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Zimbabwe: Irony of Rich Farmers Without Cash
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Financial Gazette (Harare)
16 May 2008
Posted to the web 16 May 2008
Shame Makoshori
Harare
ZIMBABWE'S tobacco farmers are having cash problems. They have so much money in their pockets, but cannot buy what they need because it is in the form of cheques.
It is something that has so seriously dejected them that they are ruing ever planting the golden leaf, one of Zimbabwe's prime export earners.
Huddled at the tobacco auction floors at night because they cannot pay for hotel or accommodation at the cheap lodges, the farmers have obviously become despondent.
Meanwhile, the huge sums of money written on their cheques are becoming worthless with each passing day due to Zimbabwe's hyperinflationary environment.
Three weeks after the opening of the tobacco-selling season, more than 2 000 farmers, most of them small scale growers, are still camped at the country's three major auction floors, unable to cash their cheques.
Inevitably, the country's hyperinflation has been eroding the value of their earnings, which had been boosted following the liberalisation of the foreign currency market that resulted in the Zimbabwe dollar exchange rate weakening from $30 000 per US dollar to over $200 million per US dollar.
While the depreciation of the domestic currency brought smiles to the farmers' faces, it has now turned out that the other side of the currency movement has hurt their pockets because of an escalation of prices.
Amos Jimu says he left Centenary three weeks ago, and planned to buy 10 bars of bath soap after getting payment for his tobacco.
Then, he says, a bar of soap cost $120 million. Now, he says, dejectedly, he has to fork out $500 million for the same bar of soap, assuming he is able to cash his cheque now.
"We are spending sleepless nights in the open space here watching the fruits of our hard labour slipping away, " Jimu said.
"I planned to buy fertilisers and other inputs with my first deliveries, which I could afford three weeks ago, but not anymore," he said.
With inflation escalating at an unprecedented pace, the more the farmers delay buying what they need, the more their earnings will be eroded while still in their hands.
Eventually, they will be unable to buy anything, including inputs for the next farming season, they contend.
"I am now a beggar. I have this cheque in my pocket, but everyday, I go to those women selling food and leave my National Identity Card as surety so that I get some food to eat. It is terrible," said Jimu.
A young farmer, Tongai Zambara said: "If the situation remains like this, tobacco output will fall next season. We wanted to go back to produce more next year but if we end up having more cheques than cash, it will not make sense to continue," he said.
The prices were "favourable" this year, at US$2,50 per kilogramme, having opened the marketing season at US$4 per kilogramme. But farmers revealed how with such good prices, they had been short-changed by both the auction floors and retailers eager to reap profits out of their desperation.
Zambara, who has spent two weeks queuing for money at Zitac, an auction floor, said he had gone into retail shops to cash his cheque, but prices were increased immediately.
A DVD player costing $10 billion was now priced at $25 billion, while a television set costing $25 billion had its price hiked to $45 billion.
When buying from the shop, Zambara said he was asked to spend not less than 90 percent of his $300 billion so that he could get the balance in cash.
At the Tobacco Sales Floor (TSF), one farmer who had sold tobacco worth $300 billion said he had been given $5 billion. The remainder was settled in cheque.
A farmer from Guruve said retailers had rejected the cheques, leaving them in a precarious state.
At Zitac, The Financial Gazette witnessed more than 1 000 farmers in long queues to process their documents.
Outside the auction floors, women and children, looking exhausted, slept under the harsh afternoon sun, waiting for a whiff of good news that the auction floors could finally pay them in cash.
But that news has been hard to come by, and three weeks could turn to four weeks, then five, six....And they keep wondering: where is the justice, and is it all worth the toil?
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The answer would hinge on their choice of plant in the next farming season.
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| Copyright © 2008 Financial Gazette. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here. | |||||||||||||||||||||||||||||
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