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Martin Kadzere
Zimbabwe is looking to more than double revenue from tobacco exports this coming season after setting up a facility to fund the crop using local money.
Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa told a post-Cabinet briefing on Tuesday that the US$60 million revolving fund set up by the Government would see net export benefits from tobacco increasing to 30 percent from 12,5 percent.
Mutsvangwa also outlined strategies the Government was adopting to boost agricultural output during the forthcoming summer season.
“The other strategies in the crops sector include the localisation of tobacco financing in order to optimise the net export benefits to 30 percent from the current 12.5,” percent, “ said Minister Mutsvangwa.
“The tobacco sector will be provided with seed money to the tune of US$60 million in order to establish a revolving fund for the local financing of tobacco to be a success.”
Modalities for disbursing the funds are being worked on, Reserve Bank of Zimbabwe governor Dr John Mangudya told Business Weekly in a telephone interview on Thursday.
“We have four stakeholders involved that are the TIMB (Tobacco Industry and Marketing Board), farmers, the banks and the Government and these will all be involved in coming up with the modalities,” said Dr Mangudya.
Tobacco, also known as the “green gold” is the country’s largest export commodity and second after gold. But the current funding model where offshore money finances about 95 percent of the crop has seen the country earning little in export revenue.
After shipments, most of the proceeds remain outside the country as they go towards repayment of debts.
Already, there have been growing calls across the country for Zimbabwe to revert to domestic funding of tobacco farming, as was the case about two decades ago to ensure viability of the farmers, the sustenance of the auction marketing system as well as maximising revenues.
The funding model also raised concerns over the potential demise of the auction system as industry players feared could see massive price manipulation in favour of contractors, which would frustrate tobacco farmers from growing this key commodity in the future.
On the forthcoming summer cropping season, Mutsvangwa said the strategic objective was to sustainably increase crop production and productivity to meet and surpass the national requirements for both human consumption and industrial use.
This would be achieved through the implementation of the Agriculture Recovery Plan anchored on timely provision of inputs such as fertilisers, seed, fuel and agrochemicals; consistent supply of power, fuel and water, access to finance for inputs and working capital, involving the private and financial services sectors and continuous support of the targeted farmers with irrigation and mechanisation services to improve efficiencies and climate proofing.
The strategy will result in more area being planted as evidenced by the proposed increase of the hectarage of maize, sorghum, pearl millet, finger millet; soya bean and tobacco.
The financing of the Summer Cropping and Livestock Programme will be through the public and private sector and development partners.
Government will finance the Presidential Crop and Livestock Input Schemes through Treasury and provide Government default guarantee for programmes funded through Agricultural Finance Corporation and CBZ.
The National Crop Production Plan for the 2021-2022 Season also includes proposals on Private Sector Led Programmes, categorised into Potato Value Chain Financing and Private sector Commodity Value Chain Financing or Contract Farming.
The Rural Presidential Horticulture Plan will also be launched during the season and will target priority fruit trees including passion fruit (Granadilla), pecan nuts, apple, guava, mango, lemon, avocado pears and macadamia.
Each targeted household will be given 10 trees of each fruit variety, depending on suitability of the fruit tree to the agro-ecological regions and potential income to be generated.
The first phase running to December 2021 has a target of 500 000 seedlings. In addition, a total of 35 000 gardens will be established, and each will be equipped with a solar borehole, cattle water trough and an ablution facility. Each garden will cater for a village, school or youth ward centre.
In the livestock sector, the strategic objective of the 2021-2022 Livestock Development Plan is to sustainably increase livestock production.
This will be achieved through implementation of programmes under the Livestock Recovery and Growth Plan such as climate-proofed livestock production involving the private and financial services sectors; access to forage and pastures; capacitating the livestock and veterinary extension and advisory service delivery system; and strengthening Government-wide coordination, monitoring and evaluation.
The Government will introduce a Presidential Rural Poultry Pass-on Scheme, which seeks to commercialise rural poultry production, thereby providing an affordable source of protein and increasing rural household incomes.
The Scheme intends to distribute rural poultry chicks to at least 1.8 million rural households over a period of five years.
Bongani Ndlovu