PERSONS or companies engaged in the side marketing of tobacco will now be liable to imprisonment as the Government moves to protect one of the country’s major foreign currency earners and source of livelihood for millions of Zimbabweans.
Recently, the Government gazetted Statutory Instrument 77
of 2022 which was published on April 15, a move which will see those engaging
in the side marketing of the golden leaf liable to prosecution.
Under SI 77, any side marketer may be required to
compensate three times the loss suffered by any particular contractor.
According to the Gazette, any person who participates in
side marketing shall be liable to a fine not exceeding Level five (5) or to
imprisonment for a maximum of six (6) months or to both such a fine and
imprisonment.
The move has been taken to protect the industry from
unscrupulous dealers.
There have been reports of rampant side marketing in the
industry which is threatening production.
Side-marketing is a form of contract default where a
contracted tobacco grower sells his or her tobacco to a third party in breach
of a legally binding contractual agreement which states that contracted tobacco
shall only be sold to or bought by the licensed contractor who provided inputs
to such a grower.
Side-marketing is also a form of breach of the law when
auction tobacco is sold other than through auction floors in breach of S40 of
the Tobacco Industry and Marketing Act (Chapter 18:20).
It can also take place when a contracted farmer sells his
or her tobacco to a licensed contractor other than the one who supplied him or
her with inputs.
In a statement, the Tobacco Industry and Marketing Board
(TIMB) announced the prohibition of side marketing and its consequences if the
terms were breached.
“Tobacco contractors are now required to obtain a
contractor’s licence in terms of the regulations. All manner of side marketing
is prohibited. We trust that all stakeholders will abide by the new regulations
and join TIMB in creating a viable and orderly market,” read the statement.
Farmers have since welcomed the move taken by Government to
bring sanity to the tobacco industry.
Zimbabwe Farmers Union secretary general, Mr Paul Zakariya,
said this was a welcome development that would bring sanity, order, and
integrity to the market.
“However, it takes two to tango. If the farmer is
contracted and given adequate resources and they are paid on time, then it is a
very welcome development. Contractors who do not pay must be arrested because
they create opportunities for farmers to end up side marketing.
“When the crop is ready for marketing, contractors must be
ready to pay”, he said.
Tobacco Industry Marketing Board (TIMB) chief executive, Mr
Meanwell Gudu, said the SI would discourage side marketing among farmers and
contractors.
“This is a welcome development because we have always
discouraged side marketing. This move will have a positive impact because it
will enhance our relationship with investors,” he said.
Tobacco Association Zimbabwe president, Mr George Seremwe,
said side marketing was a bad practice.
“Side marketing is a bad thing and we don’t encourage it.
“Contractors should also offer attractive packages to stop
side marketing. Contractual obligations should be thoroughly looked at before
an arrest is done,” he said.
TIMB introduced new regulations for contract tobacco
farming to safeguard the integrity of the contract system so that tobacco
growers would not be short-changed and contractors would be guaranteed their
returns.
This was after a realisation that some fly-by-night
contractors were underfunding farmers and overcharging for inputs while some growers
were side-marketing the contracted crop.
The new regulations were designed to maintain, in decent
order, what has become the major system of financing tobacco production by
eliminating dubious contractors and ensuring farmers fulfil proper contracts.
Contractors are now required to provide proof of commitment
or intent to the TIMB by June 30 of every year and failure to do so will lead
to their suspension from contracting growers for that season.
All contractors are now required to submit to TIMB a
complete schedule of inputs and their costs by June 30 and failure to do so
will lead to suspension for that season.
Contractors are also supposed to submit copies of legally
binding contracts by September 30 of every year and proof of inputs distributed,
either through paid-up invoices or payment plans with suppliers.
All contracted growers without accompanying signed
contracts will be de-contracted.
In addition, TIMB requires contractors to submit a list of
all contracted growers including their contact details by November 30 of each
year. Herald
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