Source: Good news for tobacco farmers | The Sunday Mail 24 MAR, 2019
Sharon Munjenjema
Activity is expected to pick up at the tobacco auction floors from tomorrow after Government scrapped, with immediate effect, a two percent Intermediated Money Transfer Tax on tobacco sales whi;e it clarified that farmers will get half of their earnings in United States dollars.
Government last week granted tobacco buyers and sellers immunity from the two percent tax to avoid eroding tobacco farmers’ incomes.
Business has been low since the opening of the floors last Wednesday.
Tobacco growers have also expressed concern about the prices which were pegged at $4,50 per kg on the first day, compared to $4,99 last year.
Prices went lower the second day of trading to an average $3,65 per kg.
At least $7 116 was realised from 51 bales sold on the first day this season compared to $366 003 from 2 217 bales last year.
Sales improved on the second day with 779 bales being sold for $79 603 compared to $450 394 realised from 2 826 bales last year.
Most farmers have been reportedly holding on to their crop due to dissatisfaction with the prices offered.
Tobacco Industry Marketing Board (TIMB) spokesperson Mr Usheunesu Moyo told the Sunday Mail that business at the floors was expected to improve from tomorrow.
“There were some sticking issues with regards the two percent tax and that has since been resolved and we expect all buyers to be buying from Monday onwards,” he said.
“The buyers were not comfortable with the tax and it has now been removed,” he said.
Mr Moyo urged farmers to avoid transacting with middle-men who purchase tobacco at low prices and resell it at a higher margin in connivance with some officials at the auction floors.
Tobacco Association of Zimbabwe president Mr George Seremwe said although business had been low for farmers during the first days, expectations were high for busy trading starting this week.
“Basically prices had been our biggest problem, they were disappointingly low. Also payment modalities were not clear to farmers and buyers were not participating for reasons known to themselves,” he said.
“But I’m told the merchants issues was resolved. Also the Reserve Bank of Zimbabwe has since said farmers will get half their income in United States Dollars and the other part in RTGS$.
The post Good news for tobacco farmers appeared first on Zimbabwe Situation.