HARARE (AFP) — Zimbabwean farmers tore up their tobacco crop in protest on the auction floors of Harare on Wednesday as state price controls to combat hyperinflation threatened to wipe out their profits.
"The price is useless, I would rather keep my tobacco and sell to buyers from Malawi or Zambia," muttered Ottilia Mavhunga, a farmer from Karoi, a town in northern Zimbabwe, as she prepared to take her bales of tobacco away.
The tobacco trading season -- once a key feature of Zimbabwe's business calendar -- had to be called off for the second time in as many weeks after farmers pulled out of the sale, citing low prices given by auctioneers.
Some farmers tore up their bales and flicked tobacco leaves across the floor as other ripped off tags placed on their bales by the auctioneers that showed prices as low as one dollar (0.64 euros) per kilogramme (2.2 pounds).
Production of tobacco, once Zimbabwe's top foreign exchange crop, declined from a record high of 236,130 tonnes in 2000, the year controversial land reforms were launched, to just 68,800 tonnes last year.
Only around 80 bales went under the hammer on the auction floors -- among the largest in Africa -- before the auction had to be cancelled on Wednesday.
Berison Mutemeri, a farmer from Banket, northwest of Harare, said the price offered by the government was disappointing.
"How can maize fetch much higher than tobacco? It costs two billion Zimbabwe dollars to transport a single bale and we get this," he said. A bale weighs on average between 60 and 80 kilogrammes.
The state offered farmers 70 million Zimbabwe dollars per kilogramme, or around one US dollar under an exchange rate that is a tiny fraction of the black market rate in a country where inflation is at 165,000 percent.
Agriculture Minister Sylvester Nguni told tobacco farmers at the auction that the price was fair.
"It is my conviction that this level of support will adequately reward the farmer for both effort and quality and make him or her go back to the land."
Authorities have kept the official exchange rate at 30,000 Zimbabwe dollars for one US dollar since September last year but on the thriving black market one US dollar can be exchanged for around 100 million Zimbabwe dollars.
The 70 million dollar rate offered to tobacco farmers was a compromise.
Buyers at the Tobacco Sales Floor in Harare said farmers should not despair over the opening prices as rates were expected to improve during the sale.
Around 400 farmers waited as officials from government, buyers and farmers' representatives met to try to resolve the price dispute.
Two smaller auction floors in Harare later opened, state television said.
Central Bank governor Gideon Gono was expected to make an announcement later on Wednesday about monetary policy that could address farmers concerns, officials told AFP on the auction floors.
David Mupamhadzi, chief economist at the Zimbabwe Allied Banking Group, said the government should let market forces determine the prices.
"There is a need to move away from this multiple exchange rate. Prices should be market-determined, all these problems we have in the economy are as a result of controls," Mupamhadzi said.
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