Beleaguered Zimbabwe tobacco farmers head for early sales

Source from:  by Godfrey Marawanyika Tue Mar 13, HARARE (AFP) 03/15/2007

Zimbabwe's beleaguered tobacco farmers, once a mainstay of the economy, will troop into town this week for the annual sales a month early in a bid to beat the impact of the galloping inflation rate. The tobacco-selling season traditionally begins in April, but with inflation now at 1,730 percent and the cost of living surging by the week, farmers fear they may not cover the cost of the next crops if sales are not brought forward. "We pushed for an early start to the season because of rising inflation and other input costs," Julius Ngorima, president of the 30,000-strong Zimbabwe Tobacco Growers Association (ZTGA), told AFP. "Farmers last received payments about 18 months ago, so if we were to wait for another month they end up losing financially. Everything is going up, be it fuel, labour or input costs." He said farmers might also struggle to pay back loans due to high interest rates and called on the central bank to give them a special exchange rate to enable them to break even. Zimbabwe's tobacco farmers are paid in US dollars. Zimbabwe this year planted 40,000 hectares (100,000 acres) of tobacco out of the initial target of 80,000. At least 13,300 hectares of irrigated tobacco have been harvested so far, Ngorima said. Analysts blame the low hectarage on shortages of diesel for tilling machines and fertiliser in the southern African country, which has been bedevilled by a lack of basic goods and equipment in the last few years. Tobacco production in Zimbabwe has declined from a record high of 236.13 million kilogrammes (236,130 metric tons) in 2000 to just 55.6 million kilogrammes last year. While this year's figure is expected to be around the 70 million kilogramme mark, it is still a far cry from the former glory days. Critics blame the slump in production on President Robert Mugabe's controversial land reform programme launched in 2000 which saw the government seize at least 4,000 farms from their white owners. While Mugabe justified the seizures as a move to redress the wrongs of the colonial era, much of the land ended up in the hands of people who had little experience of farming. John Robertson, a Harare based independent economist, said that Zimbabwe had effectively sacrificed its status as the leading tobacco grower in the southern Africa region. "We are already behind Zambia in terms of production and Malawi might soon overtake us as well," he said. "We have lost our position on the world market and that is why many buyers no longer look at us." Robertson predicted that some farmers could hold on to their crops unless the current official exchange rate is changed. Since August last year, the exchange rate has been pegged by the central bank at 250 Zimbabwe dollars against the greenback while on the black market the the US dollar fetches up to 7,500 Zimbabwean dollars. "If they (authorities) don't do something about the exchange rate, then there might be small sales or there will be no buyers," he said. "Last year farmers protested about the poor exchange rate and several months down line they are still getting value of their crop at 250. "The exchange rate should be adjusted to at least 2,000 against the dollar for farmers to break even." Enditem