Zimbabwe News and Internet Radio

Tongaat in forex storm

By George Maponga

Lowveld sugar producer Tongaat Hulett Zimbabwe is in the eye of a storm after it used sugar cane export proceeds for more than 1 000 indigenous farmers in Chiredzi without their permission.

Tongaat Hulett
Tongaat Hulett

The firm was reportedly paid US$52 million in January for sucrose exports by the Zimbabwe Sugar Sales (ZSS), which markets and receives payment for all the sugar sold on the local and international market.

Tongaat was supposed to work out ways of paying outgrower farmers their share from the exported sugar but went on to use all the money without even consulting them.

Farmers only received payment for sugar sold on the local market with Tongaat reportedly insisting that it used the hard currency to import fertilisers for the industry.

Commercial Sugarcane Farmers’ Association of Zimbabwe chair Admore Hwarare accused Tongaat of trying to wreck farming operations of indigenous farmers in a bid to discredit the land reform programme.

He said farmers deserved to benefit from their sweat saying it was shocking that Tongaat had the temerity to secretly receive payment for cane exports and use the proceeds without even consulting the producers of the sugar it exported.

“We met Tongaat directors over payment of our forex for sugar exports and they admitted to having used the money to import fertilisers,” he said.

“But the burning question is how they could use farmers’ money without consultation. Farmers pay for the inputs they receive from Tongaat and there are even some farmers who do not get the inputs.”

Hwarare said Tongaat’s actions smacked of sabotage to discredit the land reform programme.

He said for too long outgrowers were being shortchanged by Tongaat which continues to enjoy monopoly in the sugar industry.

“There are many issues affecting farmers in the Lowveld which include archaic legislation for the entire industry with some of the laws having been enacted as way back as 1964,” he said.

“Tongaat is shortchanging farmers through high milling charges and exorbitant costs of inputs because farmers have no alternative to take their crop, we can safely say farmers have been working for Tongaat.”

The CSFAZ boss said they would this week engage the firm’s acting chief executive, Mr Aiden Mhere, over the forex issue.

Mr Mhere could not be reached for comment.

He said they will also petition the Minister of State for Masvingo Provincial Affairs Ezra Chadzamira to intervene and make sure farmers were paid their dues.

Several associations representing cane farmers will also engage the Reserve Bank of Zimbabwe Governor Dr John Mangudya to establish why cane farmers were not entitled to export proceeds from their crop yet other farmers were receiving their share.

Farmers have also been at loggerheads with Tongaat over lack of a cane purchase agreement which allows them to benefit from sugar cane by products such as electricity, ethanol and cattle feed.

Tongaat is paying farmers for sucrose only and has been dragging its feet to make the operating ground level.

This has left most farmers on the verge of collapse as they are struggling to make ends meet in the capital-intensive sugar cane farming sector. The Herald

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