This week, Zimbabwe’s Tobacco Auction Floors were meant to open for trading, weeks earlier than normally scheduled. Although the first few weeks at the floors are usually slow while farmers wait for competitive prices, not one farmer brought forward their golden leaf.

The tobacco farmers are said to be telling ‘Gono’, our Reserve Bank Governor, to give them a favourable exchange rate that will allow them to match their production costs.The concerns of the tobacco farmers are legitimate. If you spend XYZ on production you would also expect to be paid an amount that is more than XYZ and is profitable. Previously Gono created a special exchange rate for tobacco farmers but this year it seems he has had enough of farmers.

Recently the governor announced he would no longer be assisting our A2 farmers with any inputs or subsidised fuel as has been the case over the last seven years. It seems like its payback time for the farmers who have said: if there isn’t “devaluation”, then you won’t get any golden leaf.

Speaking on our one and only television station last night during News @ 8, Gono warned farmers not to hold the state to ransom over the exchange rate. “Lets not fight, it’s not necessary,” the governor said. He said that the government has given farmers subsidies in the form electricity, fuel and free inputs. The governor added, “this is tantamount to biting the hand that feeds you”.

The Financial Gazette reported today that there were no bookings at the Tobacco Auction Floors. The paper quoted the acting Chief Executive of the Tobacco Industry and Marketing Board (TIMB) as saying the tobacco farmers wanted an exchange rate in line with the parallel market. The official rate of the Zimbabwean dollar is pegged at $250 to the greenback while the parallel market rate is $13 000.

Will the farmers continue to hold the state to ransom? Only time will tell.

This entry was posted on March 15th, 2007 at 2:09 pm by Taurai Maduna and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.