Tobacco Industry: Time to pull together

Thank you for providing me with space in your newspaper to express dismay and offer a fresh perspective against the negative media coverage on small tobacco contractors in Zimbabwe, sometimes called surrogate tobacco producers.

Surrogate is a term being used to describe the small local indigenous companies who pretty much have been forced by both design and circumstance to be aligned to bigger exporting merchants.

It is important to see these alignments as both tactical and necessary while trying to break the chokehold on the tobacco industry in Zimbabwe by the predominantly foreign companies.

There is no denying they have invested huge amounts of money in this country.

However, and invariably, it is vital that there is separation of fiction from fact.

We are living in days of alternative truths, and it is therefore responsible to provide facts in the tobacco discourse.

A quick history of the tobacco industry will show you that tobacco as a crop played a pivotal role in sustaining the Rhodesian economy, and therefore, the Rhodesian government.

Tobacco was sold to global markets via sanctions busting mechanisms. At that time, no black indigenous companies were allowed or dared participate due to discriminatory policies of that time, which barred black businesses from mainstream industry.

A handful of companies were the kingmakers in the sanctions busting scheme to keep Rhodesia on life support albeit a cause which failed.

For the record, only 1,000 or so white farmers were producers of tobacco. At peak and prior to the land reform these farmers produced a record crop of 236m kgs.

Fast forward to land reform.

Lest we forget, history will tell you that on the advent of land reform the very big companies who championed the unsustainable cause of the previous white regime worked hard to thwart or alternatively stop or alternatively hinder success of the land reform program by withdrawing financial support and lobbying their kith and keen to pressure the government of Zimbabwe to literally abandon this important national issue.

The extent of their financial power and influence was felt across the country as the national tobacco crop size fell to the lowest level ever.

The rebounding of the tobacco industry has nothing to do with the seven merchants who at various levels today are being erroneously championed and celebrated as the saviors of the tobacco industry.

Uncelebrated heroes such as Robbie Mupawose, Monica Chinamasa, Andrew Matibiri, the late Roger Boka, Gary Magadzire, Wilfanos Mashingaidze and Ngoni Machirori, among others,  for all I remember truly championed the cause of black farmers.

Theirs was a dream for the emancipation of the tobacco industry in Zimbabwe. Yet another undeniable fact is that of Roger Boka.

The very merchants who today are being ‘celebrated’ as saviours and true custodians of the tobacco industry viewed Boka like the biblical Joseph, a dreamer.

Reality is that every effort and impediment that could be put in the way was thrown at Boka but against all odds, he showed great tenacity that it was possible to take the fight to the ‘enemy’.

And make no mistake; this came at great personal costs to Boka.

The tobacco which Boka bought at his first indigenous owned auction floor was scandalised and eventually re-bought for a song.

Was this accidental I ask?  Twenty-two years or so after land reform, indeed that fight continues.

Very few people know that the so-called surrogates or black contractors who are being blamed for every ill in the tobacco industry at peak production supported tobacco amounting to 75m kgs, nearly a third of the national production.

Facts don’t lie and Tobacco Industry Marketing Board (TIMB) houses these facts, which are a public record for anyone who is genuinely interested in facts.

Naturally this growth will create great uneasiness I suspect within some quarters of the sector, which are now crying foul, blaming, and rubbishing the so-called surrogates for all the evils in the tobacco industry.

I have a funny feeling that by some of the news headlines we see today, a few among us are being inadvertent accomplices in the demise of the local indigenous tobacco companies who have dared tread where angels fear.

The tobacco industry is indeed an emotive issue.

Others understand the history better because they were there.

For all the mud thrown at the small tobacco contractors, it appears few have bothered to find out why the business model of the so-called surrogates are as they are.

Few understand the global supply chain politics, which have literally shutout doors for local black players to be suppliers in their own rights.

No local indigenous Zimbabwean company supplies to any of the seven major global cigarette manufacturers.

This is spectacular for a country that is the 3rd largest exporter of tobacco. So, if you are a small player how do you do it; via big brother Cain who today is murdering Abel.

Ask every young evolving black company what their end aspiration is – it is to be an exporter.  Yet so many years down the line it is not so despite these companies together producing 25-30% of the tobacco in Zimbabwe.

But there is a glimmer of hope. More small companies are starting to make inroads especially in Asian markets. It has been and still is a long road, but it is happening.

Shouldn’t this be the story to celebrate?

However, what I do not agree with is to say that all current challenges on the tobacco landscape are the sole responsibility of the small players.

No!

Instead of the tobacco sector working together and coming up with practical solutions on the challenges faced including that of side-marketing, an issue which poses serious economic risks to this country, the guns have been drawn out and the blame and shame game has begun.

It is shameful that some of these big merchant companies can with a straight face standout and say they have ditched these surrogates.

Problem, it is their business decision, and it must be respected.

I have only one question: who has exported the nearly 300m kgs of tobacco produced by the so-called surrogates in the past seven years or so?

Who has benefitted? Who is lumped with all the unpaid debt? I could go on and on, but I think I have made the point. I am also tempted to question the timing of such actions and announcements and will therefore not cry out sabotage.

Even more surprised at the listing out of 27 local, indigenous, black owned contracting companies in one of the newspapers to say that the seven big companies have ditched these.

Some have been fooled to think that the survival of so-called surrogates is at the whim of the big seven.

No. In fact the surrogates have risked it all, to borrow money from the banks in support of farmers albeit with lots of difficulties and roadblocks along the way.

The point is to say such ‘announcements’ are grossly misleading as it is mischievous. In fact, the so-called surrogates who have borrowed to do business like any other have carried the real risk.

The People’s Republic of China buys nearly 50% of Zimbabwe tobacco.

The government of Zimbabwe has a critical role to play by doing what it does best – persuading and opening opportunities for the small merchants through bilateral arrangements with countries such as China, which is the best hope for the local companies to break out of the vice of being at the mercy of the big local merchants who clearly have demonstrated that they cannot be trusted.

I sincerely hope my ‘surrogates’ brothers and sisters have learned not to trust the hens with the fox because the leopard does not change its spots.

Indigenous companies must change their business models from being suppliers of green leaf to exporters and value adders.

The clamor by government for value addition at best will not be achieved via the big seven simply because they are exactly what their business are about – green leaf suppliers and not cigarette makers.

Please take note.

They are green leaf suppliers. That’s their business model.

I also dare say here that there is nothing wrong with that. You model your business the way you want. In my mind, the only avenue for value addition is via the very ones being pointed fingers at.

In some quarters, contract farming is deemed as a threat to the tobacco industry in Zimbabwe. Nothing can be further from the truth.

Contract farming is in fact the very survival of the tobacco industry in Zimbabwe.

Contract farming advocates responsible production of tobacco. Certain safeguards and guardrails are in place with strict monitoring and reporting mechanisms, rewards and punitive actions for compliance.

Globally, the trend is all about knowing the story behind the product.

Is it a bad thing to insist that farmers should wear protective clothing? Is it a bad thing to insist that children don’t do adult work but go to school?

Is it a bad thing that fair labour practices are applied on farm workers? Is it a bad thing that no trees are cut for curing of tobacco?

Is it a bad thing that only green labels chemicals are used not just for farmers’ safety but also for the good of the environment? You be the judge.

It is important to be open-minded about the real issues, which face the tobacco industry and the threats also.

The tobacco industry in Zimbabwe has a short window to comply with global trends but this window is not forever.

Advocates of the demise of contract farming need to be aware of these brutal facts.

The issue should not be the fight against contract farming but about aligning all forms of farming – free and contract – to comply with global demands or risk getting left behind and eventually get cut-out.

Let me sign off by addressing the big brothers in the tobacco industry directly. There is room to work together for the good of the country. It is possible but let’s resists the divisive temptation of them and us.

There are challenges right across the whole industry, but these are not insurmountable if everyone pulls together.

Njabulo Munda  is a Harare-based businessman. He writes in his personal capacity