Story by Gay Matambo
Sugarcane out-growers in Chiredzi have expressed concern over the payment model for their produce amid concern that the skewed process is threatening viability.
This comes as the farmers take to the field for the 2023 sugarcane cropping season.
Over the years, Tongaat Hulett, which owns Zimbabwe’s major sugar milling assets, used the Cane Purchase Agreement (CPA) system to pay the farmers for milling and processing.
Under the CPA, farmers delivered cane to the miller and were paid an agreed percentage of the estimated value of their cane with the balance being paid once the full value had been determined.
Tongaat Hulett has, however, introduced the Cane Management Agreement (CMA) where the farmers maintain ownership of the sugar until it is sold.
Sugarcane out-growers are therefore not happy saying the new model has a negative impact on their returns.
“We are hoping to go back to the milling agreement, which we used back then that is the cane purchase agreement. Those who want can stick with the Cane Management Agreement because we had challenges to even purchase inputs in 2022 because of that system,” noted a concerned farmer.
“When we were allocated these farms all was well because we were using the Cane Purchase Agreement but recently we signed up for the Cane Management Agreement and everything became sour for us. We are always in debt due to that mode of payment. We hope as well that the government will come in to assist so that we immediately return to the CPA system,” noted another farmer.
Another one weighed in saying, “I am a farmer at Hippo Valley Estates. Last year, we were not paid well and we were not able to purchase inputs. We realised that the mode of payment that Tongaat had introduced to us is not user-friendly to the out growers hence we are appealing for a better payment structure from the miller. We want them to bring back the Cane Purchase Agreement because after receiving payment upon selling cane, farmers would then be able to plan accordingly.”
“If the mode of payment is changed, maybe we will have a better season but so far the miller is charging us 23 per cent for milling which is a lot of money, taking into consideration that farmers go through a lot of expenses to grow the cane,” stated another farmer.
Tongaat Hulett Corporate and Industry Affairs executive, Dr Dahlia Garwe is confident that the issue will be resolved as negotiations with sugarcane out-growers on various issues affecting production are currently underway.
“What we probably want to understand from the outset is this, the farmers and ourselves have the same common aim,” he said.
“What is happening now is there was an arbitration process that was underway. This arbitration process is now complete and an award has been given. Our intention now is to implement what that award says.”
“Before we do that, we obviously have to have discussions with the farmers so that we can understand how we can help each other.”
“We have been approached by the farmers. They want a different payment system. Since the season has started, as Tongaat we need to look at the proposal and see whether it’s possible to implement it immediately,” he went on.
Tongaat Hulett owns 51 per cent of Hippo Valley Estates and has total ownership of Triangle Limited with the two companies being the major sugarcane growers and millers.