Thursday, February 07, 2013

Zimbabwe Tobacco Season to Raise Fresh Capital Into Economy

Editorial Comment: Tobacco season to raise fresh capital into economy

Thursday, 07 February 2013 00:00
Zimbabwe Herald

In just seven days the 2013 tobacco-marketing season will get underway raising the hope of inflows of fresh capital into our economy. The tobacco selling season is increasingly becoming an important event on our economic calendar as more and more farmers are turning to tobacco farming due to more attractive returns offered for the crop.

This is an important development since it will boost earnings from tobacco.

This year the Tobacco Industry and Marketing Board has set a target of 170 million kg which appears to be manageable given that last year’s target of 130 million kg was surpassed with 144, 5 million kg sold raking in US$527, 6 million.

The fact that more than 65 000 farmers have registered to grow tobacco this season against 35 000 for last year is a very encouraging development that makes the 170 million kg target attainable.

News of a reduction in production by major tobacco producers such as Brazil due to floods is also likely to augur well for our farmers.

Hopefully this reduction in production will help influence higher prices for our farmers although this will largely depend on how other tobacco producing nations such as Malawi will perform.

While it has been common for farmers to cry for better prices year in year out, it is also important that they understand that the prices of tobacco are influenced by market forces as opposed to their desire to make a profit.

The ball is, therefore, in TIMB’s court to ensure that the message strikes home.
In the same vein the TIMB should also ensure that there is no collusion among buyers to offer low prices that disadvantage the growers.

This is critical given the high costs that farmers incur in producing the crop in some instances without any support.

It is critical that we do not kill the goose that lays the golden egg.

While the production side is looking very promising it is critical that the Tobacco Industry and Marketing Board ensures that all systems on the marketing side have been fine-tuned.

This includes ensuring that the booking system is up to date and capable of flushing out double bookings as was the case in previous seasons.

It is critical that farmers get their growers numbers on time and that bookings are done ahead of time to avoid congestion at the floors.

It is also critical that the payment of farmers should be expedited to ensure that they do not spend more time than necessary at the floors.

Scenes of farmers camping at tobacco auction floors for days on end should not be allowed to recur this season especially during this period when the country is grappling with cholera and other water borne diseases.

On the contract farming side, side marketing has also been a menace in the industry and has in the past threatened to destroy the system.

It is critical that the practice is be dealt with as soon as possible to ensure that the continuation of the system. Unscrupulous merchants should not be allowed to continue to reap where they did not sow.

By entering into a contract, the two parties agree to adhere to the stated terms of the agreement and they should stick to the stipulated terms.

As all hopes are pinned around agriculture to turn around the economy, it is incumbent upon those entrusted to play their part.

Unlike other sectors of the economy such as manufacturing that require large sums to recapitalise, it is easier to look up to agriculture and hence tobacco to drive this growth.

At its peak in 2002 proceeds from tobacco alone were enough the cover the country’s annual fuel import bill.

And with higher returns on the international market we can actually expect much more.
What is encouraging to note is that more and more smallholder tobacco growers have come to the party and what this means is that this caneasily transform the livelihoods of the majority of the people mainly in communal areas.

Another positive coming out from tobacco growing areas is that there is higher productivity in other crops from tobacco growers.

It is a fact that the largest maize growers are actually tobacco farmers and they have equally come tops in livestock production.
They have an aura of success.

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