… farmers complain over ‘exploitative’ cane grading process
CHIREDZI –
Out-grower farmers under the Zimbabwe Sugarcane Growers Collective (ZSGC) recently
petitioned Tongaat Hulett Zimbabwe (THZ) complaining over what they consider to
be an exploitative working relationship between them.
The
farmers allege that THZ is failing to take reasonable measures to preserve,
protect and promote the dignity and viability of the sugarcane growers.
The
farmers signed a milling agreement with Tongaat Hulett Zimbabwe for the
processing of sugarcane into raw sugar.
[read related story here https://tellzim.com/2019/10/tongaat-hulett-fights-zimra-over-vat.html ]
Through
the arrangement, farmers pay a milling fee to THZ under the Division of
Proceeds (DoP) ratio of 87:23 percent.
ZSGC,
however, feels there are now several new factors that must be considered in
light of a changed environment characterised by higher production costs.
The
petition was delivered by Bernadette Chipembere and signed by Anatholia Mukwe
and Kutsirai Mufari as witnesses.
It
bears an eight-point query involving Value Added Tax (Vat), exorbitant costs of
inputs, erratic delivery or distribution and allocation of inputs, unreliable
grading process, disparity of local mill door price, disclosure of Zimbabwe
Sugar Sales (ZSS) cost structures as well as consultation with sugarcane
growers and poor governance systems.
“We
are the sugarcane growers of Zimbabwe gathered herein under the banner of the
Zimbabwe Sugarcane Growers Collective in our capacity as petitioners concerned
however about the deteriorating relationship between THZ and the sugarcane
growers largely due to THZ’s failure to take reasonable measures to preserve,
protect and promote the dignity and viability of the sugarcane growers,” reads
part of the petition.
On
July 2019, the Zimbabwe Revenue Authority (ZIMRA) issued a directive that 15
percent VAT must be charged on the miller’s 23 percent DoP share of cane
revenue but THZ sought relief in the courts.
“On
the 5th of July 2019, the THZ Finance Director confirmed to all
sugarcane growers by a way of letter that the Zimbabwe Revenue Authority had
issued a directive to the effect that the 15% was applicable on DoP share of
cane revenue regardless of the nature of the cane supply agreement.
“It
is common cause that THZ has now sought legal relief to object to the ZIMRA
directive , and has in the same instance arbitrarily taken an untenable
antagonistic position to levy the 15% VAT on top of the milling agreement,”
reads the petition.
The
petition also underlined alleged disparities in the grading process where
farmers are not technically involved.
“All
sugarcane growers are not involved in the grading process, and the miller
produces a handwritten paper as the weigh bill. Given the glaring governance
issues flagged by the PwC audit report, [and] in a bid to protect the sugarcane
grower from potential manipulation, we demand that the weigh bill and ERC must
be computer-generated and that the Sugarcane grower must be given a pre-emptive
option to witness the weighing process,” reads the petition.
One
sugarcane farmer and businessman, Saul Chin’anga said he hoped the petition
will be treated with urgency it deserved by the Managing Director Aiden Mhere.
“This
matter is beyond all these new guys and the 13 retired executives from Tongaat
Hulett. The matter sits with Mhere so the recent appointments will not make any
difference,” said Chin’anga.
