Tobacco in record production, as farmers demand an increased share

Edgar Vhera

Agriculture Specialist Writer

Tobacco deliveries for the 2023 marketing season have hit the record of 259 million kilogrammes which was recorded during the 2019 selling season.

This comes as most farmers have expressed concern over the increased costs of production of tobacco which have eroded their profits.

Tobacco growers feel they are not getting enough revenue from their crop while other players within the value chain were reaping the benefits.

Statistics from the Tobacco Industry and Marketing Board (TIMB) indicate that farmers had, by day 63, sold 259 098 162 kg of flue cured tobacco worth US$782 million.

This is 55 percent increase from the 166 973 588 kg worth US$505 million sold during the corresponding period last year.

Tobacco Farmers Union Trust vice president Mr Edward Dune yesterday said contractors were the only beneficiary in the current production and marketing arrangement with farmers at the receiving end.

“These contractors are making a killing as they deduct their dues at highly inflated costs in foreign currency. 

“Merchants further milk producers as they get more from processed tobacco,” said Mr Dune. 

Mr Dune believes only Government can rescue farmers by providing inputs at affordable costs. 

“Presidential tobacco inputs scheme would go a long way in removing farmers from being trapped by contractors. Farmers can further be assisted to value add their tobacco for increased returns,” continued Mr Dune. 

Zimbabwe Commercial Farmers Union president Dr Shadreck Makombe said there was need for farmers to have direct access to financiers rather than through middlemen, if they are to have their profitability increased.

“Farmers ought to deal directly with financiers and eradicate middlemen/contractors who put up their mark-up to the original cost from input supplier. 

“If farmers can approach financial institutions and get their loans at affordable or subsidised rates, only then can they be extracted from contractor trap,” said Dr Makombe.

Dr Makombe said that availing of the US$60 million tobacco revolving fund by the Government will also assist in lowering costs of production and raising farmer profitability.

Zimbabwe Tobacco Growers Association chairman Mr George Seremwe said the record production was a great achievement from farmers working with their financiers, however it was crucial for Government and all stakeholders to look into lowering cost of production for sustainability.

“Government and input suppliers must explore ways to lower cost of production as well as cost deductions on sales sheets which are eating into farmer income,” said Mr Seremwe.

Farmers in the Tobacco Farmers Talk (TFT) group mourned the increased cost of production that was over 30 percent while the average price had not changed.

“This has wiped out the little income of the farmers leaving them with no option but to go back to the same contractor next season for funding.

“This perpetuates the contractor syndrome unless Government intervenes,” said the farmers.

Some farmers are also advocating for a change in the current marketing arrangement to a cost-pricing model.

Zimbabwe Tobacco Association chief executive officer Mr Rodney Ambrose observed that there was no difference in tobacco output prices for the past three successive seasons however, profitability took a knock due to 30 percent increase in cost of production.

The Government came up with the tobacco value chain transformation plan (TVCTP) in 2021 which sought to secure the future and consolidate the important role of the tobacco value chain to the economy.

The TVCTP revealed that most smallholder farmers were suffering losses over multiple years due to significant power asymmetry between them and the buyers of the tobacco leaf. Buyers grade the leaves and peg the price at a price that in most cases would be lower than in a competitive market. 

It also noted that contracted farmers get inputs from contracting companies at higher prices than on the market, thereby trapping farmers in cycles of poverty and indebtedness.  

Officially opening this year’s tobacco marketing season, Vice President Dr Constantino Chiwenga called on treasury to provide seed money for the establishment of a US$60 million tobacco revolving fund for the production of 60 million kg. 

This move was meant to localise tobacco funding with an initial target of 50 000 ha for smallholder farmers.