Mike Bimha dragged to court
Five sugarcane grower associations have hauled Minister of Industry and Commerce, Mike Bimha before the courts, along with producers of sugar in the Lowveld — Triangle Limited and Hippo Valley Estates — over a recently approved payment arrangement for the milling and processing of their crop.
The associations, namely the Commercial Sugarcane Farmers Association; the Zimbabwe Sugarcane Farmers Association; the Zimbabwe Sugarcane Development Association; Hippo Valley Productive Sugarcane Association and Mkwasine Sugarcane Farmers Association, want the Masvingo High Court to compel Bimha to set aside the current ratio used to calculate how much they are paid upon processing their crop at Triangle and Hippo.
Otherwise referred to as the division of proceeds ratio (DOP), sugarcane farmers are currently entitled to 77 percent of the proceeds from their crop after it has been crushed into sugar while the millers get 23 percent.
The DOP ratio is used to share proceeds from the sale of sugar between farmers and millers after crushing of the farmer’s cane into sugar.
It determines the charge for milling of farmers’ sugarcane by the miller.
Sugarcane farmers are paid by the two millers on the basis of the DOP.
Farmers feel the ratio should be adjusted in their favour saying, as currently constituted, though still in their favour, it will cripple their operations.
The background to this is that sometime in 2014, the sugarcane farmers approached Bimha, who is cited as the first respondent, and complained that the 73,5 percent to 26,5 percent DOP rate that had been set in 1999 was no longer feasible and asked for a review.
This prompted the Minister to intervene by issuing a directive in terms of Section 10 of the Sugar Production Control Act and set an interim DOP ratio of 82,65 percent to 17,35 percent in favour of the farmers.
The interim DOP ratio was to subsist pending a review of the DOP ratio by independent consultants, EY.
The court papers show that after EY was engaged by both the farmers and the millers, Triangle and Hippo who are cited as the second and third respondents respectively, to review the DOP ratio, the two parties agreed that:
1) They would respect and abide by the consultant’s findings. 2) In the event that the DOP ratio differed from the interim one, the party to whom compensation is due would be provided with prompt and automatic compensation.
The review process was done and completed in June last year and the DOP ratio was pegged at 77 percent to 23 percent in favour of the farmers, raising the ratio by about four percentage points on the 1999 ratio.
The farmers have, however, since rejected the new rate and highlighted that the EY report had several shortcomings.
The farmers want a High Court order that would compel Bimha to set aside EY’s DOP ratio, as it “would cause irreparable harm to their farming operations and mark the end of sugarcane farming by indigenous farmers, thus reversing the gains of the land reform programme”.
The farmers also argue that they would be forced into debt and be financially crippled by the new DOP ratio.
The respondents have, however, dismissed the application by the farmers as flawed because it does not raise grounds for a new review of the DOP ratio.
The matter was supposed to be heard before Justice Joseph Mafusire last February, but has since been postponed after the sugarcane farmers asked for the judge to recuse himself from the matter.
The reasons for the recusal notice could not be established, but Justice Garainesu Mawadze, will now preside over the matter.
A date for the hearing before Justice Mawadze has not been announced. Financial Gazette