Zimbabwe is set to breach half a billion US dollar revenue from tobacco sales in less than three months. To date, the country has earned more than US$436 million from 159 million kilograms sold since the beginning of the current selling season which kicked off in April.
Authorities estimate that the country will produce more than 200 million kilograms of the golden leaf in 2021.
The country has seen a 40% increase in the volume of tobacco sold compared to the same period in 2020. The crop continues to boost foreign currency earnings for the Southern African nation’s economy.
“The tobacco marketing season has also recorded good results, with a total of over 152.8 million kilograms having been sold to realise more than US$415.8 million, compared to the 124.5 million kilograms sold for US$296.9 million in 2020. The country’s average prices at us$2.72 per kg remain firmer than those prevailing in the region,” says Information Minister, Monica Mutsvangwa.
Zim tobacco industry on recovery path:
Small-scale farmers not enjoying rewards
However, for the majority of the more than 150 000 small-scale farmers who grow the crop, the rewards are not being enjoyed. Many complain they are in serious debt and are failing to service their loans from banks.
The current system is benefiting the middleman, but leaves most of the farmers in dire straits.
Under this contract tobacco farming model, the buyers provide the farmers with the inputs for tobacco farming, since the farmers cannot raise on their own the capital required to run a tobacco farming business.
Tobacco Association Zimbabwe President, George Seremwe, says 95% of farmers are under contract.
“Most of our farmers are under contract, that is 95% of our farmers are under contract. On their own, they cannot do it; they depend on the contract growing where they get all the inputs. The inputs, some of them could be overpriced and the support which is coming from the contractors could also be compromising. So, I would lobby that we look for alternative source of funding for the farmers to become viable and profitable, for now they are only working basically they are just as good as workers for the contracting companies,” says Seremwe.
Reduction in black growers
The Tobacco Industry and Marketing Board TIMB, which supervises the entire tobacco industry in the country, says it’s beginning to record reductions in registrations of new Black growers.
“The number of registered growers decline for the 2021 season; this year we had 154 597 registered growers as compared to 160 224 growers who had registered for the 2020 season. So, we have seen a decline of 4% in growers,” says the Board Spokesperson, Chelesani Moyo.
Zimbabwe’s cabinet says it’s finalising a tobacco value chain transformation strategy that seeks to localise funding.
For 2021, China and South Africa remain the major buyers of the golden leaf from Zimbabwe.