Agribank injects US$9m in tobacco


Agribank has invested US$9m in the Tobacco Industry and Marketing Board (TIMB) Input Scheme for the 2020/2021 summer cropping season as part of efforts to boost output of the golden leaf.

Recently, the Reserve Bank of Zimbabwe set up a facility for small scale farmers to finance procurement of inputs to be distributed and administered by Agribank, which has been directed by the government to focus on its core mandate of financially supporting the agricultural sector.

The cash injection from Agribank comes at a time when the tobacco output has gone down 29.4% to 183.5m kilogrammes (kg) in 2020 from 260m kg in 2019.

TIMB chief executive officer, Andrew Matibiri told Business Times the support to small farmers amid revelations the bulk of the constituency was struggling to get financial support from tobacco contractors.

They were now finding it difficult to afford inputs. Matibiri said farmers have started benefitting from the input scheme around the country.

“Agribank is availing inputs to be distributed under the TIMB Tobacco Inputs Credit Scheme worth US$9m,” Matibiri told Business Times.

He added: “These inputs are enough to cater for 13 000 hectares and are for small scale farmers.”

“To date, 3 669 tonnes of high analysis Basal fertiliser and 512 tonnes of Ammonium Nitrate fertilisers have been distributed to 9 172 tobacco growers.

This will cover approximately 9 172 ha of tobacco.” Agribank is targeting those farmers that are not contracted and those that have a track record of at least two years.

This is expected to improve the livelihood of thousands of farmers in Zimbabwe, as well as improve the country’s foreign currency earnings.

Matibiri said the scheme was anticipated to reduce side marketing which has afflicted the tobacco marketing seasons.

TIMB said farmers should have their grower numbers in order for them to get their money directly into their accounts as there are a number of cases at the floors where farmers swindled millions of dollars by other farmers and side-marketers.

The appetite for tobacco growing faded as evidenced by the drop in registration numbers which stood at 112 472 growers compared to 132 987 that had registered in the previous season during the same period.

Of the registered growers, 1 624 are new and 110 047 are contracted, putting the auction floor at a risk.

However, a total of 940.328kg of seed was sold, up 27% on the 2019/20 amount sold.

A total of 14 062 ha, of which 13% is dry land, have been planted as at October 22 2020 in contrast to 11 777 ha planted during the same period in the 2019/20 season.

Tobacco is the country’s secondhighest forex earner after gold. But, its export receipts tumbled 7% to US$846.7m last year from US$907.8m in 2018 due to prolonged droughts and unfavourable payment policies.

Recently RBZ governor, John Mangudya said the tobacco sector had the potential to generate more foreign currency for the country, if sustainably and adequately funded.

The central bank allowed 48 tobacco merchants to use real-time gross settlements to purchase the golden leaf from the auction floors after noting that small and start-up companies in the tobacco sector were failing to access offshore funding in line with the tobacco financing order.

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