The Government dismissed claims by sugarcane millers that it lacks the power to set the revenue-sharing ratio between farmers and millers, reported <a href="https://www.herald.co.zw/govt-sticks-to-guns-on-sugar-pricing-mandate/">The Herald</a>.
Industry and Commerce Minister Mangaliso Ndlovu asserted that he is mandated to administer the Sugar Production Control Act, which includes setting sugarcane prices and regulating sugar manufacturing and delivery.
Tongaat Hulett owns 100% of Triangle and 51% of Hippo Valley Estates.
The new Division of Proceeds (DoP) favours farmers with an 80.5:19.5 per cent ratio, up from the 77:23 ratio recommended by Ernst &amp; Young (EY) in 2016.
Farmers sought validation of the new DoP, while millers wanted a review.
Baker Tilly conducted an interim validation and recommended the new DoP after EY declined due to a conflict of interest, having become the millers’ auditors in 2021.
Millers argue that Minister Ndlovu lacks the authority to set such ratios unilaterally and that the validation process was flawed and resulted in an unfair recommendation.
Said Minister Ndlovu:
<blockquote>
The DoP validation exercise w
as well-founded, regular, reasonable and just.
My actions were intra vires. As the Minister of Industry and Commerce, I acted within the scope of my authority in determining the Division of Proceeds.
Section 10 of the Sugar Production Control Act [Chapter 18:19] empowers me to set the price paid to farmers for delivered sugarcane…
Claiming that the ministry favoured one party (the farmers) is unfounded, as validation was essential before proceeding with the review.
The review will be conducted in due course as the MoU between the parties indicated that the review was to take place within a period leading up to March 31, 2025, and will be implemented on April 1, 2025.
</blockquote>
Millers claimed they weren’t given a chance to provide detailed submissions for validation but Minister Ndlovu argued that the same submissions initially given to EY were used by Baker Tilly.
EY declined to conduct the validation due to a conflict of interest.
The technical working group, including milling companies, decided no new information should be introduced for the validation process.
Both farmers and millers had to submit the same data they had previously provided to EY.
Farmers resubmitted their information in March 2024, unchanged from October 2023, except for a later cover letter date.
Ndlovu deposed that millers and farmers have a long history of disputes over various issues, often turning to the ministry for mediation when they are unable to reach an agreement.
These ongoing conflicts arise from the competing interests of both parties, who frequently view decisions that do not favour them as unjust.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Pindula News

The government says it has the power to decide how to share money between sugarcane farmers and millers. The new sharing ratio gives more money to farmers. The minister in charge, Mangaliso Ndlovu, believes he can make this decision. A company called Tongaat Hulett owns some of the sugar farms. The millers say they were not given a fair chance to share their opinions. The argument is ongoing between the farmers and the millers. A new review will happen in 2025.

Government Stands Firm On Sugar Pricing Mandate

The Small and Medium Millers of Zimbabwe (SMMZ), an organisation comprising 71 different small-scale millers, has pledged to work with authorities to deal with members selling underweight mealie-meal on the market.
Addressing journalists in Bulawayo on Thursday, SMMZ chairperson Davis Mohambi, said a multi-sectoral approach is required to deal with this practice. He said (via NewsDay):
<blockquote>
We were contacted by members on the issue of underweighting maize meal which has emerged in the market. We realised that it’s an issue that requires multi-sectoral players to come together.
This is why we went to our parent ministry and had this caucus to mark the beginning of the journey to deal with the issue.
Competition is welcome and is good for creating a sustainable sector and the economy. But we have got certain people, whether they do it knowingly or unknowingly, who under weigh a product.
To put into perspective, if mealie-meal costs US$5 and you pack 9kgs and go into the market with that perceived 10kg and sell it at $4,50.
That 50c makes a huge difference in terms of sales and gives an unfair advantage to other players who are partaking in this problem.
</blockquote>
Mohambi said they will engage retailers to help address the challenge given they are the gateway to the market. He said:
<blockquote>
We realised that it is not specifically for the millers. So we shall be required to come together as an industry to understand what is happening to come up with a resolution to the problem.
There has to be self-regulation among industry players. The retailers are also key in this, so we shall be engaging them going forward so that they play a role which is required by the law because they are the gateway to the market.
</blockquote>
Last month, the Ministry of Industry and Commerce warned businesses that are allegedly selling underweight products and not properly labelled that they will be prosecuted.
The Trade Measures Act governs trade practices, including product weights and measurements. It prohibits deceptive practices such as selling products that do not meet labelling requirements or using illegal measuring equipment.
The Consumer Protection Act safeguards consumers’ rights and interests. Selling underweight goods is illegal under this act, as it deprives customers of their rightful amounts and reduces their value for money.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Millers Pledge To Deal With Suppliers Of Underweight Mealie Meal

The shortage of mealie meal in large retail outlets such as supermarkets has been blamed on millers who are allegedly diverting the product to the streets and pavements where it is being sold strictly in foreign currency.
There is a shortage of mealie meal in major retail shops but the product is readily available on the informal market where consumers are being forced to buy using forex.
Grain Millers Association of Zimbabwe (GMAZ) chairman, Tafadzwa Musarara, requested to have questions from State media in writing but was yet to respond.
The Small-Scale Millers Association of Zimbabwe (SMAZ)  president, Davis Muhambi, told <a href="https://www.herald.co.zw/mealie-meal-diverted-to-black-market/">The Herald</a> that it was possible that millers have cut off the supply chain. Said Muhambi:
<blockquote>
I don’t want to be speculative but there is a great possibility that millers have cut off the supply chain.
The availability of mealie-meal and maize needs to be investigated thoroughly.
Millers could possibly be holding the commodity as they may deem that it is no longer sustainable to supply the commodity in RTGs as compared to US dollars.
There are a lot of technicalities involved, which may require them to keep afloat, as well as to make profits from their business.
</blockquote>
He urged the Government to urgently investigate the issue and ensure that sanity prevails.
Confederation of Zimbabwe Retailers president, Denford Mutashu, said:
<blockquote>
Government should urgently look into this matter. In fact, it should step up and consider the recommendations that we made to them to arrest such a scenario.
Millers may and are possibly cutting off the supply due to the prevailing black-market rates.
Mealie-meal must be prioritised as an urgent matter as it will fuel an upsurge of other commodities.
Most commodities are readily available on the parallel market and in backyard kiosks where they are being sold at prices up to three times the official rate.
A 10 kg bag of maize meal sells for about US$6 as compared to the official price of the RTGs, which is between $15 000 and $20 000.
</blockquote>
This week the Zimbabwe dollar fell by nearly $700 to average $2 577 against the United States (US) dollar on the foreign currency auction held by the Reserve Bank of Zimbabwe (RBZ).
On the parallel market, the greenback is reportedly changing hands at about Us$1:ZWL$3 500.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

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