LIVINGSTONE MARUFU
Tobacco contractors and merchants have fast-tracked the distribution of inputs and provided funds to farmers for the 2021/2022 summer cropping season amid fears the government’s proposed US$60m revolving fund could find no takers.
The tobacco contractors, who control 95% of the total tobacco sales in the country, are determined to maintain their hegemony in the marketing of the country’s tobacco.
Well-placed sources told Business Times that the majority of contractors and merchants have completed the process.
“It’s now dog eat dog in the tobacco industry, the tobacco merchants have already distributed the inputs and provided the funds to the farmers to do the land preparations and all necessary processes required to begin tobacco planting,” said the source.
“With the government starting to raise the US$60m revolving fund, the money won’t have many takers as the seed planting is done from May to end of July.”
The source said instead the US$60m will be for expanding hectarage for large scale farmers not small scale farmers who would want to begin the preliminary processes.
According to tobacco experts, irrigated tobacco seed planting is planted in May in preparation for the September 1 transplantation and the dryland seed planting begins in June in preparation of November and December transplantation.
The tobacco seedlings are given time to harden so that they do not wilt much and survive the moisture stress after transplantation.
The government is expected to launch its local funding mid-August, a time when various farmers have completed the processes.
After the launch, the farmers can start to apply for the fund and this will take at least two weeks for those who would have been granted the access to the revolving fund.
Then the farmers will start seeding in September and according to experts September is still fine but the seedlings will not have enough time to harden and will be vulnerable to moisture stress in the early stages.
The Ministry of Lands, Agriculture, Fisheries, Water and Rural Resettlement is spearheading a plan to that effect and is working closely with Tobacco Industry and Marketing Board and other stakeholders.
A Reserve Bank of Zimbabwe official, who declined to be named, said the authorities may be a bit late but farmers will access the money and it will be useful in the upcoming season.
“Not all hope is lost as the money will be useful in a long journey which will end in August next year. The US$60m revolving fund is a starting point and it takes years to complete the local funding process as it requires at least US$400m,” said the official.
“But the key points are that their journey towards that has begun and after five or more years, the onshore funding battle would have been won.”
TIMB chief executive officer Meanwell Gudu said the money will still be useful if it is released by mid-August.
“The earliest date for transplanting is September 1 if the government avails the funds promised by mid-August farmers will still be in time to also transplant their seeds,” Gudu said.
“The timelines that have been put in place in the Tobacco Value Chain Transformation Strategy are to localise financing of tobacco production to retain 70% of tobacco value by 2025 from the current 30%. We will do our best to ensure the target is attained by 2025 with the help from the industry.”
Tobacco is the fourth largest foreign currency earner behind platinum, Diaspora remittances and gold.
About 90% of growers are now 100% US$ borrowed from their contractors, implying no new US$ comes into the country until US$ loans are repaid.
The average price for the auctioned tobacco stands at US$2.82 per kilogramme against the contracted price of ZWL$2.77 per kg.
