Farmers cry foul over 75 percent retention

By Vimbai Kamoyo

Tobacco farmers have cried foul over the 75 percent foreign currency retention saying it’s too little to cover their costs.

The Tobacco and Industry Marketing Board (TIMB) advised tobacco farmers that the 75/25 ration would be used in payment this season with the former being forex and the latter being the local currency.

Last season it was 85/15, which the farmers also complained about, preferring to be paid all in hard currency.

“Reference is made to a letter received from the RBZ dated January 29, 2024, referenced EXP/REB22WH/2024/001956, the US dollar retention was standardized at 75 percent in line with the retention level for other market players. This effectively means that the 25 percent will be paid to tobacco in local currency,” said TIMB in a statement.

The farmers were however not amused by the arrangement.

Victor Gwesu, a farmer in Mvurwi said the 75 percent was too little considering that the local currency they would be given would be an official rate which does not translate into the realistic situation on the market.

“They say they will give us 25 percent as RTGS, which is not fair as everybody knows that the official rate is not reflective of the situation on the ground. We will have to buy forex on the parallel market and it’s not sustainable,” he said.

Dennis Zacharia, the Executive Director of the Zimbabwe Farmers Union, echoed his sentiments.

“25 percent of the tobacco proceeds is a very significant portion to be lost on the exchange rate and acts as tax to the tobacco growers,” he said.