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Agriculture Reporter
Indigenous tobacco contractors have called for Government support to enable them to export the crop and also do value addition to boost their earnings.
This came out recently when the Parliamentary Portfolio Committee on Lands, Agriculture, Water and Rural Resettlement chaired by Gokwe Nembudziya legislator Justice Mayor Wadyajena, toured Ethical Leaf Tobacco.
Ethical Leaf Tobacco is one of the indigenous contract companies that is supporting production of the crop through inputs and technical advice. Ethical Leaf Tobacco chief executive Mr David Machingaidze told members of the committee that it was difficult for indigenous players to establish external markets for tobacco.
“At this stage, it has been difficult to export tobacco,” he said. “To export tobacco one needs extensive markets and extensive global networks.
“Ninety-eight percent of our tobacco is exported and only two percent is used for manufacturing cigarettes. We only have 10-12 of the 31 companies exporting and these are the big multi-nationals. The other challenge is that even if we find the markets, funding is not easily accessible.
“There is need for substantial amount of money required to export tobacco. Our banks require title deeds and for tobacco transactions you need millions of US dollars. Indigenous players need to be supported by Government in the form of guarantees either at RBZ level or Ministry of Finance and Economic Development. Without that support, it will become difficult for us to graduate from being farmers to be exporters of tobacco.”
Mr Machingaidze said there was need to increase the level of support to farmers to boost yields and also invest in irrigation to remove the risk of drought. If farmers are well supported, there will be no incentive for side marketing.
“We should be in a position to allow a farmer to benefit from the crop he produces the same way that was done to cotton during the past years,” said Mr Machingaidze. “It can be done to tobacco and it will boost production.”
Mr Machingaidze, who was asked to explain why they were operating from the Tobacco Sales Floor, said they were renting space because the floors had the facilities required by their off taker Premium Leaf Tobacco.
“We rent the premises, trolleys and labour at TSF,” he said. “Our duty as Ethical Leaf Tobacco is to contract farmers to produce the crop and we assist them with inputs and technical advice, we also help them to transport the crop to the floors.
“We are taking the risk. We get a loan from Premium Leaf Tobacco, we contract farmers and supervise the production of tobacco and if the crop fails we take the risk.”
Mr Machingaidze said even if the sales tickets were in the name of TSF, the name of the buyer, and Ethical Tobacco leaf were also indicated. ELT group general manager, Mr Andrew Mupfawa bemoaned side marketing.
“Fly by night players are giving us challenges after investing so much money,” he said. “These offer unrealistically attractive prices to attract our growers whom we will have financed. We do not buy tobacco from self-funded farmers. We only buy tobacco from our contracted growers. If we buy from other farmers within we are exposing our farmers to side marketing,” he said.
Cde Wadyajena said ELT will soon be called to appear before the committee in Parliament so they can give their evidence under oath.
Online Reporter