Zimbabwe: Introduce Price Controls On Tobacco Inputs, Govt Urged

Source from:  The Herald (Harare) 26 May 2007 05/28/2007

GOVERNMENT must urgently consider introducing price controls on key tobacco inputs and equipment ahead of the 2007/08 season to enable producers to plan effectively and expand production, president of the Zimbabwe Association of Tobacco Growers Mr Julius Ngorima said yesterday. Mr Ngorima said with the ever-galloping inflation, tobacco farmers might fail to raise money to buy fertilizers, chemicals and fuel and maintain or buy equipment for land preparation. "Tobacco requires a lot of mechanisation, more than any other crop, since the farmer can not do zero or conservation tillage but deep tillage for land on which tobacco is to be planted. "This means that there is need for more companies to import more pieces of equipment and the Reserve Bank of Zimbabwe, which is the biggest collector of tobacco's foreign revenue, should assist the companies with foreign currency," he said. Since farmers only get 20 percent of their foreign currency earnings with the rest going to the RBZ, it was logical for them to benefit from the earnings through easy access to affordable equipment and inputs. Mr Ngorima further noted that the development of vital infrastructure such as barns and the installation of flue pipes for tobacco curing had suddenly become very expensive forcing many producers either to rent barns or cure the leaf in makeshift barns, which compromised the quality. "The flue pipes have to be imported and this brings in the foreign currency element again, which means that the 20 percent farmers are getting may be too little to cater for their infrastructural development, equipment and input requirements," he said. On the other hand, Mr Ngorima noted with concern the tendency by farmers to start looking for inputs after the start of the season creating unnecessary pressure for themselves when they could buy soon after selling their crop. "It is only proper for the farmers to draw proper financial budgets or seek advice from experts or experienced colleagues on how to manage their finances so that they remain in business even under a hyperinflationary environment like the one we are operating in," he said. Mr Ngorima said farmers were happy with the prices of between US$1,75 and US$1,95 per kilogramme at the auction floors this year and commended the RBZ for releasing $4 billion for farmers who produced 54 million kg of the "golden leaf" last season. Furthermore, tobacco growers are now entitled to a support price of $40 000 for every kg of tobacco that fetches US$1,50. The move was likely to see an increase in production next season with more farmers venturing into tobacco farming and the possible return of those who had abandoned growing it. Mr Ngorima said the ZATG would be holding its one-day annual congress at the Andy Millar Hall on June 1, 2007 where issues affecting members and the tobacco industry in general would come under the spotlight. Enditem