admin
The 2022 tobacco auction marketing season officially closed on July 20, with mop up sales now being held every Wednesday. Contract sales continue, as volumes of the crop coming are still high. Our Acting Features Editor Elita Chikwati (EC) had an interview with the Tobacco Industry and Marketing Board (TIMB) chief executive Mr Meanwell Gudu (MG) on this year’s season and other related issues.
***
EC: How best can you describe the 2022 tobacco marketing season?
MG: The 2022 tobacco marketing season progressed fairly well with the relaxation of Covid-19 regulations. The season had its fair share of challenges, but we managed to pull through. Zimbabwean flavour tobacco was in high demand and average prices offered were firmer this season. As of day 80, US$3,04 per kilogramme was paid as compared to $2,78/kg average price paid during the same period in 2021.
EC: Will the country still attain the targeted volume of 250 million kilogrammes for the 2022 seasons?
MG: The 2021/22 season was characterised by late onset of rains, with most areas receiving effective rains around end of November to early December 2021. That was followed by a dry spell which stretched up to end of December. Then incessant and excessive rains in January caused water logging, nutrient leaching, and disrupted weeding and other agronomic operations. That adversely affected the quantity and quality of tobacco produced by some growers this season. We may fall short of reaching the set target this season.
EC: What do you think were some of the positive achievements that were made in the 2022 marketing season?
MG: One of the major milestones this season was that through the Ministry of Agriculture, Lands, Water, Fisheries and Rural Development, the Tobacco Industry and Marketing (Prohibition of Side Marketing) Regulations, 2022 (SI 77 of 2022) was gazetted. The SI which specifically focuses on tobacco side marketing when used in conjunction with administrative penalties, went a long way in curbing side marketing of tobacco.
EC: How many companies and individuals were fined for side marketing?
MG: To date 411 individuals and 16 companies were convicted and fined for engaging in side marketing. TIMB also de-activated 438 grower numbers for suspicious trade. As TIMB works towards encouraging best practices with strict adherence to the law, the board requires all stakeholders in the industry to adhere to set regulations as non-compliance will be rewarded with stiff penalties.
EC: The highest price for the auction floors was US$4,99 per kilogramme compared to the contract floors which was at US$6,80 per kilogramme. What causes this price cap at the auction floors? What are your thoughts on this?
MG: There is a positive relationship between prices and quality. Contracted tobacco is generally better funded and is likely to throw better quality styles.
EC: What challenges did the industry face this season? How best can these problems be addressed ahead of the next season?
MG: At the onset of the 2021/2022 marketing season, there was no legislation which focused specifically on side marketing, and this posed as a major hurdle in tackling the issue. With the gazetting of the SI 77 of 2022 specific to tobacco side marketing, the TIMB inspectorate department was able to bring to book growers and companies found undertaking side marketing. Repeated offenders were made to pay administrative penalties to TIMB, and this went a long way in discouraging repeated offenders and also to deter would be offenders.
EC: A number of contractors were suspended during the 2022 tobacco marketing season for several reasons. What is the total number of contractors that were suspended? What will happen to them?
MG: A total of 11 companies were suspended, but eight of the suspensions were lifted and three tobacco companies were stopped from operating this season upon repetition of similar offences. Lifting of suspensions depended on the nature of the offence committed.
EC: There are allegations that TIMB has been licensing unscrupulous contractors who did not meet the requirements. What is your comment on this? What are you doing to end this problem?
MG: In issuing out licenses for contractors, TIMB undertakes due diligence and will continue to do so to ensure we retain order in the industry.
EC: The bulk of the tobacco is being produced under contract system. What do you think should be done by auction floor operators for them to remain viable?
MG: About 96 percent of the tobacco growers this year opted for contract farming because they lacked funding, hence, they have to sell to contract floors. The remaining 4 percent are the free growers who sell to auction floors.
There are plans to keep the auction system running, this entails ensuring farmers have access to more funds. Government is offering that support through the Agriculture Finance Corporation (AFC) to capacitate the farmers. An increase in free growers automatically increases the viability of auction tobacco sales.
EC: The Government availed a $60 million facility to help fund tobacco production. What became of the facility and how many farmers have since benefited from the fund?
MG: The disbursement of the US$60 million revolving fund facility by the Reserve Bank of Zimbabwe is still to be rolled out. This fund can support 50 000 hectares with the potential of producing 60 million kilogrammes of tobacco as we move towards achieving the 2025 goal of producing 300 million kilogrammes of tobacco by 2025.
EC: Tobacco production has come under attack from environmentalists with regards to deforestation as they use wood for curing. What are you doing about this as an industry?
MG: TIMB seeks to enforce additional minimum standards for sustainable tobacco production for both merchants and tobacco growers. For example, the establishment of woodlots, adoption of fuel-efficient technologies, use of renewable sources of energy and eliminating child labour. TIMB is also working towards reviewing the existing legal framework to enforce sustainable tobacco production.
EC: Looking ahead, how do you see the future of the tobacco industry in Zimbabwe?
MG: The future of the tobacco industry lies in improving the viability of growers, ensuring 100 percent compliance to regulations and ensuring that the industry has 100 percent compliance to sustainable tobacco production and good agricultural labour practice. We aim to create a US$5 billion tobacco industry by 2025.
EC: Thank you.
MG: You are most welcome.
Online Reporter