Andrew
Business Reporter
IN light of the rolling power cuts, large-scale tobacco farmers with irrigated crop have applied for duty exemption on fuel to power generators in a bid to cut curing costs.
About 20 000 hectares of tobacco were put under irrigation and curing has begun – a critical stage in tobacco production.
This has come at a time when Zimbabwe is facing the worst power shortages in more than five years after the Zambezi River Authority, which manages Lake Kariba, ordered ZESA Holdings to stop production at the country’s largest electricity plant due to low water levels.
Zimbabwe shares Lake Kariba with Zambia, which also generates power from the north bank.
The Government has since moved in to close the gap by improving power generation at the Hwange Thermal Plant and boosting coal production to feed small stations.
In an interview with The Sunday Mail Business, Tobacco Industry and Marketing Board (TIMB) chairman Mr Patrick Devenish described the situation as “very serious and needs attention”.
He said farmers were using generators “non-stop” to prevent tobacco from rotting.
“The cost of running the generators is absolutely unbelievable and farmers risk incurring huge losses that may see merchants cutting back on funding,” said Mr Devenish.
“Government is aware of the situation and our parent ministry (of Lands, Agriculture, Fisheries, Water and Rural Development) has been very helpful and supportive.
“We are just hoping for a positive response from the Government as soon as possible. We are hoping that tobacco farmers will be exempted from paying duty on fuel until the power situation improves or until they finish curing,” he added.
Energy and Power Development Minister Cde Zhemu Soda confirmed the application had been made through the Lands, Agriculture, Fisheries, Water and Rural Development Ministry.
Foreign currency earner
Calls seeking a comment from Lands, Agriculture, Fisheries, Water and Rural Development Minister Dr Anxious Masuka were not answered. But his Permanent Secretary Dr John Basera said he had not yet been apprised of the matter.
“However, it is a brilliant idea that we will definitely support,” said Dr Basera in an interview on Thursday.
Tobacco is the country’s largest foreign currency earner after gold. The final sale of tobacco for the 2022 marketing season was October 21, and a total of 212,7 million kgs of tobacco had been sold at a value of US$650,3 million.
This was an increase compared to 211,1 kgs sold during the same period in 2021.
According to the Zimbabwe Tobacco Association (ZTA), a lobby group that represents large commercial farmers, power supplies to the farms were averaging seven hours a day.
About 70 percent is required to be generated on-farm through diesel-powered generators, said Mr Rodney Ambrose, chief executive of ZTA.
For effective curing and handling of the crop, 24 hours of continuous power is needed.
Mr Ambrose said there is immediate need for tobacco farmers to access concessionary-priced diesel fuel for generator use either through their contractor or a Government facility.
Mr Ambrose said the cost of production per hectare is at a record high and the power requirements on farms would increase costs further to a point where “our tobacco is no longer competitive and the farmers’ viability is severely compromised”.
“Further to this, not all areas have received good rains and there is an increasing requirement to start supplementary irrigation of the early dryland crop,” said Mr Ambrose.
“Again, this requires a stable power supply from the utility, which is not present. From January onwards, curing processes increase and there will be further demand for consistent power, and close to 50 percent of the national crop could be exposed.”
Minister Soda told our sister publication, Business Weekly, on Thursday that ZESA Holdings would request a State bailout to help the country boost imports and also ramp up production at thermal plants.
He said the country was looking at increasing imports by an additional 200MW from regional utilities while efforts were being made to boost output at Hwange and switch on idle small thermal plants.
The commissioning of unit 7 at the Hwange plant, which has the capacity to generate 300MW, is underway, with commercial production expected to begin at the end of this month, according to official time lines.
Online Reporter