance would have been given out of offshore facilities, merchants will be allowed to recover the extent of support from export proceeds as first charges," said Dr Gono. Locally produced tobacco is in great demand throughout the world because of its unique blending quality, thanks to the ideal local climate conditions which enable the leaf to burn continuously, thus making it popular with top cigarettes manufactures. Tobacco production has been in sharp decline since 2000. That year output was 210 million kg, the highest ever achieved in the history of Zimbabwe. But only 54 million kg were realised this year with production expected to rise to 70 million kg during the 2006/07 season. Enditem