daniel chigunwe
Edgar Vhera
Agriculture Specialist Writer
TOBACCO farmers are optimistic the next tobacco season will have better prices, thanks to the Tobacco Industry and Marketing Board’s (TIMB) decision to tackle misinvoicing by unscrupulous service providers who distort prices of commodities and deprive farmers of the chance to get viable prices for their produce.
Trade misinvoicing is the manipulation of price, quantity or quality of a good or service on an invoice to shift capital illegitimately across borders while transfer pricing as an accounting practice represents the price that one division in a company charges another for goods and services provided.
TIMB public affairs officer Mrs Chelesani Tsarwe said the board had put in place strategies to tackle the issues of misinvoicing and transfer pricing that were negatively impacting the tobacco industry.
“Among the strategies is the establishment of compliance administrative framework (CAF) and the setting up of a new compliance administration department. The CAF is there to ensure all contracting companies fund farmers with inputs that are within the approved cost ranges as guided by the prevailing input costs as set by the Ministry of Industry and Commerce. Before contracting commences, all interested companies submit their commitment documents, which show their capacity to contract for the season and include proof of funding, unit cost of inputs to be given to farmer and the interest component to be charged,” said Mrs Tsarwe.
Mrs Tsarwe said the TIMB compliance and licensing committee will then vet the commitment documents, which are rejected if found to be in violation of the board’s compliance standards and will not get approval to contract farmers.
Only those who have passed TIMB’s vetting process will be get the greenlight to contract farmers, leaving no room for growers to be shortchanged through transfer pricing, misinvoicing among other issues, she said.
Tobacco Farmers Union Trust (TFUT) president Mr Victor Mariranyika said this was a positive measure towards transparency and accountability.
“In the past, the majority of our growers have been short-changed by contractors through under-funding, supply of in adequate inputs, over-pricing inputs, late delivery of inputs, issuing vouchers without cost of inputs, not signing contractual documents upon input receipt and merchants buying the crop at prices below production cost,” TFUT president said.
Zimbabwe Tobacco Growers Association (ZTGA) chairman Mr George Seremwe echoed the same sentiments, saying this was a positive development for which TIMB should be applauded.
“We applaud TIMB for being firm, as some merchants, in connivance with their surrogates, were charging whatever they wanted and deducting a lot of money through the stop order system. The measures by TIMB will bring order and sanity in the industry and hopefully reduce production costs,” Mr Seremwe said.
He added that there was need for serious enforcement of these measures with those found on the wrong side of the law facing serious consequences.
Zimbabwe Commercial Farmers Union (ZCFU) president Dr Shadreck Makombe concurred, saying this was long overdue as TIMB had identified the problem and prescribed the solution. He, however, said the implementation of the decision should not just be an event but a process that would ensure that 300 million kilogrammes of the crop were sustainably produced by 2025.
Online Reporter