Zimbabwe: 2023 Tobacco Marketing Season – Let’s Not Create Room for Price Cartels

The 2023 tobacco marketing season started last Wednesday with the first bale fetching US$4,35 per kilogramme to eclipse last season’s US$4,20 per kg, which essentially hints at a season with high potential for better fortunes compared to its predecessor.

Expectations for a rewarding season are running high among stakeholders given that the Government has also revised the foreign currency retention percentage upwards from last season’s 75 percent to 85, which means farmers will take home more hard currency.

This is a development that should also make it easier for them to prepare for the next tobacco growing season given that most of their requirements are now sold in foreign currency.

The most encouraging reality is that the average price of US$2,56 fetched on the first day was for tobacco that is usually graded as low quality considering that it comprises primings and lowermost leaves that may not be free from dirt though at tolerable levels.

This means there are vast chances for the top quality leaves to fetch more earnings.

This season there were good rains, which is also a positive for farmers because their crop was not compromised by dry periods that have their biggest challenge in recent seasons.

Sadly, in the recent past, this has not worked in the farmers’ favour with price cartels setting in as early as the first week or so of the opening of the marketing season.

Contract floors have fared better in this regard with farmers producing the crop under contract walking away richer than their counterparts from the auction side.

Of course there have been cases of contractors short-changing farmers through various dubious means, but they have always offered better prices to cover their chicanery.

I hope the recent shake-up at the Tobacco Industry and Marketing Board (TIMB) may have sent the message home and brought in some bit of professionalism in the way the regulatory board conducts its business with both contractors and the farmer.

TIMB must act true to its vision of being ‘the icon of excellence in the production and marketing of Zimbabwe flavour tobacco’ and their mission statement of ‘timely mobilising and distributing requisite resources, developing and operating efficient orderly marketing and information systems, which satisfy the expectations of all stakeholders’ that they do not seem to be doing in recent times.

The impression they are creating is that they are there to foment chaos in an industry, which they are supposed to be regulating professionally.

The Government should ensure there is no period in the course of the season during which there will be laxity in monitoring how business will be going.

Already, there are reports of buyers prowling the Mashonaland West and Mashonaland Central provinces buying tobacco from farmers purporting to be helping them cut the costs of packaging and transporting to the floors.

Should this be investigated and found to be happening, the Government should ensure the law takes its course to the last letter to deter would-be copy-cats from doing the same.

These buyers have nothing resembling empathy for the farmers they claim to be rescuing from the potential dilemmas of failing to secure packaging material and transport easily because after buying the tobacco, they go on to grade and package it properly and sell it for a higher value.

This is daylight robbery.

The farmer would have toiled from seedbed establishment to the harvesting and readying the crop for the market, then the unscrupulous buyers come in and get the crop for a song.

On the one hand, the farmers are also to blame because in most cases some of them would have produced the crop under contract, which requires them to first settle their debts with the contractor before they can use their earnings for anything else.

Their contractual agreements also spell it out clearly that the contractors will be the buyers of the crop to enable them to deduct what they are owed first before letting the farmer use the rest of the earnings.

These unsanctioned tobacco sales going on in the communal areas will surely give birth to a lot of legal battles in the not-too-distant future, as the contractors will surely come down hard on farmers pushing to recover their money.

The other issue that needs to be urgently addressed in the tobacco sector is on value addition, which is happening at very negligible levels with 98 percent of the country’s tobacco being exported in semi-processed form, which indirectly amounts to exporting jobs to those countries that will later do the processing.

It also means that the true value of our tobacco is being realised elsewhere and benefiting those economies at the expense of Zimbabwe’s.

It is, however, refreshing to learn that the Government is now moving to reverse the situation with the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development reported to be in advanced discussions with both local and foreign investors for the country to start value addition of tobacco.

Last week, Vice President Constantino Chiwenga did not hide his disappointment over the country’s failure to export value added tobacco when he officially opened the tobacco marketing season.

VP Chiwenga said it was imperative to raise the levels of value addition from the current 2 percent to 30 percent by the year 2025.

His observations come at a time when the country is pushing to get all sectors of the economy working to productive levels, which will naturally create employment for many locals.

Millions of people in Zimbabwe get their livelihoods from tobacco farming.

On the brighter side, there are prospects of growth for the tobacco sector on the backdrop of an increased appetite to grow the crop on the part of farmers, thanks to the various efforts the Government is making to restore sanity in the industry.

This season there are projections of 230 million kilogrammes of the golden leaf being realised, up from the 212 million kilogrammes realised last year.

The increase in yields is attributed to the good rains that were received plus the increased hectarage resulting from the growing numbers of growers too.

At least 3 283 new growers were registered this season and if the marketing process is conducted smoothly with farmers getting decent earnings, there are chances of more new growers joining the bandwagon next season. This will make it possible for the country to increase tobacco production to 300 million kilogrammes and raise the level of value addition to 30 percent by the year 2025 up from the paltry 2 percent currently being recorded.

Tobacco is the country’s largest agricultural export earner and the second-largest commodity export earner after gold.


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