Zimbabwe Farmers Demand Currency Devaluation

Harare, Zimbabwe — Zimbabwean tobacco farmers, the country's biggest foreign currency earners, are demanding a devaluation of the local dollar before sales of their crop start in April, sources said Monday.

Last year, the farmers withheld their crop from auction floors to press their demand for devaluation, which the government later agreed to.

The farmers' representative body, the Zimbabwe Tobacco Association or ZTA, said Monday that devaluation of the local currency would help cushion growers against rising production costs precipitated by high inflation.

"We are not happy with the current exchange rate of 55 Zimbabwean dollars to one US dollar. Farmers are buying inputs at 75 Zimbabwean dollars to one US dollar, which means a diminishing return on the investment," said Association Director, Pat Davis.

But analysts say the government, eager to avoid worsening economic hardships ahead of a crucial presidential election next year, would be hard-pressed to agree to the tobacco farmers' latest request.

Zimbabwe, one of the world's top tobacco producers, expects to harvest about 200 million kilogrammes of the crop this year, 37.7 million kg less than last year.

In 2000, the country earned 339 million US dollars from tobacco, which is mainly grown by large-scale commercial farmers.


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