Harare, Zimbabwe – Bornface Batwero is having a hard time sitting in the driver’s seat of his lorry outside the Tobacco Sales Floor – a shopping center in Harare’s capital where farmers gather from Zimbabwe to sell their crops.
It’s midnight on Monday. Batwero told Al Jazeera that he was still waiting to receive the cigarettes he had sold on Friday, when he arrived from Centenary, a rural area in Mashonaland province, 144km (89 miles) northwest of Harare.
“I’m waiting for my pay tomorrow,” said the 37-year-old tobacco farmer. I don’t know how much he paid me. ”
Uncertainty has been a major factor in Zimbabwe’s export exports.
Tobacco Sales Floor, a subsidiary of the Zimbabwe Stock Exchange, Tobacco Sales Limited, is one of the largest real estate companies in the country.
When COVID-19 swept the country last year, the Tobacco Market – like other retail outlets – developed a new marketing strategy that did not require farmers to be present when selling their crops. Instead, one person represents a group of farmers in the market, to reduce contact, to ensure they get the best.
The batsman is still waiting to collect his money. But beyond the hassle of waiting, she is worried that a large portion of her pay will drop before she sees it, and ruin her profits.
This is because according to the new tobacco marketing laws that have been in place since the outbreak of the coronavirus, farmers receive 60% of their tobacco payments in US dollars – money they take from the market. Another 40% is paid into Zimdollars, Zimbabwean currency, which is linked to their bank accounts.
Time is money
On top of that, 60% of foreign exchange payments are subject to change over the previous year, while tobacco farmers received only 50% of their income in US dollars.
Dissatisfaction is currently based on 40% paid in Zimdollars and a long time to receive.
When tobacco growers sell their crops, the Zimdollar currency is calculated at the exchange rate, which continues to follow the black market. For example, last Monday, the exchange rate was 85 Zimdollars up to $ 1. The black market price was generously giving 130 Zimdollars to $ 1.
In addition, these differences are exacerbated on a daily basis, meaning that farmers have to wait for the Zimdollar currency, then a major risk to the black market is at odds with them, eroding their real profits.
What’s happening: this waiting period could cost them money, leaving many tobacco growers very frustrated with the current system.
Persuade Mubvumbi is a 33-year-old tobacco farmer from Bindura, about 66km (41 miles) north of Harare. He says he does not agree with the new payment system because all the things he needs to cultivate – from crops and fertilizers to tools – are bought in US dollars, not Zimdollars.
“I am not at all happy with the new payment method,” Mubvumbi told Al Jazeera outside the Tobacco Store, where he was also expecting to receive payment for his harvest. “When I get US dollars similar to RTGS [Real Time Gross Settlement dollars, also known as Zimdollars] at the official level, it means I’m losing value, ”he said, hitting the switch to signal a sad turnaround. The exchange rate hurts us so much. ”
Mubvumbi said back in 2009, his tobacco crop gave him $ 6,000 in the market – enough to buy cattle and maize for growing crops, as well as other items.
“We were able to build better homes and buy cars and grow maize. Everything was fine, ”he said.
All of that changed in 2016, when Zimbabwe’s economy was transformed and the central bank – in an attempt to reintroduce local currency – introduced bonds, a set amount that officials said was equivalent to the US dollar, but this dramatically reversed the speculation that continues in Zimdollar to this day.
Last year, Mubvumi is said to have received $ 2,000 in cash on the market for cigarettes, $ 1,000 in cash and in cash from Zimdollars which were exchanged at an exchange rate.
“After changing the money [Zimdollars] in the black market for US dollars, I only have $ 400, ”he said, meaning that the real value of $ 2,000 was only $ 1,400.
He also fears that he will get the same thing this year.
Advocate for good cooperation
In a recent report, the Zimbabwe Tobacco Association, a business group that traded with farmers, doubted whether a payment system was in place. The commission says tobacco farmers should receive at least 70% of those who pay for their products in US dollars, since 70% of the initial, paid income is in US dollars. He also claims that paying 40% to Zimdollar exacerbates the financial problems he is enduring.
“We urge the authorities to reconsider the amount of foreign exchange before the start of the trading period,” the agency said. “Improving farmers’ performance is crucial in ensuring that our goals of the group are met and that the country recognizes that foreign exchange is performing well.”
Tobacco is the fastest growing country in Zimbabwe, with economic growth expected to rise by 8.7% this year to 200 million kilograms due to good rains in three years, according to government estimates.
Exports of tobacco bring in foreign exchange demand – $ 782 million last year, according to the country’s largest bank.
Tafadzwa Muringai, a 36-year-old farmer from Banket, a town 94km (53 miles) northwest of Harare, also mentioned Batwero and Mubvumbi.
“Farmers who paid US dollars while the economy was still doing well did so for themselves. They have more tractors and cars and better hectares, “he told Al Jazeera, adding that he thought the authorities were working to end the epidemic so that farmers could be destroyed now.”