Zimbabwe farmers urge devaluation

Tobacco is a central part of the Zimbabwean economy

By Craig Swan in Harare

Tobacco farmers in Zimbabwe have again called on the government to devalue the currency.

The annual tobacco auctions have just begun but many farmers are reluctant to sell their crop at current foreign exchange levels.

The government has so far ruled out any devaluation.

Tobacco sales make up about 30% of Zimbabwe's foreign currency earnings, and their troubled economy needs the foreign currency tobacco sales produce to pay for the import of fuel, raw materials and other commodities.

The current tobacco crop is forecast to be down on last years but farmers are saying the quality of the crop is excellent.

That should mean good prices on the auction floors.

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However industry executives expect many farmers to stay away.

Zimbabwe's economic hardships hit all

Growers are holding out for a devaluation of the Zimbabwean dollar.

Last year many tobacco farmers were hurt financially when they sold their crop before the Ministry of Finance sanctioned the devaluation.

Then the government accused white commercial tobacco growers of trying to sabotage the economy.

However this year small scale and communal farmers are also talking of withholding their crops but unlike the bigger commercial growers communal farmers are likely to be forced to sell sooner to pay off loans and school fees.

Zimbabwe has been critically short of hard currency over the last two years as the country has slipped deeper into economic crisis.

However some economists say while a devaluation would help the tobacco farmers, in the short term it could also worsen the situation for many ordinary Zimbabweans who would see prices rise while the value of their money falls.