Tobacco marketing season opens…as government pushes for fair game

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Tobacco

BY FIDELITY MHLANGA
ZIMBABWE’S 2022 tobacco marketing season kicked off yesterday with government ordering merchants to play a fair game.

The marketing season kicked off with farmers crying foul over low prices.

The first bale traded for US$4,20 per kg, which was lower than US$4,30 per kg offered last year.

The opening price was US$4 in 2020, US$4,50 in 2019 and US$4,90 in 2018.

“With a more stable macro-economic environment this selling season, and no fixed exchange rate, growers should clearly get better value for their effort,” Lands, Agriculture, Fisheries, Water and Rural Development minister Anxious Masuka said as he marked the opening of the selling season.

“Government now urges merchants to do their part by paying fair prices for this tobacco. The tobacco  industry regulator, TIMB (Tobacco Industry and Marketing Board), through various initiatives should continue to guide the industry towards viable and sustainable tobacco production,” Masuka said.

Ahead of the selling season, government moved to ameliorate farmers’ problems by reviewing the foreign currency retention threshold.

Reserve Bank of Zimbabwe governor John Mangudya increased the retention threshold to 75% from 60% last year.

This means farmers will earn 75% of their earnings in foreign currency, with 25% being paid in Zimbabwe dollars, converted at the prevailing official exchange rate.

Masuka acknowledged that farmers operated in a challenging environment, characterised by an erratic rainfall pattern.

Heavy rains in January caused water-logging and leaching.

Although a higher irrigated crop was grown, planting of the late dry-land crop had to be extended into January.

This affected yields and the expected national output.

“Farmers look forward to getting a decent return for their effort. Contractors look forward to recovering their loans in full and making a decent profit. Banks, too, are holding their breath, looking forward to the full repayment of loans advanced in good faith to many value chain financiers. Our merchants, local and abroad, wait to see the quality of the crop and consummate deals to ensure that the entire run of the crop has a market,” Masuka said.

“As the minister responsible for this subsector, my gaze, and mind, are fixed on the entire value chain — on fairness, on ethics and probity, on transparency, on accountability, on discipline, on equity and on sustainability.  Such is the thrill, anxiety, and business that this golden leaf brings to the industry and the entire country,” Masuka added.

He said stakeholders should act to eliminate the manipulation of farmers by contractors.

“Reports of higher prices at contract sales compared to auction sales for similar grade and reports of collusion by merchants and manoeuvres by middlemen to rehandle tobacco bought cheaply from farmers should be a thing of the past. I am recommending the TIMB Inspectorate Unit to continue to work with other security agencies to eliminate these vices. Discipline must return to this important industry. Contractors should provide the prescribed minimum support package for both smallholder and commercial farmers and farmers must repay this support through delivery of the crop to contractors while avoiding side-marketing,” Masuka added.

TIMB deputy chairperson Nomsa Dube said for this marketing season, they had 110 155 hectares of tobacco planted  by 122 841 growers. Around 600 growers registered for the first time.

The board has licensed three auction floors for the 2022 marketing season which are Tobacco Sales Floor, Boka Tobacco Floors and Premier Tobacco Auction floor.

There are 35 licensed A class buyers and 33 contracting companies.

The board has approved decentralised contract sales in Karoi, Mvurwi, Bindura, Marondera and Rusape.

Of the 211 million kg sold in the 2021 marketing season, 133 million kg were produced by small-scale farmers.

Dube said while concerns had been raised over growers viability due to high costs of production pushed by an increase in input costs, authorities had put in place alternative sources of funding to improve viability of tobacco
growers.

“The industry together with the Reserve Bank of Zimbabwe have jointly put in place improved payment measures to ensure that tobacco growers get full  value of their crop and are simultaneously paid within the shortest possible time,” Dube said.

She said through the tobacco value chain transformation, focus is on addressing local funding, regulatory framework as well as value addition and beneficiation in order to position tobacco farming as a US$5 billion industry by December 2025.

TIMB chief executive Meanwell Gudu said since the outbreak of COVID-19 pandemic in March 2020, the industry had made huge strides in containing the virus by implementing stringent preventive measures at all tobacco selling points.

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