By Alois Vinga
A TOBACCO farmers group has urged producers to withhold their crop until government revises its payment regime that has seen growers receive part of their dues using interbank rates pegged at US$1:25 Zimbabwean dollars.
A single US dollar fetches at least Z$60 on the parallel market.
In a statement, Tobacco Farmers Union of Zimbabwe (TFUZ) expressed dissatisfaction over government’s payment regime.
The farmers group is now mobilising growers not to release their crop until the government offers 100 % foreign currency payment.
“We are calling upon all tobacco farmers to hold their crop until the government pays 100% forex or increases the exchange rate which is currently stagnant at US$1:25 RTGS since the commencement of this year’s selling season.
“The above rate is daylight robbery and an insult to tobacco farmers who spent more than 6 months in the fields working on the crop, to get peanuts at the end of the day,” TFUZ said.
The farmers’ group said the interbank rate was below the parallel market rate which is pegged at US$1:80 RTGS.
The union said contracting companies and the government were benefiting more from the tobacco farmers’ sweat and warned if allowed to continue, this could see a decrease in the number of farmers who will go for the crop next season, coupled with an increase in contract farming.
“It is on public record and it is public knowledge that merchants are paid 100% forex. So, why steal the other 50% from the farmers who are responsible for the crop production,” said the group.
Reserve Bank of Zimbabwe governor, John Mangudya told NewZimbabwe.com recently that chasing after the parallel market exchange rates was not a noble idea.
“Pegging the interbank rate against the parallel market rates is not wise because it is like chasing after the wind,” Mangudya said.
“The parallel market rates are driven by perceptions. So, the best thing to do is to address the challenges causing these rates to spiral beyond control.”