‘Regulations stifle tobacco output’

By The NewsDay | Nov. 7, 2013 | 5 Min read

THE tobacco industry is hamstrung by levies and regulations that have a bearing on output, experts have warned.

By Tarisai Mandizha

The golden leaf has become the crop of choice for many farmers in the country with a number having dumped other cash crops for tobacco.

The challenges, according to farmers, have dire consequences on output and target projections for the coming season.

Preparations for the 2013/14 tobacco season have begun with most traditionally grain growing farmers now switching to the cash crop.

Despite favourable tobacco prices, industry players say the sector, currently outshining other agricultural subsectors, is faced with a myriad of problems.

Calls by farmers to decentralise tobacco auction floors for instance, remain one of the resolved issues in the sector.

Zimleaf Holdings chairperson Robbie Mupawose said the tobacco industry was heavily regulated and there was need to revisit some areas to tighten the regulations for the sector to perform.

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Mupawose said the distribution of inputs needs to be tightly controlled to avoid double-dipping while the grower’s registration needed to be tightly regulated to curb multiple registrations.

Mupawose said the rapid expansion like any business can often expose weakness in systems and the tobacco sector has not been spared this unfortunate trend.

“Efficient and orderly markets require considerable resources and perhaps the crop has run a little fast for the administration to keep up.

“Orderly marketing has been the backbone of the industry for decades and the stakeholders need to co-ordinate their efforts to streamline the entire supply chain.”

For Mupawose, the other challenge that required urgent attention was the issue of side-marketing.

“Tobacco representation needs to be improved as the incidents of nesting and mixing are beyond acceptable levels,” he said.

Issuance of licences needs to be controlled as only genuine operators or merchants should be dealing with the product and stop allowing a chaotic situation to prevail.

“The entire industry needs to take a deep breath, take stock of the situation and whip it back into line. The marketing arena is at times somewhat chaotic with all and sundry scrambling for the golden leaf,” Mupawose said.

Some of the rules, according to Mupawose, were not benefiting the majority.

He is of the view that some regulations and levies were not farmer friendly and the Environment Management Authority levies and permits were questionable. “The Zimbabwe National Water Authority and Catchment charges are problematic. A farmer builds a dam and they charge for saving water flowing to Mozambique and what services do they render?

“Adding salt to the injury the tax by Zimra how does a farmer honestly project quarterly tax payments- a cabbage farmer to project income on a product that could be wiped out by hail? Improvement and repairs and maintenance become value addictions, but minimal tax benefit,” Mupawose said.

He, however, said government should give farmers the 99-year leases to enable them to borrow against.

“It was impossible for a farmer to build a $400 000 tobacco curing tunnel or even a house on the farm with no guarantee that one’s children will inherit the property.

“Then farmers are expected to produce for national food security and cash crops that provide inputs to industry and economic growth for the country,” Mupawose said.

Zimbabwe Farmers’ Union Tobacco Association national chairperson Douglas Mhembere said despite the crop topping in foreign currency earnings, the sector continues to face many challenges.

Mhembere said the late distribution of inputs by contractors was a major cause for concern for the tobacco industry and this affects both the quality and quantity of yields.

“Farmers are not being given full input support. Farmers expect contractors to support them with cash to pay for labour and others,” Mhembere said.

Mhembere also said the prices for auction and contract floors were not uniform and this encourages side marketing.

“Uniform prices will discourage side marketing since farmers normally compare the prices,’ he said.

He, however, said government should put in place stiff penalties for unregistered buyers to curb side marketing urging the decentralisation of auction floors. Mhembere said that the insurance companies were not honouring farmer’s claims.

“Some insurance companies are not fulfilling their commitments in times of need,” he said

The Tobacco Industry and Marketing Board (TIMB) said the current challenges in the tobacco sector will not have much impact on the output and projections for tobacco in the coming season

In an interview with NewsDay, TIMB chief executive officer Andrew Matibiri said tobacco farmers associations had raised concerns on the state of the industry.

Matibiri said government was working towards the implementation of the new legislation that will protect both the farmer and the contactor.

“ . . . it was made clear that a regulatory framework was being drawn up and we trust that in due course the document draft will be made available to both farmers and contractors so that they can proffer their views and comments towards ensuring that the interests of both the farmer and the contractor are protected for mutual benefit,” Matibiri said.

He, however, said there was need for funding to insure that the growth of the tobacco sector is quickened.

“Like all sectors of agriculture, the biggest challenge is funding. Farmers need low interest long-term funding for capital development and low interest funding for seasonal requirements,” Matibiri said.

TIMB chairperson Monica Chinamasa said the tobacco industry needs to seriously look at approaches to environmental and sustainability issues to meet the requirements of certain market niches.

Chinamasa said the industry was so far sustainable in terms of the economic and societal values, but still falls short in terms of environmental values as manifested by severe deforestation caused by farmers in their search for fire wood for curing their tobacco.

“The quest for sustainability has resulted in the birth of new imperative for business characterised by the triple bottom line where businesses are obliged to take care of not only the higher profits imperatives, but people and the planet as well,” Chinamasa said.

She said the tobacco merchants had set up a Voluntary Sustainable Afforestation Association to spearhead the re-afforestation programmes and this would go a long way in complementing government efforts in addressing sustainability issues in tobacco production.

“The example set by tobacco farmers in succeeding against a myriad of challenges that include lack of capital, erratic electricity supplies, unpredictable weather patterns and costly inputs should motivate us to seek new ways of building stronger partnership among agriculture, manufacturing and trade,” she said.