Tobacco Farmers Plead for Funds

Source from:  Financial Gazette (Harare) 08/06/2004

THE government, whose controversial policies have been blamed for the collapse of the tobacco industry, has been urged to find ways of financing the golden leaf instead of relying on the risk-averse private sector. The call follows last week's announcement by the Finance Ministry that it would no longer guarantee borrowings made by tobacco farmers. Davidson Mugabe, president of the Zimbabwe Commercial Farmers' Union, said the government's dithering on the financing of next season's crop could destroy the industry. He said funding was critical because preparations for the next crop were now at an advanced stage, with the deadline for seedbed planting being August 15. "This is the time to make funds available for tobacco, for the country to attain average yields. If we miss this month's deadline, then we should forget about having any meaningful yields. "The government should look at other forms of financing the crop and remember that the farmers require local currency to finance a crop that will bring foreign currency into the country," he said. Mugabe said industry stakeholders were reconvening to map out strategies before approaching the government to reconsider its position. "We will definitely organise ourselves (stakeholders in the tobacco industry) before we meet with the government to explain the implications of the situation." Tobacco output has nosedived during the past three years because of a myriad of viability problems, including lack of inputs, finance, erratic weather as well as low international prices. Latest figures indicate a 32 percent decline in output from last year's 83 million kg. Last year, the auction floors closed at a selling price of US$2.25 per kg, higher than the current price of US$1.88 per kg. Tobacco farmers earn 75 percent of their proceeds at the auction floor rate of $5 600 to the greenback. The 25 percent balance is paid at $824. They also enjoy a support price of $750 per kg. Enditem