Zim tobacco: Is it sustainable?

effects is crucial.

Additionally, efforts should be made to improve the viability of growers so that they can afford to hire general labourers.

Late and non-payment of growers

While there has been significant improvement in payment practices for growers, concerns have recently arisen regarding late and non-payment by tobacco merchants and contractors.

It is alleged that this practice is widespread, with growers waiting for months to receive their proceeds, and some growers claiming they have not been paid for the previous season.

is casts a dark shadow over the future of tobacco production in Zimbabwe. ere are serious concerns that growers will struggle to procure inputs and fund their working capital requirements, as their finances will be tied up with contracting companies.

is problem is further compounded by the fact that some growers are contracted to companies that provide little to no inputs. is perpetuates cycles of poverty and indebtedness for growers.

STP proponents have described this practice as akin to forced labour, as tobacco contracting companies seize growers’ produce without payment.

e TIMB has recently implemented robust measures to address this issue, and it is hoped that offending companies, if any, will be held accountable and that all growers will receive fair compensation for their labour.

Improved contracts

Growing concerns have been raised about unfair contracts, inadequate and inflated inputs provided to growers by certain contracting companies, as well as delays in input distribution.

TIMB has been working on a robust Compliance Enforcement Framework to address these issues. is framework will ensure that contracting companies offer fair terms to growers, including timely and adequate input distribution, working capital disbursement and prompt payment for delivered tobacco.

Non-compliance may result in the revocation of licenses for offending companies. Failure to implement this framework will spell disaster for the industry.

The RBZ forex retention levels

e central bank has gradually increased the foreign currency retention level to the current ratio of 85% United States dollar and 15% Zimbabwe dollar.

While this was a welcome move, the disparity between the official exchange rate and the parallel market rate during the tobacco marketing season has consistently been significant.

Growers receive the Zimdollar component at the official rate, but when they spend it, they must use the parallel market rate, as most goods are priced accordingly.

is has resulted in growers losing value on the Zimdollar component, effectively selling their tobacco at 85% of its real value. is contributes to high levels of default and poverty among growers, making it difficult for them to self-finance.

Going forward, it is crucial to ensure that the exchange rate during the tobacco selling season reflects the real market rate. is will greatly contribute to grower viability and the overall sustainability of the sector.

External threats

e United Nations Framework Convention on Tobacco Control (UN-FCTC) has been actively campaigning for the global ban of tobacco production, citing climate change, environmental degradation, food insecurity, forced and child labour, green tobacco sickness and other health hazards as reasons to end tobacco production.

e organisation has designated May 31 of every year as “No Tobacco Day” and has been continuously advocating for the ban, particularly in what they refer to as “food insecure, third world countries”, including Zimbabwe.

If this agenda were to succeed, it would spell the end of tobacco production in Zimbabwe.

Proposed mitigation measures

To ensure that Zimbabwe remains a leading producer of the sought-after golden leaf, it is crucial to implement the following mitigatory measures urgently and wholeheartedly:

Implement measures to reduce grower indebtedness to contracting companies. A possible solution could be a debt assumption programme similar to the one established by the central bank in 2012, which absorbed non-performing loans from banks. is would not only revive merchants and contracting companies, many of which are indigenous, but also free growers from debt and ensure their sustainability.

Establish a Zimbabwe forum for tobacco sustainability, bringing together growers, contracting companies, regulators and all stakeholders to deliberate and find ways to ensure the long-term sustainability of the tobacco industry in Zimbabwe and beyond.

Encourage tree planting initiatives by involving all stakeholders in the tobacco industry. For example, the TFT #Atreeforeverykgold initiative could be adopted, where every kilogramme of Zimbabwean tobacco sold is accompanied by the planting of a tree to replenish those used in the curing process. Expedite the implementation of the TIMB Compliance Enforcement Framework to address issues such as late input disbursement, inadequate inputs, and other related concerns. is will ensure that growers are paid on time and receive fair treatment.

As part of the Tobacco Value Chain Transformation Plan, introduce alternative crops urgently to ensure grower viability and improve food and nutritional security. is will also counter the narrative of food insecurity put forth by the UN-FCTC.

Ensure that foreign currency retention levels reflect the actual market exchange rate during the tobacco selling season to avoid shortchanging growers.

Conclusion

Zimbabwe’s tobacco production is headed towards reaching the targeted 300 million kg and maintaining it, provided that all responsible value chain actors commit to the sustainable tobacco production practices proposed by the TIMB and adhere to the set guidelines to support the growers who are critical to productivity.

It is also crucial for all players to address deforestation, which remains the primary concern that can impede the country's efforts towards reaching the set targets.

Zimbabwe’s tobacco industry is sustainable and will surpass current production levels if efforts are sustained to ensure all raised issues are confronted accordingly.

Mukomberanwa is the founder of e Farmer Talk (TFT) Club, incorporating Tobacco Farmer Talk and TFT Climate Change and Sustainability. He has a keen interest in STP and ESG. He writes in his personal capacity. — +263 715 645 064 or e-mail phineas@tft.org.zw