Government has tasked the Tobacco Industry and Marketing Board (TIMB) to eliminate problems threatening the viability of the tobacco industry as the country plans to increase production to over 300m kilogrammes annually.
Speaking at the opening of the 2021 tobacco marketing season yesterday, Lands, Agriculture, Fisheries, Water and Rural Resettlement minister Anxious Masuka said that TIMB should lead in transforming the tobacco value chain to a US$5bn industry by December 2025.
The tobacco industry is facing serious viability challenges due to low retention levels of 60% at a time when a farmer needs 70% to break even.
“TIMB should eliminate the perceived farmer deprivation and enhance transparent and fair tobacco sales at contract and auction sales including analysing, recommending, improving and facilitating equitable transparent and profitable sharing of expenses and profits throughout the tobacco value chain,” Masuka said.
He said Tobacco Value Chain Transformation Strategy enables the intensification of tobacco production by enhancing transparency and fair tobacco marketing, reform, restructuring and rebuilding of existing institutions in order to optimise tobacco value chain financing.
The strategy also seeks to promote value addition and to facilitate the production of alternative crops to tobacco to diversify revenues and assure industry sustainability in the face of climate change and anti-tobacco campaign.
The Agriculture ministry has refocused the mandate of TIMB and the board to reform and restructure to improve the regulatory, compliance, discipline, and traceability environment to increase tobacco production, Masuka said.
Masuka expects the TIMB board to develop a robust tobacco information management system, from growing units to markets, analysing trends and proffering advice on needed policy interventions for a sustained growth of the industry.
“As part of agriculture transformation, my ministry envisions transforming the 18,000 A2 farmers to become agricultural entrepreneurs and their farms becoming enviable businesses by 2025.
“Furthermore, we envisage transforming the 360,000 A1 farmers to become viable and formal small to medium enterprises by 2025 focusing on up skilling their activities,” he said.
Masuka wished that the 2021 tobacco marketing season will run smoothly and will be of great benefit to the tobacco growers, tobacco merchants and Zimbabweans in general.
But the country and tobacco growers are likely not going to benefit from the new tobacco marketing season as most farmers are trapped in debts through contract farming while the country will only get 25% of the proceeds as the rest of the money will return with merchants through loans among other facilities.
Tobacco analysts argued that Masuka and his counterparts should engage the central bank and treasury to bail out embattled farmers by reviewing forex retention levels to increase production.
They said as long as the farmers’ issues are not addressed 300m kg tobacco output is likely not going to be reached in the near future.
The first bale which weighed 120kg was sold at US$4.30/kg, which is an improvement from last year’s first bale which was sold at US$4/kg.