Tobacco Firm to Conduct First Contract Sales Today

Source from:  The Herald (zw) Business Reporter  05/19/2004

ZIMBABWE Leaf Tobacco Company (ZLT) will conduct its first contract sales today (Tuesday) since the beginning of the tobacco selling season last month. Company officials said last week a sizeable batch of the golden leaf would this morning go under the hammer. "A substantial amount of the crop that was grown under the contract scheme will be sold today,'' said an official. Contract growing is a scheme whereby aspiring or smallholder farmers are supplied with inputs in the form of chemicals and cash, on loan basis, for their operations. Farmers are then expected to sell their crop to any of the tobacco auction floors and use the sale proceeds to pay off their loans. Zimbabwe Leaf Tobacco started the scheme with smallholder tobacco growers five years ago in the Chinyika area in Manicaland, long before contract growing had been adopted as a policy. "The initiative was intended to assist smallholder farmers improve the quality and yield of their tobacco and in that way improve their standard of living. "This initiative became a base for our current activities following the adoption by Government of the policy of contract growing," the company said in a statement. Officials said the ZLT aspires to see tobacco production increasing, which, in turn, would increase throughput into their factory. In his monetary policy statement, governor of the Reserve Bank, Dr Gideon Goon, warned against unscrupulous operators who leave farmers hanging in desperation by partially meeting farmer's working capital requirements. "The "briefcase operators" do not carry the support through the entire cycle of the crop but are quick to claim ownership of the harvested crop. "As monetary authorities, we urge the relevant farmer representative bodies, and the Ministry of Lands Agriculture and Rural Development to educate farmers on the operational modalities of viable and mutually beneficial contract growing schemes," said Dr Gono. Contractors were also urged to twin with established merchants who have access to offshore lines of credit so that the country benefits from pre-export inflows of foreign exchange. Enditem