Zimbabwe: 'Plan for Smooth Tobacco Selling'

Source from:  The Herald (Harare) 4 January 2008 01/07/2008

As the new year begins, the tobacco-selling season beckons with April, the traditional opening month of the selling season, being only four months away. However, experiences over the past two years call for a change in planning by all stakeholders, especially the Government. During this period, Government has had to intervene to enable the season to progress as farmers have now developed a tendency to withhold their tobacco during the first few days after the opening of the selling season. The main source of contention during the past two seasons has been the producer price. The delays have almost become routine or a tradition because of their increasing frequency. Key for tobacco farmers has been the need for them to get a realistic return on their crop and an exchange rate that promotes such a scenario. Government has had to make some quick decisions to avert further delays by giving in to farmers' demands at short notice. During the just ended season, farmers demanded the review of the exchange rate applying then of US$1 to $250 and the reinstatement of the foreign currency retention facility. It took the effort of Reserve Bank Governor Dr Gideon Gono, the then acting Minister of Finance, Mr Patrick Chinamasa, and the Minister of Agriculture, Mr Rugare Gumbo, to persuade the farmers to deliver their crop. The impasse was resolved after Government announced a support price for the farmers and that they would also retain 20 percent of their foreign currency earnings. The situation obtaining reflects lack of timeous planning on the part of stakeholders and is also an unfortunate development to a system that has over the years worked smoothly. It is incumbent upon the stakeholders, especially Government, to look at pricing structures well ahead of time to ensure that the season starts on time. The delays often hurt the small-scale producers worst, as they would want to quickly sell their tobacco and get money for inputs and other provisions that they might require. Most of them also feel the pinch of the delays as they often sleep in the open while waiting to sell their produce and collect their earnings. Another important factor that the stakeholders have to consider is the provision of funds to ensure that packaging material is readily available on the market. During the past year deliveries were temporarily suspended after wrapping paper ran out on the formal market only to resurface on the informal market at prices that were beyond the reach of many farmers. It took the injection of about US$167 000 by Government, through the Reserve Bank, to salvage the situation. Also of concern was instances of fuel and transport shortages for farmers to deliver their crop to the floors. The 2006 selling season was rocked by threats of boycott at the tobacco auction floors by farmers who were against the quality-oriented pricing system. In the end, Dr Gono told non-performing farmers to shape up or ship out. Burley sales were the most affected as sales were suspended for long periods after disagreements between producers and merchants on the producer price. The impasse was only broken after the Tobacco Industry and Marketing Board negotiated with the Reserve Bank for the burley to be bought by the Air-Cured Tobacco Association . Despite the fact that Government has often been called to action in a short space of time, it should be commended for ensuring the success of the tobacco-selling season. Enditem