Zimbabwe: Huge Outcry over Tobacco Prices

Source from:  Manica Post  04/15/2013

TOBACCO growers in Manicaland have decried the "good crop and poor price" fiasco obtaining at the country's auction floors arguing that the trend was gradually forcing them out of the farming business.

Those interviewed this week argued their hopes of getting a return of their investment was being quashed by a cartel of tobacco buyers who were stifling prices in order to maximize on profits when exporting the gold leaf.

As a result, the farmers are racking up huge losses due to the stagnation of prices at the auction floors.

Farmers said the ever nose-diving price regime impacted them negatively, and drowned them in serious debt.

They are accusing the buyers of fleecing them by devising a two-tier procurement regime in which the gold leaf from non-contracted farmers was fetching the least prices when compared to their contracted counterparts.

Their crop price was fetching $4.99 for non-contract crop and $5.60 for the contracted crop.

The farmers said the Tobacco Industry Marketing Board (TIMB) was doing nothing to protect and has negated them to be tossed as pawns in the hands of four local buyers -Tobacco Sales Floor, Boka Tobacco Floors, Zimbabwe Tobacco Auction Centre and TSL.

Tobacco farmer Mr Justine Mutasa said the development in the industry fly in the face of economic empowerment.

He bemoaned that high quality tobacco was going for a song, and eventually fetches high prices on the international market.

Mr Mutasa further argued that TIMB should protect hard done farmers by ensuring that tobacco prices were pegged on quality irrespective of whether it was grown under contract or non-contract.

"The current price regime makes it possible for inferior tobacco to fetch high prices than high quality gold leaf grown by self financing farmers.

"This is an attempt by cartel to push people into a contract farming system. They are out to sabotage our economy.

"These cartels must be exposed. Why is the tobacco price stagnant at $4. 99. Are you saying  primings fetch the same prices as the upper leaves?" said Mr Mutasa.

 The Tobacco Association of Zimbabwe president Mr David Guy Mutasa also echoed the same sentiment and urged farmers not to rush to sell their crop before prices were confirmed.

"What is happening is not fair at all to the farmer. Even if they were to buy at $6, you will find that the farmer would have been ripped off because they export the same leaf at between $16 and $20.

"We are dealing with cartels that are out to maximize profits without looking at what the farmer has gone through. We have tried to urge farmers not to sell till there is an improvement of the price, but individualism is taking centre stage as each farmer looks at their situation.

"The other thing militating against our advice is that in the past those who held on the crop suffered worse as the prices plunged further and that explains why most are opting to sell," said Mr Mutasa.

"That is a great swindle. Farmers expect a return on their investment, but they are paying pittance. They are reaping off farmers. They are frustrating and pushing farmers out of business," said Mr Mutasa.

He said due to the low prices being offered, farmers were no longer able to pay transporters, their workers and bank loans.

He said since the advent of the land reform, there has been continuing improvements in farm machinery, knowledge, better seeds, better fertilizers, more irrigation, and effective pest control that have made most farmers enterprising, but that has not transmuted into monetary gain.

Mr Mutasa said it was disturbing that prices were going down when the quality of the leaf being delivered had improved significantly.

Mr Gijima Msindo said Government should bring sanity to the tobacco industry by subsidizing reaped-off farmers. Failure of which, he said, very few farmers will be able to do business come 2013/14 season.

He said contract farmers were also worse off because the received inputs at astronomical costs.

TIMB boss Mrs Monica Chimanasa said they were looking into the farmers' grievances. Enditem