Farmers have called on Government to urgently address the
issue of currency instability as tobacco growers’ earnings are being eroded by
inflation.
Tobacco went on sale on April 27, with farmers getting 50
percent of earnings in United States dollars and the remainder in local
currency at a fixed rate of US$1 to $25.
Latest figures from the Tobacco Industry and Marketing
Board (TIMB) show that 28 million kilogrammes of tobacco worth US$60 million
had been sold by last week.
However, seed and fertiliser suppliers are pegging inputs
at parallel market exchange rates.
Last week, parallel market foreign exchange rates went
haywire, with mobile money transfer rates at between US$1 to $60 and $70 from
about US$1 to $40, while the greenback traded at an equivalent $40 in cash from
about $30.
As the currency volatility bites, farmers have been
lobbying for a floating exchange rate or payment of a revised higher retention
threshold of 75 percent in foreign currency to beat inflationary pressures.
Zimbabwe Farmers Union (ZFU) executive director Mr Paul
Zakariya said tobacco farmers were hard hit by the loss of value of the local
currency.
Farmers are urging the Reserve Bank of Zimbabwe and the
Ministry of Finance and Economic Development to consider their concerns.
Repeated efforts to get a comment from the RBZ Governor Dr
John Mangudya and his deputy Dr Kupukile Mlambo were fruitless yesterday as
their mobile phones went unanswered.
Finance and Economic Development Ministry spokesperson Mr
Clive Mphambela said he was not aware of the recommendations from ZFU and TIMB
over the farmers’ concerns.
“I cannot comment on this issue because I haven’t seen the
letters,” he said.
Mr Zakariya said: “Pegging the fixed exchange rate at US$1 to $25 is not
sensitive to the realities on the market.
“Something has to be done because suppliers are not pegging
prices using the official rate.
“This means that farmers’ earnings have been reduced.”
Mr Zakariya said if the RBZ cannot deal with currency
stabilisation, as it is appearing that there is no solution in sight, they must
consider other alternatives.
“We cannot go for another week with a fixed rate as prices
of goods and services are skyrocketing at an alarming rate.”
TIMB chief executive officer Dr Andrew Matibiri said the
board had forwarded the concerns of farmers to Government.
“The matter is being looked into by the authorities, as you
would appreciate that the currency problems are not just affecting tobacco
farmers, but the whole economy,” he said.
The golden leaf is estimated to sustain over 100 000
households in the country.
This year, tobacco sales are projected to take a 20 percent
plunge after reaching an all-time high of 258 million kilogrammes last year.
Sunday Mail
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