Farmers demand premiums as tobacco earnings surge 30pc
FOLLOWING a 30 percent surge in tobacco export earnings from US$1 billion in 2022 to US$1,3 billion in 2023, tobacco farmers have challenged other value chain players to allow them (farmers) to also get increased premiums.
Statistics recently released by the Zimbabwe National Statistics Agency (ZimStats) for 2023 show that the country exported tobacco products worth US$1 297 280 021 up from US$998 057 601 in 2022.
In volume terms it increased 20 percent from 204 266 829 to 244 645 033 kilogrammes over the same period.
Among the products under the tobacco product exports are; partly or wholly stemmed/ stripped and not stemmed tobacco, cigars, cheroots and cigarillos containing tobacco, cigarettes containing tobacco, smoking tobacco, manufactured and refuse tobacco.
While appreciating the increase in earnings from the export of the crop, farmers have also lamented the fact that their share from the growing earnings has remained very small.
“The huge gap between what ends in the farmer’s pocket and what exporters take home is a big anomaly that needs to be addressed. Participation of farmers in the value addition chain needs to be enhanced by making sure they take ownership of the crop all the way to the market,” Zimbabwe Tobacco Growers Association (ZTGA) chairman Mr George Seremwe said.
To shore up farmers’ earnings, Mr Seremwe said there should be a premium price paid back to the farmer after the value addition process, as was the case in the past when back pays were given.
He also said there was need to craft a model that rewarded farmers in terms of export earnings.
“We used to have export retention schemes from the Reserve Bank of Zimbabwe (RBZ). This needs to be revived so that the farmer gets more value from the crop,” the ZTGA chair said.
Tobacco Farmers Union Trust (TFUT) president Mr Victor Mariranyika concurred saying although the US$1,3 billion was quite a substantial amount, the question that boggled the mind was on the distribution of the proceeds to players in the value chain with farmers being downtrodden always.
“Are farmers, especially small-scale growers who are the majority, benefiting from that money? Surely no,” he said.
Mr Mariranyika said there was need to improve prices for the farmer on the floor through introduction of a new pricing model which was cost driven.
“The grower is the weakest link in this matrix and needs protection from Government,” concurred Zimbabwe Progressive Tobacco Farmers Association (ZPTFA) president Mr Mutasa Mutandwa.
Growers allege that the auction floor has a ceiling price of US$4,99 per kilogramme every season that cannot be breached forcing some of them to side market their produce in search of better prices.
“The Tobacco Industry and Marketing Board (TIMB) needs to thoroughly monitor contractors as per the compliance administration framework in order to find out what inputs have been given to farmers versus the crop they are buying,” said Mr Mutandwa.
“Our crop is fetching high prices on the international market, as it is used as a blender but the farmer is not benefiting. There is need for massive investment in tobacco processing plants to increase exports of high-priced manufactured products,” explained the ZPTFA president.
The Tobacco Value Chain Transformation Plan (TVCTP) seeks to increase value addition from 2 to 30 percent by 2025 in order to reach a US$5 billion tobacco industry.
Zimbabwe Commercial Farmers Union (ZCFU) president, Dr Shadreck Makombe said farmers must play their part and produce better quality crop to get improved earnings.
He said: “The price at the floors can only be enhanced by improving the quality of the leaf as buyers prefer clean and clear styles. There is need to have more investment in processing to enhance value addition.”