Contract farmers have a right to reject low prices and seek alternative buyers- Made

Contract tobacco farmers have a right to refuse to sell their crop to the contractors if they offer low prices and can seek alternative buyers but they have to pay the contractors for all inputs they will have been given.

This was said by Agriculture Minister Joseph Made in response to a question by Senator Damian Mumvuri who had asked the minister what the government was doing to protect farmers.

“Even under contract there is no contractor, who is supposed to just take the tobacco. The contractor is actually conducting an auction, except that he is doing it for those farmers that are contracted. The contractor is not supposed to just take tobacco and say, the price is this.

“The farmers in actual fact, even under contract have a right to reject the price that is offered at the first instance. At the second instance, if they do not agree the farmer is allowed to sell the crop anywhere but is obligated to pay the total amount of the contract inputs that they received, ” Made said.

He said there were still some challenges that had to be sorted out in the tobacco sector because most of the people that had taken up tobacco farming were small growers who did not have the proper infrastructure to produce quality leaf.

“Number one, government through the Ministry will be focusing on trying to assist and move resources to assist those small farmers in having appropriate infrastructure for curing tobacco.

“Number 2, it is a fact that the bulk of our farmers that are delivering tobacco are smallholder farmers. We also need to look after them in terms of the way they are handled. Indeed, the buyers will take advantage in a certain way and the authority that we have charged to move with speed is TIMB. That is the authority we work with and I have directed that the authority sits with farmers, their representatives, contractors and the auction floors and give a well considered research of how we should handle the matter. At the end of the day, the auction floors are governed by the principle that tobacco is brought in and is auctioned,” Made said.

He said the government was also looking at decentralisation because the number of growers had increased from 600 to 90 000. But decentralisation also had its own problems which had to be looked into first.

“You cannot have the 90 000 households coming to Harare,” he said.

Q & A:

SENATOR MUMVURI: Hon. Made, there is chaos at the tobacco auction floors which has affected the prices of tobacco. The buying of tobacco is also not transparent. What is the Ministry doing to protect the genuine farmers from the middle buyers who have caused a lot of chaos at those auction floors?

THE MINISTER OF AGRICULTURE, MECHANISATION AND IRRIGATION DEVELOPMENT (DR. MADE): I think I will remove the chaotic word side of things and take it a bit lightly by wanting to state that, there are a number of issues besetting the tobacco sector. However, I want to congratulate the farmers. I do not think we should lose sight of the fact that currently, tobacco has injected more than US$400 million into the sector. I do not think there is any other sub-sector that has done that. Let us also compliment both the auction contract system and the farmers themselves.

I want to be very quick also to say, that level of performance, we must jealously guard because it can also be under threat as it is the engine of empowering our people. That is why I appreciate the question because it also gives me the opportunity to inform the Senate in terms of those dynamics.

I have already stated elsewhere outside, that where you have land reform, land reform is only a minute component of agrarian reform. Agrarian reform means the totality of all sub-sectors of agriculture, the marketing institutions, research, teaching, farmers and how we should look at new dispensation in terms of the new structure that has come out.

The issues that relate to pricing of tobacco are related to the quality and the presentation of tobacco. Where we have shortcomings, we must also accept. The biggest shortcoming is the shortage of appropriate tobacco curing facilities with our smallholder farmers and it costs money to put that infrastructure. This is where I want to start from.

Number one, Government through the Ministry will be focusing on trying to assist and move resources to assist those small farmers in having appropriate infrastructure for curing tobacco.
Number 2, it is a fact that the bulk of our farmers that are delivering tobacco are smallholder farmers. We also need to look after them in terms of the way they are handled. Indeed, the buyers will take advantage in a certain way and the authority that we have charged to move with speed is TIMB. That is the authority we work with and I have directed that the authority sits with farmers, their representatives, contractors and the auction floors and give a well considered research of how we should handle the matter. At the end of the day, the auction floors are governed by the principle that tobacco is brought in and is auctioned.

Even under contract there is no contractor, who is supposed to just take the tobacco. The contractor is actually conducting an auction, except that he is doing it for those farmers that are contracted. The contractor is not supposed to just take tobacco and say, the price is this.

The farmers in actual fact, even under contract have a right to reject the price that is offered at the first instance. At the second instance, if they do not agree the farmer is allowed to sell the crop anywhere but is obligated to pay the total amount of the contract inputs that they received.

I want the Senate to know and understand that. Obviously, when we started the contract system we must remember contractors used to refuse to disclose the cost of inputs right up-front until we forced them to do so as they gave the inputs. Now, that system looks more lucrative, let us not forget what we went through to make them a bit more transparent.

I also want the Senate to know that we are the ones who started the contract system at a time no one else was willing to support the farmers. We first opened the contract system to China and Iran. This is not a secret; those are the two countries we opened the contract system to.

We could not leave it closed like that. Others have subsequently joined into that system. Let us not forget when the contract system assisted but that is not a licence to say, we should not look at our system. We should also look at the traditional auction floors and investment that is in there.

At the end of day, I want us to know that the farmers are obligated to bring a quality leaf. When we talk of tobacco and cotton, we have to put in a lot of education to our farmers, the blenders, grading and curing. It also happens in cotton; sometimes you find stones. I appreciate that question but at the end of the day, yes, there are sometimes when a cartel type of behaviour occurs and we will have to find a way to get to the bottom of that matter.

I want to congratulate those farmers who are achieving US$5.99 or even more. Some small farmers also are doing quite well. Let us be open about it and hear all the views. I thank you.

SENATOR NCUBE: Looking at the fact that women farmers who bring their tobacco for auctioning outnumber men, what are you doing about their accommodation? We see them sleeping in the open with children and they are subject to abuse. What is the Ministry’s plans on that?

DR. MADE: That matter is a very broad issue. It deals with the auction people, contractors and the generality of all sub-sectors in terms of agrarian structures. The structure that we used to have was that traditionally, the tobacco farmers were the commercial farmers and so on. A farmer would be bringing in tobacco, sell and move. The structure has changed now from the mere 600 farmers to 90 000 farmers.

This is why I have said what must be examined first is the issue of the decentralisation so that the 90 000 farmers do not come to Harare. It is a pity that I might be talking just here or I might sound as if I have spoken to you already because I have put that statement in the public domain. I am happy that I will speak directly to you on that. That is what we must deal with first. You cannot have the 90 000 households coming to Harare. You can see what challenges it poses.

I want to appreciate what the auction floors have done. I can name Boka Auction Floors because they have made every effort to try and provide better facilities in terms of food, this and that but for as long as the structure is that it is centralised, we have that challenge. When we decentralise, I also want you to know that the essence of auctioning is to get all the buyers under one roof. That means structurally we will have to accept that when we decentralise, it means tobacco will not be sold simultaneously across the country unless if the buyers are willing to put ten teams say we have decentralised to ten places. We want the same buyers to come and bid for that bale of tobacco. So that means we can only say, on Monday – the auction floor, if it is in Karoi, then all the buyers must go there. If we allow the auction people or the buyers to be distributed simultaneously, again we will undermine the farmer. So, that is why I emphasise that there are structural things that we have to look at and this is where the auction companies must also accept. We want to give the first option to those existing auction floors because they have invested.

I am not saying protection as such, but that is what it means that we must give them the first opportunity to decentralise themselves. But, they will talk and say, yes we need investment for us to do that. That is what must preoccupy us. Remember when we talk of the situation there, it is also the Ministry of Health and Child Care. They have set a clinic and the banks have set up infrastructure but the biggest challenge is accommodation.

As you rightly say, it is the women, children and many other vices that have developed. As the Minister of Agriculture, Mechanisation and Irrigation Development and being the lead Ministry, we are looking into that matter. Sometimes we have really put our foot down to say we want to see an improvement. There has been some improvement but again, as the numbers are increasing, you can see the numbers that have increased in terms of the crop itself, which is likely to reach 200 million kilogrammes. The number of producers have grown from 65 000 to 90 000. It is a good question and I thank you.

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