Contract farmers' marketing season preps

Buhle Nkomo

Contract growers are expected to start selling their tobacco on 16 March, a day after selling at the auction floors would have commenced.
 

The reason for the one day lag time is contracted growers use a price matrix generated at the auction floors.

Loosely described, the price matrix’s generates the average price per grade at the auction floor which in turn determines the lowest price a particular grade can be sold at on the contract selling points on the following day, the aim being to protect farmers.

Pricing of tobacco will be based on an agreed grade-price matrix using the TIMB classification system which prices should cover production costs and include a profit margin for the contract grower.

In the event that the agreed price in the contract is lower than the price paid for the same tobacco at the auction floors at the time, contractors use the price matrix. 

TIMB will provide arbitrators who will determine consistency of grades and the final position on any price offered or any defective bales disputes.

Contracted growers are supposed to deliver their tobacco to their specific contracting firms’ selling points.   

In some instances, their contractor may make transport arrangements to deliver the tobacco to the designated sales venue at which TIMB will be present to supervise the sale.Where applicable, the contractors may meet the additional costs associated with contract sales.

Contractors authorized to conduct sales for flue cured Virginia tobacco are Aqua Tobacco, Boost Africa, Chidziva, Curverid, Ethical Leaf, Gold Leaf, Intercontinental Leaf, Kratos, Mashonaland Tobacco, Maxlucky, Munakiri, Northern Tobacco, Pamuka , Premium Leaf Zimbabwe, Shasha Tobacco, Tian Ze and Zimbabwe Leaf Tobacco. 

The contractors IT systems are linked to the TIMB’s to ensure compliance with the booking procedures, stop order requirements, loan order requirements, loan clearance and sales data transmission to TIMB.

Tobacco sold at contract selling points is booked by the contractor on behalf of growers into the TIMB Booking and Delivery system prior to selling and sales are only to take place at venues approved by TIMB. 

The contractors and growers have online access to the TIMB booking system and they can alternatively can be informed through a phone call to TIMB or visiting TIMB office.

The onus to book all tobacco to be sold on any given day shall be on the contractor.

Contractors can only book growers based on an approved list of contracted growers submitted to TIMB by contractors.

As provided for in the booking system, growers’ numbers, number of bales, sales venue and date of sale should be captured.

Sales will not be allowed to proceed if the contractor’s IT system is not linked to the TIMB system and meets other requirements relating to stop orders and bookings.

Contractors are obliged to weigh, open and sample bales before sales in terms of the sales procedures laid out in the agreement between contractors and TIMB.

  

Tobacco laid for sale without a valid TIMB registration or booking will attract a fine payable by the contractors.

Any purchase or sale of contract tobacco outside the agreed framework will also attract a fine

As with auction sales, the contractor shall also provide manpower to open and sample tobacco bales. 

The contractor’s buyers will classify the tobacco based on the current TIMB grading system.

Contractors will also classify defective bales prior to pricing.

A sale shall be deemed complete once arbitration is conducted and the top copy of the sale ticket has been removed from the bale by Contractors’ staff for recording and payment processing purposes

Auction floors and contractors shall observe the requirements of the FARMERS Stop Order Act Chapter 18; 11 before paying the balance of the purchase price to the seller.

To facilitate this process, all stop orders will be lodged with the Tobacco Industry and Marketing Board, after proper registration with the authorities at least 48 hours before sale.

In conclusion, contracted growers are encouraged to desist from side marketing which is selling of the tobacco they produced under contract using relatives’ grower numbers or to companies other than the ones that funded the production of the tobacco. 

Side marketing is a cancer that will, if allowed, virtually destroy the industry.

For additional Information contact
TIMB on telephone numbers 08677004624/6 or 0772145166/9 or 0279-22082/21982 or 025-3439 or 067-24268/29246 or 0277-2700 or 064-7280 or 0271-6772 or Toll Free Numbers 08006003 / 0731999999 / 0712832804 or WhatsApp 0731999999 or E-mail: info@timb.co.zw