adminLOCAL authorities in Manicaland are mulling levying tobacco contractors operating under their jurisdiction to enable them to effectively mitigate complex side-effects of the trade on their road networks and forests.
Contract farming is often touted as a viable funding and marketing solution for farmers who are unable to secure bank financing and enter the marketplace on their own.
Apart from complementing Government and banking sector financing initiatives, contract farming also enables contractors to influence the production process by, for instance, providing yield-boosting inputs.
However, rural district councils argue that tobacco contractors were creaming super profits, leaving them with an insurmountable burden of repairing roads badly damaged by an influx of huge vehicles and tillage machinery.
The contractors are not remitting any levies, leaving the local authorities having their fingers burnt in the game as they grapple with the burden of repairing the roads.
Local authorities argue that their roads are often in a sorry state from the onset to the peak of the tobacco season.
Makoni Rural District Council is tightening the screws on the operations of the tobacco contractors by imposing an annual development levy of US$5 000 per tobacco growing sponsor.
Mutare and Mutasa rural district councils are also following suit on tobacco financing companies operating in their areas.
Some of the top contractors operating in the district include Mashonaland Tobacco Company, Northern Tobacco, Boast Africa, Chidziva, Zimbabwe Leaf Tobacco Company, British American Tobacco and Savanna Tobacco.
Makoni RDC chief executive officer Mr Edward Pise revealed that his council has passed a resolution making it compulsory for any tobacco contractor operating in the district to comply or ship out.
“We are responsible for providing quality services to our farmers and we have discovered that our road network is being injured as a result of operations of these companies yet they are paying us nothing.
“These contractors are dispatching huge volumes of tractors, haulage trucks delivering coal, firewood and inputs as well as carrying flue-cured tobacco to the auction floors. Our roads suffer immensely at the peak of the tobacco season and all we are saying is that they should channel a share of the profits towards the repair of the roads,” said Mr Pise.
Northern Tobacco has warmed to the Makoni RDC directive by assisting council with diesel, while the other contractors remain mum over it.
“They have been supplying us with diesel, but the other contractors are yet to comply. This is a serious issue and we will soon be dragging some of these contractors to court. There is no way they can fail to pay US$5 000 per year.
They cannot maximise profits without throwing back part of those profits to the community,” added Mr Pise.
Mutare RDC CEO Mr Shepard Chinaka said they were looking at ways to legislate the issue.
“We are seized with the issue because they are causing a lot of damage,” he said.
TIMB chief executive officer Dr Andrew Matibiri said there was need for the engagement of all parties involved to arrive at a win-win solution.
“The two parties need to communicate, engage each other, so that they can solve such issues amicably. They should be open and not ambush each other. Out of the 106 469 tobacco growers, 18 841 are from Manicaland and what this means is that there is need to synchronise the approach with what is happening in other provinces, otherwise Manicaland might be prejudiced should the contractors opt to pull out. It should not be a one-sided issue, it requires balance,” said Dr Matibiri.
The president of the Zimbabwe Local Government Association (ZILGA), an umbrella body all rural councils, Mr David Guy Mutasa, said all councils were asking for was a shared responsibility.
“These contractors are working with people in areas where there are roads that councils must rehabilitate regularly during the tobacco season. They dispatch high volumes of tractors, haulage trucks with inputs, coal and firewood using our roads and all we are asking is a small share of their profits so that we can effectively mitigate the side-effects of their operations.
“They require smooth drive to visit their growers and we must meet half-way. It is not about taking money from them, but a shared responsibility. Our roads are being injured by their big machineries,” said Mr Mutasa.
The local authorities are threatening radical measures compelling tobacco farmers to have exotic woodlots amid revelations that the cutting of trees for tobacco curing continues to be a major driver of deforestation and worsening extreme weather in the country as efforts to persuade farmers to adopt a paradigm shift is proving an uphill battle.
While contract farming was one of the options available for tobacco farmers that has helped alleviate funding challenges and propped the growth of the industry, its link to deforestation has been evident leaving local authorities facing a mammoth task to reverse it.
“We have advised them to give their growers some gum seeds, but as a stop gap, to supply their growers with coal. However, not all farmers are using that coal for curing purposes. The contractors must ensure that their growers have converted their curing facilities to rocket barns that can use coal without fans.
“The farmers must be compliant because next season we will lobby for the suspension of all gold leaf that was cured using firewood,” emphasised Mr Mutasa.
Evidently, the contract farming model is still confronted by many challenges, the biggest of which are probably lack of an all-encompassing legal framework and side-marketing.
Given their lack of bargaining power and limited access to legal services, farmers are known to sign lop-sided contracts without a proper understanding of the risks and benefits of contract farming.
Typically, farmers also complain about the prices offered by contractors, which they argue are too low to enable them to outgrow contract farming and become self-sustainable.
Delays in disbursement of inputs affect yields, they also argue.
It would appear that the key to unravelling the contract farming tangle is to institute a legal framework that clearly articulates the needs of both farmers and contractors.
Experts also argue that the power dynamics in contract farming agreements must be evened out and information asymmetry eliminated in order to do away with agreements that are inherently risky for farmers.
Online Reporter