Zimbabwe: RBZ Relaxes Payment Modalities for Tobacco Growers

Reserve Bank of Zimbabwe.

Reserve Bank of Zimbabwe (RBZ) has relaxed the payment modalities for tobacco farmers in a development which will see the growers retaining their foreign currency portion as free funds.

The development marks a major climb down from last year's arrangements where tobacco farmers were paid half their earnings through their Zimbabwe dollar accounts with the remaining half being deposited into their Foreign Currency Accounts (FCA).

Most farmers faced difficulties in accessing their hard currency due to failure to appreciate the processes involved.

But speaking at the official opening of the 2021 tobacco marketing season at the Tobacco Sales Floor in Harare, Tuesday, Tobacco Industry Marketing Board (TIMB) chairperson, Patrick Devenish said after fruitful discussions with the central bank, payment conditions were relaxed.

"The industry together with the RBZ have jointly put in place improved payment measures to ensure that tobacco growers get full value for their crop and are simultaneously paid within the shortest possible time.

"This will see growers being paid 60% of their sales proceeds in foreign currency after deductions of approved foreign currency denominated loans, and the 40% portion, shall be converted at the prevailing Auction exchange rate on the day of sale and paid in local currency," he said.

He said that the 60% foreign currency entitlement to tobacco growers shall be treated as free funds.

Devenish bemoaned the generally wet conditions in which the crop was grown this year which prompted nutrient leaching and incidences of some bacterial diseases, particularly angular leaf spot but generally a fair to good quality tobacco leaf will be marketed.

During the 2019/20 season tobacco hectares went up by 6.84% from 117,000 ha in 2019/20 season to 125,000 ha.

He said for the current marketing season, the number of registered growers stands at 145,625 compared to 147,931 in the prior year with more than 1,916 growers having registered for the first time.

"The board has licensed three auction floors for the 2021 marketing season, and these are, Tobacco Sales Floor (TSF), Boka Tobacco Floors (BTF), and Premier Tobacco Auction Floor (PTAF).

"As usual, the board inspected the level of preparedness at the licensed auction floors and the three floors were found to be ready for business including compliance to COVID-19 guidelines," Devenish said.

He added there would be decentralised contract sales at five designated centres. These are in Karoi, Mvurwi, Bindura, Marondera and Rusape.

More From: New Zimbabwe

Don't Miss

AllAfrica publishes around 800 reports a day from more than 130 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.