Tobacco merchants have paid close to US$1m for the crop delivered last year after the Tobacco Industry and Marketing Board (TIMB) threatened to crack the whip on players that still owed farmers.
TIMB threatened to cancel defaulting merchants’ licences.
“Tobacco merchants have paid close to US$1m to tobacco growers with only a small portion left and we are dealing with that matter to ensure they are paid as soon as possible,” TIMB chairman Patrick Devenish told Business Times.
He added: “We don’t want that to happen as we will act accordingly to stop the tobacco merchants from trading till they pay farmers.”
Devenish said buyers and contractors will this year be required to strictly pay within 48 hours of delivery and any player who violates the rules will have the operating licence either withdrawn or cancelled.
He said agreements have been made with responsible tobacco companies and plans were in place to ensure the growers are paid within the stipulated time.
Last year, TIMB blacklisted some tobacco merchants after they failed to pay the farmers for deliveries made.
There were around six companies that did not get their licenses renewed.
“To enforce this, we stand guided by the Contractors’ Compliance Administration Framework.
“In the past years, complaints were levelled against the transparency in our contracting system, adhering to agreed terms, and executing obligations and responsibilities timeously.
“Reports of collusion by merchants and middlemen to re-handle tobacco bought cheaply from farmers were also brought forward,” he said.
TIMB is struggling to deal with side-marketing as farmers sell to other people to get the value out of the golden leaf.
Tobacco farmers also have debts to TIMB and other contractors due to viability challenges.
“Some growers have outstanding debts to contracting companies as well as TIMB for the Tobacco Inputs Credit Scheme from the previous seasons. We intend to ensure those loans are paid back as well so that all players in the value chain operate profitably.
TIMB has expanded the Inspectorate unit and is now armed with SI 77 of 2022 prohibiting side marketing as well as the Contractors’ Compliance Administration Framework.
The board said errant behaviour will become an issue of the past.