The Tobacco Industry and Marketing Board (TIMB) will crack down on all errant tobacco merchants and cartels as it moves to deal with corrupt activities at the floors and bring sanity to the billion dollar
Last season, tobacco merchants are reported to have compensated farmers to the tune of $6m when they made out-of-court settlements after forcing farmers to sell their crops at their floors.
TIMB was criticised for not taking action on merchants who preyed on unsuspecting farmers. Andrew Matibiri, TIMB chief executive, now says the tobacco regulator will closely monitor activity at the floors and plug leakages.
“In this current tobacco selling season,” he says, “we are ready to pounce on all errant tobacco merchants, mafia, cartels and middlemen who make tobacco trading difficult or make life harder for our farmers who are putting so much effort to generate forex for the country.
“We are going to revoke licences for all unscrupulous dealers and suspend them for a year or two. Some contractors like Agritrade witnessed our ugly side last season when we closed their floors in Rusape. This year we will deal decisively with all cartels or mafia. The police will be readily available to help us in these operations.”
TIMB, Matibiri says, will not leave any stone unturned, as no one will be spared in its bid to deal with corruption at the tobacco floors.
He believes farmers should earn enough from their labour so that they can go back to the field to produce again.
Of the US$900m available this selling season, around US$500m is retained by contractors through inputs and other critical commodities in the sector.
Paul Zakariya, executive director of the Zimbabwe Farmers Union, who headed farmers’ compensation claimes from contractors last year, believes that the prejudicing of farmers by tobacco cartels and mafia will be minimal this year due to the punitive fines imposed on those who fleeced farmers.
“Every year has its own problems but we are confident that due to last year’s out of court settlement, some tobacco contractors now know that farmers need to be respected and should not be taken for granted,” Zakariya says, adding:
“We hope that this year we won’t have double registrations for farmers as all contractors were called to submit databases, hectarage and possible output details for every farmer to TIMB for verifications. We just hope that this will be a good selling season.”
Surprise compliance by TSF
Even Tobacco Sales Floor (TSF) has promised to comply with TIMB regulations. TSF houses some controversial contractors, such as Ethical Leaf Tobacco, which last year registered farmers without their consent to coerce them to sell their tobacco at the company’s floors.
Peter Mujaya, the head of agriculture cluster at Tobacco Sales Limited (TSL), the mother company of TSF, confirmed that: “This year we promise to comply with TIMB’s rules and regulations, and have good practices, for the good of our industry. Incidents of farmers being turned away at our booking office, on grounds of being contracted growers as per the TIMB booking system, will not happen this season.”
Meanwhile, TIMB and the monetary authorities who expected golden leaf deliveries to start flowing smoothly at the floors this week, have to think again about what should be done to improve deliveries as farmers remain defiant.
Tobacco farmers are demanding good prices for their sweat and assurances for the 50% forex retention agreed with the monetary authorities to start delivering their crops to the floors.
Farmers are refusing to sell their tobacco if the Reserve Bank of Zimbabwe and other tobacco sector stakeholders do not call for an urgent meeting with them to break the stalemate.
A survey done by this publication showed that one of the country’s largest contractors Tian Ze, was not even active on the market.
By Day 9, Friday last week, farmers had delivered 538,147 kilogrammes of tobacco while earning $896,166 in the process, against 6.7 million kilos delivered during the same period last year. Farmers grossed $18.8m by the same time last year.
This year’s average price stands at US$1.67 per kg against last year’s US$2.78.
Despite TIMB’s calls to deal with middlemen, the authorities have just created a conducive environment for them as most farmers prefer the middlemen who give them better prices than those on the auction floors.
Funny Matawu, a Mazowe farmer, said: “I will not hesitate to give my tobacco to anyone as long as I get good prices, whether it’s the middlemen or whoever. If TIMB and RBZ don’t act on time, most tobacco will be sold through unofficial means.”
Tobacco is the second largest earner of forex after gold, and contributes close to 20% of the country’s exports. Last year, tobacco earned close to $900m against $1.6bn gold exports.
Already $200m worth of exports has been made through tobacco, with China and South Africa being Zimbabwe’s largest tobacco export destinations.