The Reserve Bank of Zimbabwe (RBZ) has increased the foreign currency retention threshold for cotton farmers to 85 per cent for
The Reserve Bank of Zimbabwe (RBZ) has increased the foreign currency retention threshold for cotton farmers to 85 per cent for the 2023 cotton marketing season.
Previously, cotton farmers were retaining 75 per cent of their foreign currency earnings. The other 25 per cent was being sold to the central bank at the auction rate.
The RBZ advised the Agricultural Marketing Authority (AMA) of the new development. It said:
Following the Monetary Policy Statement issued on February 2, 2023, we write to inform you that with effect from the 2023 season, cotton growers shall be paid 85 percent of their sales in foreign currency.
The remaining balance of 15 per cent shall be paid to the grower in local currency through bank transfers at the prevailing interbank market rate.
Considering this measure, cotton merchants shall draw down from offshore and sell 15 per cent of their proceeds to RBZ at the prevailing interbank rate.
The foreign currency payment to cotton farmers shall be net of foreign currency loans accessed for the purpose of financing seed cotton production.
AMA chief executive Clever Isaya welcomed the development, saying the onus is now on farmers to do their part.
According to a Sunday Mail report, the new producer prices for cotton are US46c for grade A, US43c for grade B, US41c for grade C and US40c/kg for grade D.
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