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Precious Manomano Herald Reporter
Tobacco growers are reasonably happy with the selling prices obtained at the auction floors and most are optimistic that this might turn out to be a better marketing season.
This year two auction floors; Tobacco Sales Floor and Premier Tobacco Auction Floors, have been licenced by the Tobacco Industry and Marketing Board (TIMB).
The floors handle modest deliveries of tobacco not grown under contract and help create the pricing system that then applies to the contracted crops, with adjustments up and down for quality.
A survey conducted by The Herald at the auction floors in Harare showed that most farmers were happy with the grading and pricing at contract floors, with a maximum of US$6,10/kg and the auction floors with US$4,99/kg top price.
Mrs Marjory Munengerwa of Rusape was happy that this year’s average prices were almost similar to the previous season.
She said last year’s prices were firmer than this year because of low volumes adding that this time more volumes are expected to be delivered at the floors because of good rains that were received countrywide.
She added that this year’s leaf quality was good compared to the previous year.
“The prices are hovering around US$2,70 per kg and we hope they will improve as the marketing season progresses. If the prices continue like this, we will manage to go back to the field again,” said Mrs Munengerwa.
Mrs Munengerwa said farmers who did not follow proper agronomic practices in growing tobacco were the ones whose crop did not fetch better prices.
“Farmers have a tendency to skip other processes. This will compromise the quality of the leaf hence fetching low prices at the floors. It is advisable to work with experts such as extension workers to ensure that processes are properly followed leading to a fruitful production. Farmers we tend to ignore, but this will be a disaster when the marketing season comes. Nothing fruitful can be achieved,” she said.
Mrs Priscilla Gurure of Uzumba in Murehwa said she sold only eight bales, but she was planning to send her grandchild to a boarding school, adding that the money she acquired from selling tobacco was unbelievable.
“I could not believe my eyes because the amount I received so far is going to transform my family. My grandson is in Form One so I am planning to find a good school for him.
“I am grateful for Premier Tobacco Auction Floors. We are getting our money soon after selling our tobacco. We are proud of this company. So far we have not witnessed any unfair practices at this company,” she said.
Another farmer from Darwendale Ms Peggy Munaiwa said farmers were happy to get payments on time so that they embarked on other productions which needed funding.
“Delays in payment can cause disastrous results in other projects. We are appealing to the authorities to ensure that we get payments on time, side marketing should also be addressed as well as corruption so that we continue sustaining tobacco farming,” she said.
Mr Chirovapasi of Hurungwe under Chief Mujinga said prices were not bad so far although quality of the leaf is also taken into consideration.
“Quality tobacco is fetching higher prices. Next season we are able to go back to the fields. I delivered seven bales so I am still waiting for the payments.
“We are also happy that this year the Government has increased foreign currency retention to 85 percent, a move which will sustain farmers and the industry,” he said.
The Government’s move to review last season’s foreign currency retention percentage from 75 to 85 this year has seen growers so far pocketing US$517 million with the balance being paid in local currency at the prevailing interbank rate.
Tobacco Farmers Union Trust president, Mr Victor Mariranyika, said all farmers were looking forward to a rewarding tobacco marketing season.
He said the pricing model should take in consideration the production cost in order to sustain farmers.
“Farmers should soldier on and learn to bargain for the real value of their crop,” he said.
“Prices should improve to enable farmers to go back to the fields. There is a need to review the prices so that they meet costs of production.
“Next season we are looking forward to a favourable marketing season. Side marketing is the other issue which needs to be addressed to farmers because farmers prefer where they are highly paid. The 85 percent foreign currency retention increase is surely appreciated.”
Premier Tobacco Auction Floor executive director Mr Owen Murumbi said deliveries at auction floors were declining compared to contractor’s volumes and that the decline was forcing free farmers to go back to contractors.
“The contractors have received a lot of tobacco but there is still a lot of tobacco in the fields. We don’t have any challenges since we are paying our farmers on time. The volumes are currently down,” he said.
Mr Murumbi applauded TIMB for maintaining discipline in the industry as well as to curb side marketing, which has the potential to kill the tobacco industry.
“TIMB inspectorate is on the ground checking farmers who are doing side marketing. If they are found they are penalised, but it is very difficult to pick it up. Input costs went up but prices are going down. We expect the price of tobacco to go up,” he said.
Tobacco is the country’s biggest agricultural export and output has grown from 48 million kilogrammes in 2008 to over 200 million kilogrammes now, and the bulk of it is produced by small-scale farmers.
Currently, only 18 percent of the crop is grown under irrigation, and the intention is to expand this to at least 40 percent.
TIMB was working with its parent Ministry of Lands, Agriculture, Fisheries, Water and Rural Development to bring order to the industry as it seeks to achieve a US$5 billion industry by 2025.
According to the Tobacco Value Chain Transformation Plan, approved by the Cabinet in 2021, local funding of tobacco has the potential to maximise net export proceeds, but only to the extent banks have the capacity to fund local input producers with domestic holdings of money, rather than borrow externally.
The plan seeks to raise localisation of tobacco funding to 70 percent by 2025, boost output to 300 million kg, increase the level of value addition of the leaf into cut rug and boost the production of cigarettes to 30 percent of output from 2 percent.
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