FARMERS in Zimbabwe could easily lose interest in onion and apple growing due to continued influx of smuggled produce mainly from neighbouring South Africa.
Onions are seasonal in Zimbabwe hence during certain times, they have to be imported but the bulk is smuggled in.
However, industry players say no import permits are being issued and hence smuggling was rampant thereby prejudging government and local formal players.
South African fruit and vegetable official exports to Zimbabwe are worth at least $1 million a month, according to trade figures.
Godwin Mushori, a representative of the Fresh Produce Marketers Association of Zimbabwe (FPMAZ) told stakeholders early January that onion and apples from South Africa are depriving the fiscus of millions of dollars worth of potential tax revenue.
According to Mushori, most formal businesses in the fresh produce sector were struggling to stay afloat due to serious viability challenges.
“Currently, the manner in which production, importation and marketing of fresh produce, particularly apples and onions, is creating an uneven playing field and prejudicing the fiscus,” Mushori is quoted as having briefed various stakeholders.
A 25 percent surtax on onions and apples has been introduced with the aim protecting the local industry, Mushori said.
“The 25% surtax has resulted in loss of revenue to central government because the informal traders do not pay taxes, as they transact on a cash basis.
He added, “The 25% surtax motivates traders to take the risk of smuggling with an estimated 32 000 tonnes of apples coming through the border at a value of about $35,2 million. The government is being prejudiced of 25% of this value.”
Mushori said while registered companies pay the full 25 percent of the invoice value and meet other statutory obligations, informal traders do not pay the surtax and other obligations.
According to Mushori ‘almost’ all onions currently in the market are imports smuggled from South Africa.
About 1 700 tonnes of onion are estimated to be consumed per month.
Local farmers are appealing for protection from Government through tightening border controls to curb smuggling.
Smuggled produce are relatively cheap in the market.
“It’s disheartening to invest in farming only for some people with connections at the border post (Beitbridge) to easily smuggle onions.” said Peter Mloyi, a small scale farmer in Mguza, Matabeleland North region.
“My fear is that in the long run, we will have few farmers cultivating onions. We are slowly being pushed out of onion growing by smugglers.”
According to Mloyi, farmer organisations must aggressively engage government to curb smuggling.
Zimbabwe has been an importer of products such as onions, tomatoes, potatoes and others despite having the resources to produce locally.
In 2016, the Southern African country spent more than $80-million on fruit and vegetables imports, according to national statistics agency Zimstat.