Zimbabwe News and Internet Radio

Govt to intervene in Tongaat stand-off

By George Maponga

Government has pledged to bring a lasting solution to the stand-off between 1 000 sugar cane farmers in the Lowveld and sugar producer Tongaat Hulett over the contentious issue of Division of Proceeds (DOP) in cane milling.

Mike Bimha

DOP is a scientific ratio that is used to share proceeds from sugar cane milling between out-grower farmers and the miller.

Outgrower farmers at Hippo Valley, Triangle and Mkwasine estates, who are beneficiaries of the land reform programme are unhappy with the upward review of the DOP ratio, which saw Tongaat’s share of the proceeds rising from about 17 percent to 23 percent.

The farmers’ share was reduced to 77 percent from about 82 percent, a situation most of them say was threatening to push them out of business.

Tongaat has also proceeded to backdate DOP over-payment deductions from farmers in a bid to recover over $14 million, which it contends it overpaid farmers from 2014 to last year.

This move has further hit farmers in their pockets setting the stage for a bruising stand-off between Tongaat and farmers.

Last week, farmers gave Tongaat an ultimatum to halt the over-payment deductions and reimburse them money collected since last year, but the sugar producer has dug in its heels.

Industry, Commerce and Enterprise Development minister Dr Mike Bimha yesterday said Government wanted finality on the DOP stand-off.

He promised to convene a meeting with the two feuding parties soon to resolve the stand-off.

“The issue is that Government has always been doing something to make sure that both the farmers and Tongaat are viable. We will sit down with both parties (Tongaat and farmers) as soon as next week because we want to solve the issue,” he said.

“The issue of DOP is under discussion and let me say a meeting is on the cards because my Ministry (Industry and Commerce) has got the power to set the DOP, but I think we need to engage and we could have met the parties already had it not been that my diary was full as I was out of the country.”

Minister Bimha also said the DOP stand-off could have been solved by now had the cane farmers not taken the matter to court.

Cane farmers dragged both Tongaat and the Minister of Industry and Commerce to court seeking an order to stop the DOP over-payment deductions, but the matter was ruled not urgent prompting farmers to withdraw their case and pursue dialogue.

Dr Bimha said Government wanted to completely empower cane farmers by making sure that in the long term they run their own sugar mill and reduce over-reliance on Tongaat.

The Lowveld sugar producer currently enjoys monopoly in the sugar milling industry a situation analysts said was not healthy.

“DOP is only one out of many issues that we need to look at to make sure our farmers are rich and empowered business-people under the new dispensation in the country.

“We need to look at other issues such as boosting yields for farmers and look for investors who can set up a sugar mill to reduce this over-reliance on Tongaat for milling,” he said.

Dr Bimha said there was an agreement when an interim DOP ratio was set in 2014 that whoever was prejudiced between Tongaat and the farmers would be compensated hence the move by Tongaat to effect over-payment deductions.

However, farmers say Tongaat should not effect the DOP over-payment deductions based on a report by a consultancy, which Government and sugar industry players conceded was fundamentally flawed.

Commercial Sugar Cane Farmers Association of Zimbabwe chair Captain Admore Hwarare (Retired) said Tongaat was ripping off cane farmers who were not being paid for cane by-products such as ethanol and elec- tricity.

Captain Hwarare (Rtd) said Government was supposed to speedily intervene and rescue farmers.

Chiredzi West Member of Parliament Cde Darlington Chiwa said the DOP stand-off needed to be quickly resolved adding that Tongaat was short-changing farmers taking advantage of its monopoly in sugar cane milling.

“Tongaat is short-changing farmers using a skewed DOP ratio that is unfair considering that unlike before farmers are financing their own cane haulage to the mills and are buying fertilisers from Tongaat at commercial rates.

“Cane farmers should also be paid incentives for forex receipts that come from sugar exports, but they are getting nothing,” he said.

Cde Chiwa said Government should investigate the circumstances under which Tongaat proceeded to recover $14 million which the sugar producer claimed to have overpaid farmers between 2014 and 2016 saying the money was too much and would collapse most farmers.

Tongaat managing director Mr Sydney Mtsambiwa recently indicated that there was nothing wrong in his firm recovering DOP over-payments made to farmers arguing that there was an agreement between Tongaat and farmers that the prejudiced part was supposed to get “prompt compensation”. The Herald