Online Reporter
Edgar Vhera
Specialist Writer — Agribusiness
WITH Zimbabwe producing a record tobacco output of 351 million kilogrammes in the ongoing 2025 tobacco marketing season, smallholder farmers want crafting of policies that enable their participation in value addition for improved welfare.
Last week, Zimpapers hosted the 2025 Tobacco Conference, which was sponsored by CBZ Holdings, Tobacco Industry and Marketing Board, OneMoney, POSB, Hunyani, Clover Leaf Motors, TSL, Pacific Cigarette Company, and Pureigh Investments, among others.
And speaking at the conference that ran under the theme “Transforming Zimbabwe’s Tobacco Industry through Beneficiation and Value Addition,” farmers said they have little to celebrate for this record breaking milestone.
Zimbabwe Progressive Tobacco Farmers Association (ZPTFA) president, Mr Mutandwa Mutasa, gave a simplified tobacco value addition cycle, where a kilogramme of tobacco earns the grower between $0,10 and $5 on the local market.
“This price is before deducting the full cost of production, which includes overpriced inputs provided on credit and transport to the market.
“That same kilogramme, when processed, produces around 1 000 cigarette sticks which, in turn, retail for roughly $70,” he said.
Mr Mutasa said those involved in processing and marketing the final product pocket the remaining $65–67 per kilogramme or more.
“The critical question we ask is, ‘where is the grower’s fair share of this massive industry?’ It is on this basis that we are calling for our rightful stake in the tobacco value chain by presenting two key proposals,” he disclosed.
Under the first option, Mr Mutasa said growers must be enabled to organise and actively participate in the value addition and processing of their own crop, and on the second, there is a need to ensure that a certain percentage of the profits made at each stage of the value chain is set aside for the direct benefit of the growers.
It is under the first option that his association submitted a proposal, which was rejected by the Tobacco Industry and Marketing Board (TIMB) on the grounds that it encourages side marketing.
Currently, growers are effectively excluded from the tobacco value chain immediately after selling their crop at auctions or to contractors, despite the fact that substantial profits are realised beyond that point.
“We are proposing a model where five percent of the profits at each value addition node is shared with the grower.
“We can learn from the sugarcane industry, which has already adopted a similar approach, resulting in meaningful empowerment for its growers,” continued Mr Mutasa.
The ZPTFA boss said smallholder farmers may be empowered through allocation of export quotas, given priority access in government-to-government trade agreements, guarantees for establishing production facilities, access to production financing, participation in foreign market operations, and appointment of indigenous professionals to key leadership positions.
Mr Mutasa said that small-scale farmers, who contribute over 80 percent of national tobacco output, and indigenous companies be granted adequate representation on the TIMB board.
While many farmers are advocating for a change of the legislative and regulatory framework within the tobacco industry by reviewing both the Tobacco Industry and Marketing Board and Tobacco Research Act, Lands, Agriculture, Fisheries, Water and Rural Development Minister, Dr Anxious Masuka, thinks these are just embellishments.
“There is nothing that inhibits you from doing what you want to do. Tell us what you want to do and we will put a policy for that legally,” he challenged farmers at the same conference.
The minister acknowledged that there were some challenges under the tobacco contracting.
“In some arrangements, the contractor makes profits in three points: they borrow offshore and get the London Inter-Bank Offered Rate (LIBOR) plus 0,5 (that is borrowed at three percent), when it comes into Zimbabwe the maximum interest rate is 13–18 percent. So, they already make money on money,” he disclosed.
The contractors get discounts on volume purchases on inputs but do not pass on these to their growers.
At the point of sale, they determine the price by paying the difference between what they see in the market and the profit they want to make, he highlighted.
TIMB concurred that tobacco production has since shifted towards small-scale production since the advent of the land reform programme and the emergence of contract farming from 2005.
The trend is expected to continue, mainly driven by vertical growth in production with contract farming increasing from six contractors in 2004, to 16 in 2015, to 33 in 2023.
“Contract farming is now accounting for about 94 percent of production from 30 percent in 2004, and this trend is expected to continue going forward.
“As a result of indigenisation laws, indigenous players have entered the tobacco contracting space,” TIMB said.
