eBusiness Weekly
Business Writer
The ongoing dispute over the division of proceeds (DoP) between sugarcane farmers in the Lowveld and Zimbabwe’s Tongaat Hullet operations, Hippo Valley and Triangle Limited has now been referred to the Government for determination.
DoP is a mechanism used to share the proceeds from raw sugar between millers and farmers.
Under the arrangement, 77 percent of the proceeds go to the farmers and the remainder to the miller, which mainly covers milling costs. Cane farmers are arguing its revenue portion is little given the high costs of producing sugarcane and want it raised to 85 percent.
Earlier, farmers had opted for voluntary arbitration, which also included issues on how growers could benefit from the by-products and value-added products such as ethanol.
However, Tongaat, who does milling objected to the move of taking the DoP dispute to arbitration, resulting in the matter being referred to the Industry and Commerce Ministry.
“We are now waiting for a determination from the Ministry after Tongaat rejected the arbitration (process),” Hippo Valley Sugarcane Farmers Association secretary general Patrick Muvhingi said in an interview Tuesday.
The Ministry has been asked to comment but had not done so by the time of publishing this article.
The sugar industry is one of the largest formal employers in Zimbabwe with a total labor force of between 25 000 to 27 000 employees mainly in the country’s Lowveld.
Prior to the land reform, which started at the turn of the millennium, Tongaat, which owns mills in Triangle and Hippo owned 75 percent of all the land under sugarcane.
Changes in land ownership saw a major transition as plantations under Tongaat declined to 56 percent while out-growers took control of the remaining 44 percent.
Zimbabwe exports sugar to a number of countries within the SADC and COMESA blocs as well as North America.
The country is also looking to penetrate the potentially lucrative markets in the Great Lakes region comprising Rwanda and Burundi.
