The annual auction of tobacco began Tuesday in Zimbabwe and black small-scale farmers are protesting the prices they received for their crop. The farmers are paid in Zimbabwe dollars at the official exchange rate, but they want to be paid in United States dollars.
Tobacco provides more than one-third of Zimbabwe's foreign currency and an injection of U.S. dollars has never been needed more. There is no foreign currency available at Zimbabwe's Reserve Bank. The beginning of the annual tobacco auctions are usually a moment of celebration, as foreign buyers pour U.S. dollars into the central bank. This year it was all gloom and doom.
The volume of tobacco on sale this year, probably about 168 million kgs., is down by more than 15 percent. Analysts say this decline, the second in two seasons, was caused by the often-violent invasions of white-owned land, where 90 percent of the annual tobacco crop is grown.
Farmers representatives say disruptions to commercial agriculture, which have escalated since the presidential election in March, mean only 10 percent of growers will plant tobacco for next year's auctions.
Foreign buyers say this will be too small to keep Zimbabwe in the world market, and will cause the collapse of Zimbabwe's massive tobacco trade and bankrupt many industries linked to tobacco.
The financial plight of all tobacco growers, both large and small scale, has emerged as never before at this year's auction. The growers say prices offered at the beginning of auction season - about $2.00 (US) per kilo - were fair, but they say they are in danger of going bankrupt because of, among other things, the high price they have to pay for imported farm supplies.
During the growing season, the cost of fertilizer and chemicals, most of which are imported, increased by more than 100 percent, as the value of the Zimbabwe dollar slumped.