Zimbabwe: Storm Brews Between Tobacco Auction Floors

storm is brewing between the Tobacco Industry Marketing Board and four auction floors operating in Zimbabwe over a local company buying the crop from non-contracted farmers in Karoi and Rusape. The auction floors believe the Mashonaland Tobacco Company's moves have caused a drastic decline in tobacco deliveries to the licensed floors hampering business in the process.

The Tobacco Sales Floor, Boka Tobacco Floors, Millennium Tobacco Floors and Premier Tobacco Floors appealed to the Parliamentary Portfolio Committee on Agriculture, Lands, Water, Irrigation and Resettlement to intervene.

The auction floors made the presentations yesterday and their representative Boka Tobacco Floor chief executive Ms Rudo Boka said the system had caused disorderly marketing.

She said auction floors had the capacity to handle the whole crop citing the 1998 season when two auction floors handled 220 million kg of tobacco.

Ms Boka said the licensing of four auction floors and 13 contractors has led to the decline in tobacco volumes forcing auction floors to downsize operations as early as mid May.

The auction floors had reduced staff by 50 percent by May 11, she said.

"The system is now saturated by the number of players in auction as well as contractors resulting in our current situation of disorderly marketing, worsened by the recent selfish and blatant activity by MTC in Karoi and Rusape.

"Auction floors can handle the whole crop and this allows the season to spread for at least six months thereby sustaining employment levels for the period," she said.

The operators complained that they were expected to meet stiff conditions to get licences yet merchants who receive more tobacco do not go under the rigorous test.

Ms Boka said allowing tobacco sales by several players was promoting disorderliness and short comings.

"The industry should be guided by common principles that promote the industry at large and our country in general," she said.

Ms Boka said this will promote the profitability of black owned floors in line with the indigenisation programme. She said it was illogical and criminal that the actions of one elite entity impact negatively on the livelihoods of auction floor employees, the empowerment of local entrepreneurs and the effects of service delivery to tobacco growers.

"Merchants must concentrate on their core businesses to contract, buy and process tobacco. Auction floors were also conce
ed with the price disparities at contract floors.

"There is price discrimination. Merchants should use the auction floor price matrix to determine the price for contracted tobacco.

"They pay US$5,70 per kg on contract and US$4,99 per kg on auction floors, this is direct dis-empowering our self financed black farmers and discouraging them to do on their own for they will end up going for contract."

MTC managing director Mr Kenneth Langley said TIMB had authorised them to buy non-contracted tobacco from farmers in Karoi and Rusape.

"We have no document to prove that we were authorised but tobacco growers willing to sell to our company had to go through TIMB which then give us permission to buy from the responsible farmers," he said.

Mr Langley said MTC had bought tobacco from 487 uncontracted growers whose contribution was 0,2 percent of the total tobacco sales to date.