- TIMB suspense Voedsale from contracting farmers
- TIMB take on the responsibility of making sure farmers contracted by Voedsale are paid
The biggest tobacco contracting company, Voedsale, has been thrown out of the farmer contracting industry by the regulator (TIMB) for its long overdue payments to farmers. The tobacco industry marketing board (TIMB) has banned Voedsale from contracting farmers this season after failing to settle its financial obligations with farmers.
Voedsale has been contracting farmers with inputs so that farmers sell their yield to the company and pay the cost of the inputs used and get the remainder as income. The inefficiency of the company has financially affected the involved stakeholders. The tobacco insurance sector was adversely affected as premium collection could not be efficiently carried out as the company took a long time to remit the funds which coerced insurers to process claims out of their own pocket.
TIMB has taken the mandate to make sure all the farmers owed are settled. “The board is working towards resolving the issue to ensure that all outstanding payments are disbursed. All growers who completed sales but have not received full payment are advised to call TIMB for assistance,” said TIMB.
Due to the market’s competitive advantage for the contracting company, many farmers were trapped in this liability zone and the confidence and the desire of farmers to produce more were eventually going to be affected. According to TIMB, the 2022/2023 season growers’ registration has been affected due to the hanging 2021/2022 balances. “However, we are aware that some tobacco growers have not yet been paid for tobacco sold during the 2021/ 2022 marketing season and this has affected timeous preparations for the 2022/ 2023 season”, TIMB added.
The tobacco sales for the 2022 tobacco marketing season were 212,7 million kilogrammes, a 2.1% jump from the comparative period in 2021. TIMB said it was partnering with its parent ministry of Land, Agriculture, Fisheries, Water and Rural development towards achieving a US$5 billion industry by 2025. Arguably the step taken towards Voedsale is necessary to realize the objectives set.
