Multi-tier pricing eroding earnings, purchasing power: Farmers

FARMERS say the multi-tier pricing of inputs is eroding their earnings and purchasing power, thereby putting farming in disarray.

BY FIDELITY MHLANGA

There is a four-tier pricing in the market — dollar, bond note, swipe and real time gross settlement system (RTGS).

The concern by farmers comes when the country received heavy rains on Monday signalling the beginning of the 2017/18 agricultural season.

This prompted farmers to look for additional inputs as they prepare for the season.

Zimbabwe Tobacco Association chief executive Rodney Ambrose told NewsDay that a multi-tier pricing system on inputs has increased the cost of production for farmers.

“Other issues facing farmers include currency anomalies of the dollar versus bond note, differential pricing of inputs in dollar and RTGS and increase in bond/RTGS cost of production versus static dollar price and export incentive,” he said.

Tobacco farmers’ unions are pushing for a review of the tobacco incentive, with the move prompted by the fact that the sector is one of the biggest earners of foreign currency in the country.

In addition, Ambrose said tobacco farmers were also incensed that prices of imported inputs had increased from 30% to 70%, contractors securing volume through grower debt at a time volumes over auction floors were declining.

“Contractors interest rates remain high along with too short capital expenditure repayment periods.

Compliancy and traceability of tobacco comes with a cost to farmers, which is not being rewarded. Dollar average grower prices are not expected to increase,” he said.

Federation for Farmers’ Union chairperson Wonder Chabikwa said it was a travesty of justice that farmers, who were paid through RTGS, were now being fleeced through inputs price distortions.

“We are actually in trouble, normally as farmers we budget our money before the beginning of the season. But now we are at the implementation stage and the prices being offered at the moment are not the ones we anticipated,” he said.

“As you are aware, maize farmers who delivered their grain to the Grain Marketing Board were paid through RTGS, but farm implement shops are now giving different prices for bond, dollar and RTGS. This is putting us in serious trouble.”

Chabikwa said with the country being an agro-based economy the prevailing environment required government’s intervention to rescue the sector from collapse.

“These price distortions are affecting us on things like farm implement spares, seeds, fertilisers and chemicals. What is worrisome is that even those products, which are not imported, are being priced in dollars. Our plea is for government to stabilise the situation,” he said.

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1 Comment

  1. Cde Rudeologist Chikala

    ” …Our plea is for government to stabilise the situation,”

    kkk – do you mean Cde Matibili here? Vari pa tight avo. He won’t be attending to such trivial manners any time soon!!

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