Mashonaland Tobacco Company (MTC) is facing closure after Parliament yesterday heard the firm was illegally operating since it had not been licenced by the Agriculture ministry, reports Newstoday on its website.
The Parliamentary Portfolio Committee on Lands, Agriculture and Rural Resettlement challenged MTC managing director Kenneth Langley to provide written evidence that they were properly registered and had signed a Memorandum of Understanding (MoU) with the ministry, but Langley failed to produce it.
Langley said they had been given the green light by the Tobacco Industry Marketing Board to operate as a contractor and buy tobacco straight from farmers, a move tobacco auction floors described as “killing the industry”.
The hearing came after four auction floors – Tobacco Sales Floor, Boka Tobacco Floors, Millennium Tobacco Floors and Premier Tobacco Floors – complained that MTC bought tobacco from non-contracted farmers in Karoi and Rusape, saying this has caused a drastic decline in tobacco deliveries to the licensed floors.
The auction floors' representative Boka Tobacco Floor chief executive Rudo Boka said the licensing of four auction floors and 13 contractors has led to the decline in tobacco volumes forcing auction floors to downsize operations as early as mid May. The auction floors had reduced staff by 50 per cent by 11 May, she said.
According to documents availed to the committee, when MTC started buying tobacco from farmers in Karoi and Rusape, they received support from Zanu PF Makoni District, Affirmative Action Group Hurungwe Chapter, Hurungwe District Administrator, Karoi Town Council, Rusape Town Council and the Makoni District Administrator.
Boka said allowing tobacco sales by several players was promoting disorderliness and short comings. "Merchants must concentrate on their core businesses to contract, buy and process tobacco. […] Merchants should use the auction floor price matrix to determine the price for contracted tobacco." she said.
MTC has a smallholder grower base of 1,700 in Rusape, 1,800 in Karoi and approximately 3,200 in Harare catchment areas. (pi)