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Low auction prices force growers to make illegal shift to contract selling

| May 27, 2014

Some of Zimbabwe’s flue-cured tobacco growers are diverting their crops to contract floors so as to earn higher prices than those being offered over the auction floors, according to a story in the Zimbabwe Herald.

Officially, contract buyers purchase tobacco only from contracted growers, but some farmers not under contract are said to be using contracted growers’ registration numbers to sell their crops on the contract floors.

The Herald story said that most of the growers involved in this practice were aware that it was illegal, but said they had no choice since buyers were offering unattractive prices at the auction floors.

A Karoi farmer was quoted as saying that she had sold part of her crop over the auction floors but had been disheartened by the prices.

“Tobacco production is my mainstay,” she said.

“I have to go back to the fields, and with the prices being offered at auction floors, I will never be able to finance my crop. I am selling the remaining tobacco through the contract floors.”

The average price paid at the contract floors stands at $3.13 per kg, 20.8 percent higher than the average price at auction, $2.59 per kg.

Category: Breaking News

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