Surrogate Contractors Dupe Tobacco Farmers US$20 Million At Auction Floors
Tobacco farmers are reportedly set to lose US$20 million to surrogate contractors who are fleecing them through duplicating off-takers work at auction floors.
Several unions representing tobacco farmers say they want the surrogate contractors ejected from the auction floors for short-changing farmers.
Surrogate contractors are merchants that play the role of middlemen but are allegedly abusing that privilege by duplicating the role of tobacco off-takers that sponsor them.
The contractors do not allow the farmers to put their tobacco under the auction system and that has seen farmers selling their product at very cheap prices compared to those on the auction floors.
Resultantly, farmers are losing out on potential earnings as the surrogate contractors unilaterally determine prices while undermining the auction system.
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The Sunday Mail understands that there are more than 20 surrogate contractors operating at the tobacco auction floors in Harare. The merchants, previously known as Class B Buyers, have resurfaced, albeit under a new name.
Explaining how the surrogate farmers are fleecing farmers, Tobacco Association of Zimbabwe president, Mr George Seremwe, said:
_They are eating into the farmers’ pockets because what they are doing is only for a commission._
_If you calculate just this season alone, they are being paid around US$20 million and the money is coming from the farmers. I’m sure you are aware this is not the first time we are calling for the same to be stopped because around 2010 they were in this industry as pin-hooking or Class B buyers and we are seeing the same by another name._
Mr Seremwe said TAZ suspected that there were underhand dealings taking place since they engaged and agreed with TIMB that the surrogate contracors be barred from coming back .
Zimbabwe Progressive Tobacco Farmers’ Association president, Mr Mutandwa Mutasa, implored the Tobacco Industry Marketing Board (TIMB) to do away with the unscrupulous contractors.
Tobacco farmers told The Sunday Mail that they did not receive any input from the surrogate contractors who were now withholding their money.
TIMB Public Relations Officer Ms Chelesani Moyo last week said they were investigating the issue.
More: Pindula News; The Sunday Mail
