The Sunday News
Mhlupheki Dube
THE mismatch between exchange rates of the various forms of money used in the country has resulted in serious distortions on the markets. I am not an economist and therefore way out of depth in this territory.
However, my lay deduction is that there is a stampede in the monetary market with those people who have been fuelling the parallel market trying to beat the 15 October deadline given to banks to make certain adjustments by the monetary authorities.
Put simply it is those with huge deposits of electronic monetary whose sources are dubious and are running scared trying to clean their loot through buying the American dollar at whatever price.
The objective of this article is not to dwell on monetary issues insofar as the causative factors but to discuss the implications to the smallholder livestock farmer and provide wise counsel in that regard. Previously livestock farmers have been used by movers of illicit money to clean the money and half the time farmers are left holding useless currency.
This happened during the years of runaway hyperinflation when illegal money dealers and those who kept large sums of cash would rush to the rural areas after pronouncement about changes in the law by Government.
Naturally this information would not get to some rural areas in time and the cash dealers would prey on the unsuspecting livestock farmers deep in the rural areas, buying cattle and paying handsomely large amounts which would technically become useless in just a few days.
Many livestock farmers lost their animals through such callous acts of cash dealers.
I am therefore convinced that history is about to repeat itself. Sooner than later we will begin to see cash dealers going into the rural areas to clean their money which is under threat from the policy changes that were announced last week.
They will get to these areas and prey on the appetite for cash by smallholder livestock farmers and even crop farmers for that matter. Suddenly livestock farmers will have a multitude of buyers who are willing to pay top dollars for their animals and paying it in cash.
I interact with a lot of smallholder livestock farmers everyday and they all have an insatiable appetite for cash despite other forms of payment which are on offer.
Admittedly other payment platforms are not applicable in some areas due to lack of mobile network coverage, however, farmers even in those areas where mobile network services are available and payments can be made through such platforms, they still show bias towards cash sales.
It is this appetite for cash which will seriously predispose them to being cheated by cash dealers who are desperately trying to clean their illicitly gotten money.
My counsel to smallholder livestock farmers is to be wary of buyers who suddenly throng your area paying premium price for your cattle and in cash.
This could be too good to be true and hence it could do you a lot of good as a livestock farmer to check with your relatives who are closer to information sources on what is transpiring in the market. Otherwise you may sell your six oxen only to realise that someone was actually dumping money which he/ she can no longer use and you cannot use the money either.
Livestock is a huge asset and farmers are advised not to lose their investment simply by the lure of cash.
Kindly cross check on the transaction before you lose your animals. This may not be through cash only. There are people who are trying to move large sums of electronic money to beat the deadline of separation of accounts within the banking system and these may also come and offer ridiculously high prices for your livestock and pay you through transfers.
Again you may be left to deal with whatever happens to the fate of this artificial money and I have no doubt that the end will be unpleasant for you!
Uyabonga umntakamaKhumalo.
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