The Sunday Mail
Nelson Gahadza
Tobacco farmers have said most of the crop is ready for the 2023 tobacco marketing season that commences next month, but are hoping there won’t be logistical concerns at the floors, as well as payment delays.
According to the Tobacco Industry and Marketing Board (TIMB), the 2023 tobacco marketing season will start on March 8 with auction sales, while contract sales, which account for 95 percent of the crop, will begin a day later.
Tobacco is the country’s largest foreign currency earner after gold and, according to initial forecasts, output is expected to grow to 230 million kg, from 212 million kg produced last season.
Zimbabwe Tobacco Association (ZTA) chief executive Mr Rodney Ambrose said reaping, curing and grading of the crop is ongoing and there will be volumes ready for the market.
“It may be a slow start, but the volumes will increase each selling week,” he said.
He indicated that non-payment by any contractor should not occur this season and farmers should be paid within the TIMB regulations time frame.
“On the other end, side marketing needs not occur. Farmers must honour their contracts,” he said.
According to the Tobacco Producers Association of Zimbabwe, this year’s crop is expected to be of better quality, thanks to the good rains the country has received so far.
The bulk of tobacco is produced by small-scale indigenous farmers who were allocated land under the land reform programme which began at the turn of the millennium. At its peak, three years ago, Zimbabwe produced 257 million kg of tobacco and the Government intends to expand production to 300 million kg.
Mr Ambrose said there was improved quality and higher yields this season and as such, average prices should be firmer than last season.
“We hope to sufficiently cover record high production costs. The Reserve Bank of Zimbabwe (RBZ) USD retention of 85 percent is sincerely appreciated and will also assist in better returns,” he said.
Mr Ambrose said farmers are ensuring increased productivity by producing high-yield, quality tobacco, under sustainable production methods, in order to attract more international buyers who may wish to involve themselves in value addition.
The Government is looking at localising the funding of tobacco and beneficiation to maximise earnings because, under the current financing model, tobacco is largely funded by offshore money. The Government has announced several policies and incentives that are meant to build capacity in the selected crops and minerals, under its Vision 2030 agenda.
In the tobacco industry, under the Tobacco Value Chain Transformation Plan, the Government set a target of producing 300 million kg of tobacco by 2025 and the US$60 million tobacco funding facility is among the various initiatives aimed at driving the agenda.
According to TIMB, the implementation of the Tobacco Value Chain Transformation Plan is a work in progress to achieve a US$5 billion industry by 2025. The plan focuses on increasing primary production of the crop from 211 million kg (in 2021) to 300 million kg by 2025, localising financing for the 150 000 debt-ridden small-scale producers, value addition and beneficiation and export of cigarettes, instead of raw tobacco, targeting to create a US$5 billion industry by 2025.
Dr Shadreck Makombe, the president, of the Zimbabwe Commercial Farmers Union (ZCFU) said TIMB should flush out opportunists from their books and, at the same time, be responsible for their actions.
“We are ready and want our money from the produce. This year, the leaf is quite good and the output anticipated will be higher than that of last year. As a result, prices should be higher than last year,” he said.
He added that farmers should avoid side marketing and honour their contractual obligations and, at the same time, contractors should not exploit farmers.
“Farmers should be security-conscious and avoid travel at night.”
Dr Makombe said farmers are playing an active role towards the US$5 billion tobacco industry by 2025.
“That is why we are pushing farmers to focus more on value addition to ensure the benefits are reaped locally,” he said.
Tobacco is among the few crops and minerals that have been put at the centre of economic recovery efforts due to their ability to generate foreign currency.
Zimbabwe earned $650 million during the 2022 tobacco marketing season and the figure was up from $589 million in the prior season.
Mr Paul Zakariya, the Zimbabwe Farmers Union (ZFU) director, said issues to do with farmer payments are now clear from a policy point of view, with each 5 percent of the profits being paid in USD and 15 percent in the local currency.
“However, the major issue are payment delays to farmers. We know of some contractors that have not yet paid their growers for last season’s crop and this discourages farmers.
“There have been talks of collusion by merchants to push down the producer prices, hence TIMB should look into this and ensure they do not occur this season,” he said.
Mr Zakariya said, while farmers are ready, logistical issues in terms of bookings should also be sorted out. He said any price above US$5 per kg is viable for the farmer and does not expect prices to dip below US$2 per kg.
“Therefore, we anticipate the average prices to be around US$4 and US$4,50. We have a record crop of good quality, and farmers should be paid well,” Mr Zakariya said.
