Zimbabwe: Farmers to Get Cash for Tobacco

Source from:  All Africa 02/24/2011

TOBACCO farmers are now getting a cash payment for almost all their deliveries after the Reserve Bank of Zimbabwe increased the cas h payment threshold from US$2 000 to US$10 000 per sale. Tobacco Sales Floor general manager, Mr James Mutambanesango confirmed the new cash threshold. "RBZ has released a circular directing that the threshold be increased to US$10 000 per sale and that the threshold could be increased by another US$1 000 as the season progresses," he said. With tobacco selling at an average of US$2,56 per kg so far this season, farmers who deliver less than 4 000kg of the golden leaf at once, would get their payment in cash. The US$10 000 threshold applies per every single sale made and farmers with more than 4 000kg can split their sale into two within the same day and still get US$10 000 per sale. The next sale is not affected by the cash payment made for the previous sale. The cash threshold makes it easy for mainly the small scale farmers with no bank accounts who have a previous record of spending nights on end trying to cash their cheques before going back to their farms. There are, however, a few farmers who can deliver 4 000kg per season, let alone at a time. Producing one hectare of commercial tobacco costs between US$8 000 and US$10 000, everything being done according to the book. This means that to really make money farmers have to improve their yield levels per hectare and the same applies for all crops. For instance, a farmer needs 14 bags of fertiliser at US$30 per bag, a standby generator, which requires 1 000 litres at US$1,40 per litre, two tonnes of coal at US$300 each, labour at US$100 per worker per month, among other costs like curing, handling and transport. Dry land tobacco produces an average of 2 500kg per ha while irrigated tobacco produces an average of 4 000kg per ha and the price per kg is determined by the quality, which subsequently determines the profit margin. Farmers' Development Trust executive director Mr Lovegot Tendengu confirmed the figures. "Yes, it costs about US$10 000 per ha, per average, everything being done properly with farmers getting a yield ranging from 2 500-4 000 kilogrammes per hectare," he said. "Zimbabwe has a good quality crop and farmers should get good prices. We also want to retain our position as one of the best producers of flue-cured tobacco," Mr Tendengu said. Tobacco Association of Zimbabwe first vice president Mr Guy Mutasa said the prices being offered at the floors this year were good and were expected to increase as the quality of the crop improved. Farmers start by reaping the lower leaves which are normally of low quality and sell them to offset harvesting costs. They then sell the good quality as the season progresses, alongside the late reap. Tobacco growers yesterday said they were happy with the improvements on service delivery at TSF including registration, auctioning and payment methods. Marondera farmer Mr Nhamoinesu Mudhombo said he was satisfied by the service at the auction floors, especially the absence of long queues. "I came yesterday and today my tobacco has already been bought. The process is a bit faster unlike the previous year. "Last year I spent more than three days here, which was very expensive and I did not have the money," he said. Headlands farmer Mr Misheck Dick said he was happy in that there had been an improvement in the availability of tobacco wrappers. "Last year we had problems with the packaging material which was constantly in short supply but this season we are buying on the open market and this is cheaper," he said. Despite the arrangement that farmers deliver their crop only after booking, some growers, especially the small ones, are still coming with their crop without having made prior arrangements. Mr Mutambanesango said TSF and the Tobacco Industry Marketing Board agreed to set up an office at the sales floor to book such farmers. "Booking is being done between 6am and 12 midnight to ensure all farmers who deliver their crop are able to sell the next day. "Still there is no reason for one to stay at the floors. We have accommodation for farmers but they have to give good reasons for them to stay over at the floors," Mr Mutambanesango said. Enditem