Andrew
Golden Sibanda
THE Tobacco Industry and Marketing Board (TIMB) will this year take tough measures against side marketing of the contracted tobacco crop, an industry executive said.
This comes against the backdrop that side marketing of the contracted tobacco crop prejudiced investors millions of US dollars over the last half decade.
Currently, TIMB database shows that financiers are owed a cumulative US$100 million, which has not been recovered from growers sponsored to grow the crop.
TIMB chief executive Meanwell Gudu said in an interview that side marketing of a contracted crop was a big and widespread problem in Zimbabwe, which is threatening sustainability of its production.
Mr Gudu said the major reasons for this practice included mere reluctance to repay loans, but also incapacity caused by under-production due to weather issues.
But other accounts say struggling and impoverished people avoid repaying debt due to past experiences, which left them, after selling their crop, only with huge debts — after all proceeds went to pay off debts.
“Side marketing is very prevalent in the industry; our investors are losing money because of side marketing. Farmers would side market for various reasons.
“Sometimes they (farmers) would have under-produced because of various factors or sometimes they are just deliberately avoiding to repay the loans,” Mr Gudu said.
Tobacco is Zimbabwe’s second largest single export earner and the largest agricultural export, accounting for over 50 percent of export receipts in the sector.
The crop generates millions annually, raking in about US$782 million from exports in the 2020 farming season, according to the annual statistical report by the TIMB.
Mr Gudu said last year TIMB established an inspectorate team that assesses and investigates suspected cases of side marketing, which will see culprits brought to book.
“We now have an inspectorate unit within TIMB, which investigates all issues of side-marketing. One thing we are going to do is expand that unit. Last year, during its first year of operation, it was very effective.
“There is now a need for us to have more inspectors who will be investigating these issues of side marketing,” he said, adding TIMB was “also reviewing the legal framework to be able to prosecute.”
The tobacco industry regulator said it was pushing for legislative reforms to come up with more punitive penalties for culprits, which it hopes will stem out the practice.
TIMB is currently empowered to act on side marketing through the Tobacco Industry Marketing Act and the Farmer Stop Order Act, which prohibit side marketing contracted crops.
“But we also want, probably, other regulations because what we have found out; the shortcomings of the current legal framework, is that the penalties are not very severe enough.
“We are looking at making them quite prohibitive and very severe,”
Mr Gudu said. “In our TIMB system, we have more than US$100 million that is still outstanding; that is still to be recovered by all contractors.
“Part of (the reason) is side marketing, part of it is under production because of weather and all that…this is over a period…over four to five years,” Mr Gudu added.
Zimbabwe Commercial Farmers Union president Paul Zakaria said part of the reason was that some beneficiary farmers simply did not want to pay for inputs received.
“Yet for others it is the performance of the market itself; where the market is not paying well and then there is somebody who comes in offering more and paying on time.
“Also (the issue is about) less hustles in terms of travel and other things. There is a need for all of us stakeholders involved to monitor the marketing of all commodities, tobacco included.
“Those who contracted farmers should also be on the ground to monitor the movement of tobacco to say have the farmers started curing?” Mr Zakaria said.
He said this would enable contractors to know when farmers can start selling the crop, which would enable them to prevent the likelihood of the farmer diverting the crop.
“The contractors now need to do a lot more work because there are many other challenges that are coming up in terms of some people trying to entice farmers to the side market,” he said.
The 2021 tobacco marketing season officially closed on July 14, with deliveries surpassing initial projection of 200 million kilogrammes after 209,5 million kg valued at US$585,8 million were delivered.
This year, Mr Gudu said, the projection by TIMB was that deliveries would be almost similar to what the country realised from the 2020/21 farming season.
Zimbabwe is, however, looking to revamp the country’s tobacco production model, by making sure the Government plays a major role in contracting farmers.
This prompted the Government to introduce the Tobacco Production Localisation Revolving Fund with an initial injection of US$60 million from the Treasury to support growers.
This was muted after realisation that the balance of net proceeds or benefits to the country were largely in favour of merchants or contractors who sponsor the production.
Online Reporter