April 28, 2020

Address exchange rate issue: Tobacco farmers

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Takudzwa Chihambakwe             

With two days to go before tobacco auction floors open, farmers of the golden leaf have called on the Reserve Bank of Zimbabwe to address the difference between the interbank rate and the prevailing parallel market rate.

The farmers, who are generally in agreement with retaining 50% of their earnings in foreign currency worry that the amount they will get for their produce in local currency will be next to nothing at the current interbank rate of $US1 equating to ZW$25, while the parallel market is trading at $US1 is to RTGS$50.

Zimbabwe Tobacco Association spokesperson, Casper Mlambo says farmers want the gap narrowed when payments are made.

“Farmers are happy with retaining 50% of their earnings in forex though they would have loved to get more. The main issue is now on the Zimbabwe dollar portion which will be paid out at the interbank rate, currently at 1:25,” said Mlambo.

“The dollar is trading at 45 when using the unofficial rate. So if farmers are getting paid at a rate of 25 it means they will struggle to get inputs for the next season.So the question is who will fund the difference there,” shared Mlambo.

He said farmers are proposing that the RBZ should use the parallel market rate when paying them.

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