Grower returns squeezed

Zimbabwe’s Tobacco Industry Marketing Board (TIMB) has hiked weighing and auction floor charges, further eroding growers’ earnings, according to a story by Fidelity Mhlanga for Newsday.

The charge has been increased from US$4.50 per bale last season to US$7.70 per bale this season, much to the chagrin of growers who feel their earnings are being squeezed.

Mhlanga said that apart from the weighing and auction fees, other deductions incurred by farmers included a tobacco levy of 0.75 percent, TIMB stop order levies of 0.8 percent, and the Ministry of Agriculture levy of US$0.875c per kg.

An industry source told NewsDay that the move by the TIMB would affect the viability of tobacco growing, and added that pegging fees in US$ was in violation of Statutory Instrument 33 of 2019 that required ‘prices’ to be charged in RTGS dollars [Real Time Gross Transfer dollars made up of bond notes, bond coins and RTGS balances (electronic money)].

The sources said the TIMB had not consulted with stakeholders in coming up with a decision that ultimately affected growers’ livelihoods.

Contacted for a comment, TIMB spokesperson Isheunesu Moyo attributed the increase in auction fees to an upsurge in the cost structure at the auction floors. “As regulators we consider the viability of all stakeholders,” he said. “The cost structure of auction floors has gone up as a result of what we expect of them, such as those related to the new payment system, among others.”

At a time when the amount of tobacco that is sold via the auction floors is estimated at 20 percent, there is concern that the increase in charges could drive more growers to contract floors where charges remain low.