Farmer representatives fear that the continued suppression
of auction prices might kill the auction system as everyone would be tempted to
move to the contract system. Even now around 95 percent of the crop is planted
and sold through contract.
The auctions were set up for the very large scale
plantation growers who dominated tobacco before land reform. The far larger
number of small-scale growers who dominate the sector, and even many of the
medium-scale growers, prefer contracts.
Tobacco Farmers Union Trust (TFUT) president Mr Victor
Mariranyika said farmers were not happy with the auction prices, adding that
the bulk of them had moved into contracts out of desperation.
Mr Mariranyika called on the Government to intervene for
the auction system to remain viable.
“Prices should be similar,” he said. Tobacco Industry and Marketing Board (TIMB) chairman, Mr Patrick Devenish, said on Monday that crops of the same quality should fetch similar prices.
“I would like to confirm that the TIMB is very concerned
about this,” Mr Devenish said.
He said they “know well” that farmers were getting US$6 at
contract floors and “there is absolutely no reason why the same tobacco at the
auction floor should not sell at that same price”.
“We will be communicating with the trade to try and
understand why they are doing this. We know that auction collusion is not
allowed and we hope it’s not that,” said Mr Devenish.
Competition and Tariff Commission spokesperson Mr Tatenda
Zengeni on Monday said: “We have also started monitoring what is happening at
the auction floors to safeguard the market from any form of collusion that
might be taking pace.”
“The commission is also aware that the majority of the
people that are producing tobacco are largely small-scale farmers and we know
that there might be a tendency to sort of abuse small-scale farmers and we have
activated our monitoring systems to find out what is happening.
“If we find anything that we feel is against the principles
of competition laws, then we will act on the issue.”
Farmers at the auction floors in Harare yesterday said
while prices have been generally fair this season, they expressed concern over
what appears to be a price ceiling of US$4,99c for farmers selling at the
auction, compared with those at the contract floors.
Mrs Olgah Munetsi of Guruve in Mashonaland Central Province
said she was not happy with the auction prices.
“What is frustrating is that we grow the same crop with
those who are under contract but we do not get the same prices; this is unfair.
“We grow the tobacco alone, without financial assistance
from anyone but when we get to the selling of the tobacco at the auction, the
prices are low.
“We know that the contract system is a way of attracting
farmers but we cannot all be contracted. We need these prices to be reviewed
because we grow the same crop,” said Mrs Munetsi.
Mr Farai Ruwizhu of Mt Darwin said the auction system
needed reviewing to ensure all farmers get fair value for their crop.
“We know of certain companies that failed to pay farmers on
time last season and we continue to get low prices at the auction.
“The Government should intervene and save thousands of
farmers who are deprived of fair value by unscrupulous traders,” said Mr
Ruwizhu. Herald
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