News / National
Toiling for RTGS dollars: Tale of Zimbabwe farmers
25 Feb 2019 at 08:23hrs | Views
ZIMBABWE'S top major foreign currency earners - tobacco growers - toil and till the soils growing the crop that drives the economy, only for their sweat to be rewarded in real time gross settlement (RTGS) dollars, a currency that threatens the crop and livelihood of the farmers.
Government has proposed to pay the farmers about 20% of their earnings in foreign currency, while the Reserve Bank of Zimbabwe will retain 80%, as the nation struggles with foreign currency shortages, an economic meltdown and social unrest.
Farmers can ill-afford this payment arrangement and say it could drive operations into the ground.
The golden leaf production could decline significantly next year if farmers are not paid at least 80% of their earnings in hard currency, they charge.
An unassuming former businessman, Denford Mutwiwa, who made a full transition from selling stationery to being a leader in growing the golden leaf, opened up on the investment and work put into farming the crop.
Employing 473 full-time workers, Mutwiwa, who initially was reluctant to tell his story, is the second biggest tobacco farmer in Headlands, with 250 hectares of land under the golden leaf, 170ha of maize and 12ha under sugar beans.
Having started farming in 2002 at the height of the land reform programme, Mutwiwa was initially allocated 30 hectares of land, where he cut his teeth in commercial farming, ditching his successful and growing stationery business.
Today, he rents a total of six farms that surround Teryden Farm, all of them owned by people who were allocated land during the land reform programme, but have never bothered to take up the land.
Over the past two years that he has taken leases on the farms, he has invested immensely, installing underground pipes, centre pivots and building homesteads for his workers.
Massive investment has also gone into construction of modern barns to cure the leaf, store it and grading
pans.
It's a Saturday and owing to climate change, the sun is baking in the high altitudes of Manicaland, an area which normally is cool, making the growing of grains a difficult feat to undertake.
The water levels at the dam, which irrigates the black soils of Mutwiwa's farms, are dangerously low and threaten any plans of a winter crop, but that does not stop the farmer from chasing his dreams.
In a small and soft voice, as he drags his feet clad in brown safety shoes, Mutwiwa says the price distortions in the market will have a great effect on the crop he will decide to grow next season, and if he will be able to meet the costs of production and keep his workers on the pay sheet.
Expecting to harvest an average of 3,5 tonnes (30 bales) of the golden leaf per hectare, Mutwiwa, a beneficiary of the land reform programme, is likely to earn $3,75 million at $500 per bale from his crop in bond notes, if nothing changes.
This could result in a loss of more than $1 million, where costs of inputs at RTGS dollar value is $18 000 per hectare translating to $4,5 million for the 250ha under the crop.
He was later allocated the 169ha Teryden Farm, which has only 90ha of arable land about 186km east of Harare. Mutwiwa has made a staggering investment on the land, buying 12
centre pivots at a cost of $426 000.
"This investment in pipes, pumping generators and centre pivots was made in US dollars, I bought this equipment from South Africa, and am glad to say that it's all paid in full," he says.
Apart from the irrigation equipment, Mutwiwa invested in labour, chemicals and power.
"The cost before the price madness of last year was around $8 000 per hectare, but it has since jumped to around
$18 000 before we include the cost of grading and transportation of the leaf to auction floors," he said.
In his inventory, he has trucks, 15 tractors and motor bikes that work on the land, consuming an average of 600 litres of diesel daily and the sudden increase in fuel prices in
January had a major impact on his operations.
The golden leaf is labour intensive. Getting the best grade needs clinical precision; from the seed bed, planting, agronomy, grading and eventually selling, forcing Mutwiwa to abandon city life and now permanently resident at the farm.
"You have to be at the farm 24/7 so that you get everything just right. The fertiliser has to be just OK, the chemical application also needs to be done correctly. It's different from grains like maize, you just plant, weed and harvest then sell, tobacco is a 12-month crop, from May 1, to the next May when you go to the auction floors," he says.
Every plant has to be treated individually. After it grows an average of 18 leaves, its top is removed to prevent it from growing further.
The farmers then apply suckeride and suckercide on every plant to ensure that any shoots are killed because they take away the feed from the leaves.
He talks less about the maize crop, which he grows for national service, saying it is a loss-making business.
The producer price of maize is pegged at $390 per tonne, while the cost per hectare, which has a yield capacity of an average of six tonnes, is now around $1 500.
Farmers say any producer price below $700 per tonne would see them run into huge losses, threatening food security and pushing the nation towards exports.
Meanwhile, Zambia's producer price has gone down to $110 per tonne, but farmers still enjoy profits because farming inputs costs remain low.
During winter, Mutwiwa delivered 1 500 tonnes of wheat, and was paid through RTGS, leaving his books in the red to the point that next season, he could just stay away from the crop.
Currently, the country is facing a serious shortage of cereals and has been forced to import wheat, where it is paying suppliers in hard currency.
Reserve Bank of Zimbabwe governor John Mangudya says he is aware of the concerns by the farmers and the challenges they face.
"We met with the tobacco industry representatives and had a good dialogue," Mangudya said, without giving further details.
Just some 20km away from Teryden Farm is Zimbabwe's biggest tobacco farmer Graeme Chadwick, who has 1 000ha of land under tobacco, yet he owns no farm to his name.
Mutwiwa is the second biggest tobacco farmer in Manicaland after Chadwick and aims to increase his hectarage to over 600, if he gets more land, and the RBZ starts paying in US$.
A nostalgic farmer, he remembers the period between 2009 and 2012 as some of his best years in his farming career, where there was open market prices and farmers pocketed all
their earnings in hard currency.
Using his earnings from the golden leaf, he has managed to take his children through top schools and sent two to top universities in the United States.
Grey hair sprouting in his head shows the wisdom of years as he found his feet in the industry, yet the quality of his simple clothing and skin tells a tale of a man favoured by fortune in his chosen trade.
Government has proposed to pay the farmers about 20% of their earnings in foreign currency, while the Reserve Bank of Zimbabwe will retain 80%, as the nation struggles with foreign currency shortages, an economic meltdown and social unrest.
Farmers can ill-afford this payment arrangement and say it could drive operations into the ground.
The golden leaf production could decline significantly next year if farmers are not paid at least 80% of their earnings in hard currency, they charge.
An unassuming former businessman, Denford Mutwiwa, who made a full transition from selling stationery to being a leader in growing the golden leaf, opened up on the investment and work put into farming the crop.
Employing 473 full-time workers, Mutwiwa, who initially was reluctant to tell his story, is the second biggest tobacco farmer in Headlands, with 250 hectares of land under the golden leaf, 170ha of maize and 12ha under sugar beans.
Having started farming in 2002 at the height of the land reform programme, Mutwiwa was initially allocated 30 hectares of land, where he cut his teeth in commercial farming, ditching his successful and growing stationery business.
Today, he rents a total of six farms that surround Teryden Farm, all of them owned by people who were allocated land during the land reform programme, but have never bothered to take up the land.
Over the past two years that he has taken leases on the farms, he has invested immensely, installing underground pipes, centre pivots and building homesteads for his workers.
Massive investment has also gone into construction of modern barns to cure the leaf, store it and grading
pans.
It's a Saturday and owing to climate change, the sun is baking in the high altitudes of Manicaland, an area which normally is cool, making the growing of grains a difficult feat to undertake.
The water levels at the dam, which irrigates the black soils of Mutwiwa's farms, are dangerously low and threaten any plans of a winter crop, but that does not stop the farmer from chasing his dreams.
In a small and soft voice, as he drags his feet clad in brown safety shoes, Mutwiwa says the price distortions in the market will have a great effect on the crop he will decide to grow next season, and if he will be able to meet the costs of production and keep his workers on the pay sheet.
Expecting to harvest an average of 3,5 tonnes (30 bales) of the golden leaf per hectare, Mutwiwa, a beneficiary of the land reform programme, is likely to earn $3,75 million at $500 per bale from his crop in bond notes, if nothing changes.
This could result in a loss of more than $1 million, where costs of inputs at RTGS dollar value is $18 000 per hectare translating to $4,5 million for the 250ha under the crop.
He was later allocated the 169ha Teryden Farm, which has only 90ha of arable land about 186km east of Harare. Mutwiwa has made a staggering investment on the land, buying 12
centre pivots at a cost of $426 000.
"This investment in pipes, pumping generators and centre pivots was made in US dollars, I bought this equipment from South Africa, and am glad to say that it's all paid in full," he says.
Apart from the irrigation equipment, Mutwiwa invested in labour, chemicals and power.
"The cost before the price madness of last year was around $8 000 per hectare, but it has since jumped to around
$18 000 before we include the cost of grading and transportation of the leaf to auction floors," he said.
In his inventory, he has trucks, 15 tractors and motor bikes that work on the land, consuming an average of 600 litres of diesel daily and the sudden increase in fuel prices in
January had a major impact on his operations.
The golden leaf is labour intensive. Getting the best grade needs clinical precision; from the seed bed, planting, agronomy, grading and eventually selling, forcing Mutwiwa to abandon city life and now permanently resident at the farm.
"You have to be at the farm 24/7 so that you get everything just right. The fertiliser has to be just OK, the chemical application also needs to be done correctly. It's different from grains like maize, you just plant, weed and harvest then sell, tobacco is a 12-month crop, from May 1, to the next May when you go to the auction floors," he says.
Every plant has to be treated individually. After it grows an average of 18 leaves, its top is removed to prevent it from growing further.
The farmers then apply suckeride and suckercide on every plant to ensure that any shoots are killed because they take away the feed from the leaves.
He talks less about the maize crop, which he grows for national service, saying it is a loss-making business.
The producer price of maize is pegged at $390 per tonne, while the cost per hectare, which has a yield capacity of an average of six tonnes, is now around $1 500.
Farmers say any producer price below $700 per tonne would see them run into huge losses, threatening food security and pushing the nation towards exports.
Meanwhile, Zambia's producer price has gone down to $110 per tonne, but farmers still enjoy profits because farming inputs costs remain low.
During winter, Mutwiwa delivered 1 500 tonnes of wheat, and was paid through RTGS, leaving his books in the red to the point that next season, he could just stay away from the crop.
Currently, the country is facing a serious shortage of cereals and has been forced to import wheat, where it is paying suppliers in hard currency.
Reserve Bank of Zimbabwe governor John Mangudya says he is aware of the concerns by the farmers and the challenges they face.
"We met with the tobacco industry representatives and had a good dialogue," Mangudya said, without giving further details.
Just some 20km away from Teryden Farm is Zimbabwe's biggest tobacco farmer Graeme Chadwick, who has 1 000ha of land under tobacco, yet he owns no farm to his name.
Mutwiwa is the second biggest tobacco farmer in Manicaland after Chadwick and aims to increase his hectarage to over 600, if he gets more land, and the RBZ starts paying in US$.
A nostalgic farmer, he remembers the period between 2009 and 2012 as some of his best years in his farming career, where there was open market prices and farmers pocketed all
their earnings in hard currency.
Using his earnings from the golden leaf, he has managed to take his children through top schools and sent two to top universities in the United States.
Grey hair sprouting in his head shows the wisdom of years as he found his feet in the industry, yet the quality of his simple clothing and skin tells a tale of a man favoured by fortune in his chosen trade.
Source - newsday
