Zimbabwe: Windfall for Tobacco Farmers

Source from:  The Herald (Harare) 5 June 2007 06/06/2007

GOVERNMENT has so far paid more than $880 billion in support price for tobacco sold during the last two months as deliveries of the "golden leaf" to the auction floors continue to firm. According to figures released by the Tobacco Industry and Marketing Board, the higher sales were due to the attractive support price offered by Government to tobacco farmers this year. The good prices being offered at the auction floors were also attracting more farmers to the auction floors. In an interview with the Herald Business yesterday, TIMB acting chief executive Dr Andrew Matibiri said he was happy with the support the industry was getting from Government. He said tobacco was an integral part of Zimbabwe's economy and it was good that Government was helping to resuscitate the sector, which took a tumble due to recurrent droughts and shortage of inputs. "Government has to date paid $887 billion as tobacco support price to growers. Deliveries are still to peak to levels that we expected owing to transport problems, although the prices have been relatively good. "We expect deliveries to continue to firm as the season progresses. We are happy with the level of support which has drastically increased compared to last year," he said. As of Wednesday last week a total of 15,8 million kg valued at US$33,274 million had been sold at the three auction floors. Of this figure, 9,5 million kg had been sold under the contract system while 6,37 million kg changed hands on the auction floors compared to 8,365 million kg last year. The golden leaf was selling at an average price of US$2,26, up from US$1,96 recorded in the previous week, reflecting a 15,3 percent increase. Government has in recent years adopted a policy of awarding tobacco farmers a top-up price as opposed to a special exchange rate to ensure viability in the sector. Growers who sell their tobacco before September 30 this year are entitled to a top-up price of $40 000 for every kg delivered which fetches a price of US$1,50 and above. Deliveries that fetch prices below US$1,50 per kg will be paid the support price on a pro-rata basis. The wastage rate, or number of bales rejected, declined to 4,17 percent from last year's figure of 9,32 percent, a sign that quality was, indeed, improving. He said the 2006/07 season was good but urged farmers to start working on their seedbeds in preparation for the 2007/08 season. TIMB, among other duties, conducts assessment surveys to determine yield potential and quality composition of the crop in advance of the selling season. An estimated 80 million kilogrammes is expected to go under the hammer this year, compared to 55 million kg sold last year. Tobacco is one of the country's major foreign currency earners. Enditem