Tobacco farmers to retain forex earnings

GOVERNMENT has increased to 60 percent US-dollar retention of proceeds by tobacco farmers as part of efforts to address perennial concerns by growers over deliveries.

Last year farmers were paid 50 percent of their proceeds in forex with the other 50 percent being in local currency.

The 2021 tobacco selling season is expected to start anytime from now once the Government and its stakeholders agree on critical modalities.

The Tobacco Industry and Marketing Board has also assured traders that Covid-19 mitigation measures were being put in place to ensure stakeholders’ safety.

Lands, Agriculture, Fisheries, Water and Rural Resettlement Minister, Dr Anxious Masuka, said last week that engagements with key industry players were being finalised to ensure smooth business operations.

“The opening of tobacco auctions is coming very soon and we are busy engaging with the buyers together with the Reserve Bank and farmers representatives who have submitted areas they would want improved from last year,” he said while responding to questions in Parliament.

“The Reserve Bank has put in measures to the effect that there is going to be the same treatment to everyone who is exporting produce so that tobacco farmers are happy because they are going to get 60 percent of the US dollar component.

“We are busy ensuring that the two come to an agreement before the opening of the tobacco auction floors.”

Last year, tobacco farmers delivered their crop using the official exchange rate of US$1: ZWL$25, which was prevailing at the time.

“The majority of them cried foul and said they lost out because of that. Now, with the stability in the exchange rate, which has remained constant at the US$83 to US$1 range, I think this will assist them to get money that has a steady value,” he said.

Dr Masuka said whenever selling starts farmers have expressed the desire to procure spares for their equipment among other inputs that require forex.

“Their request is that they should be given more US dollar components because the majority of their inputs are now being sold in US dollars,” he said.

While no date has been set for the selling of the golden leaf to start, farmers are optimistic of positive yields based on the good rainy season. Based on early estimates from the tobacco sector, stakeholders this year project a yield of 200 million kilogrammes up from 185 million kgs attained in 2020. Tobacco is one of the country’s major foreign currency earners, earning the country over US$1 billion annually.

Zimbabwe exports its flu-cured tobacco around the world to countries such as South Africa, United Arab Emirates, Belgium, France, United States of America, China, Zambia, Malawi. Namibia, Cameroon, Algeria, Egypt and South Sudan.-chrociec.ozw