(Last Updated on July 13, 2021 by ZIMDAILY EDITOR)
HARARE – Government has been urged not to licence surrogate contractors for the forthcoming tobacco season and mobilise local funding for the growth of the crop for the benefit of farmers and the nation.
This was said by representatives of tobacco growing farmers’ organisations in separate interviews.
Third party or surrogate merchants are engaged by principal merchants or off-takers in an arrangement where the latter sponsors tobacco production by funding farmers through inputs, working capital and technical expertise.
Farmers have cried foul over discrepancies in prices offered by principal merchants and surrogates, with the former paying an average of US$2,82 per kilogramme, while farmers were being paid an average of US$2,44 by third party contractors for the golden leaf and in some instances as less as US$1,98.
Mr George Seremwe, the president of the Tobacco Association of Zimbabwe, said the surrogates were a threat to the auction system which benefitted farmers.
“The auction system is competitive and benefitted farmers, but right now we see a lot of variances in prices and grading and is damaging the farmer,” he said.
“For the future, we need to look at alternative funding and we are very happy that Government has come in with the Land Bank which I hope will provide funding and ensure that most of our tobacco goes through the auction floor.”
Leader of the Zimbabwe Progressive Tobacco Farmers Association Mr Mutandwa Mutasa called on the Tobacco Industry and Marketing Board to act on the price discrepancies.
“We urge Government to take decisive action on this and we are suggesting that surrogates should not be licensed for the 2021-2022 season and we must also find alternative funding for tobacco,” Mr Mutasa said.
The country’s tobacco is now being grown and sold through contract, raising fears that the auction system will collapse.
Most of the contracting merchants obtain their funding off-shore and repatriate their earnings, making it likely that the country may not be benefitting much from tobacco sales proceeds.