HARARE: Individual small-scale farmers will be able to withdraw cash of up to $1,000 from their first tobacco sale and a maximum of up to $500 for subsequent sales under the 2017 selling season, which commences on Wednesday.
Zimbabwe is suffering from a crippling shortage of dollar notes, and last November capped withdrawals at $50 per day and $150 per week when it introduced ‘bond notes’ to alleviate the crisis.
Bank queues have, however, remained and the central bank is making an exception for the farmers.
Industry regulator, the Tobacco Industry Marketing Board and the Reserve Bank of Zimbabwe (RBZ) said in a joint statement that large-scale commercial farmers would be required to justify their cash requirements through their bankers. Such requests will be considered through the application of KYC principles by their bankers and will be required to give a day’s notice for such cash withdrawals.
“Proceeds from the sale of tobacco will be paid through farmers’ bank accounts and electronic platforms, therefore farmers are encouraged to open bank accounts to facilitate payments,” TIMB said.
The statement said the five percent Tobacco Export Incentive for the current season will be credited to the farmers’ bank accounts on a monthly basis. It said that farmers who are yet to receive the 2016 marketing season incentive should approach TIMB for assistance.
Some farmers are still owed funds under the Tobacco Retention Scheme — a quasi-fiscal scheme by the central bank under former governor Gideon Gono in the 2007/8 season. Growers were obliged to join the scheme, but the central bank failed to pay them. The government issued Treasury Bills worth $30 million in 2014 and 2015 to banks, who now have to pay the farmers.
“The Reserve Bank of Zimbabwe, Tobacco Industry Marketing Board and Tobacco Farmers Association urge farmers who opted to contribute towards the scheme to approach their bankers in order to receive their payment.”
The farmers entitled to the TBs are encouraged to seek proper financial guidance before disposing these financial instruments in the market, at discounts of up to 60 percent.
“There are unscrupulous asset management companies who are taking advantage of farmers under the pretext of assisting them with cash.
“Farmers who have waited for several years to receive the payment are, therefore, encouraged to hold on to their Treasury Bills until maturity in order to realise the full value or to approach registered financial institutions for assistance,” said the central bank.
The 2017 tobacco selling season starts tomorrow under the auction system while the contract sales commence a day later.